PlanetScale is a cloud database provider. On 6th March 2024, PlanetScale faced trial-by-tech-Twitter for dropping their free tier.
Fast forward to today, they are on a winning streak. They launched Metal and Postgres to much excitement, the business is profitable and there’s even been a noticeable vibe shift on tech Twitter.
It seems focusing on paying customers was a great decision.
And so I interviewed their CEO, Sam Lambert. This is what I learned.
Be honest about what you can and can’t do
PlanetScale focuses on being reliable at a enormous scale.
A free tier just doesn’t make sense for them.
As Sam puts it, maybe they’re leaving a few million dollars on the table, but it was still one of their best decisions.
Some companies should not have a free tier
I expected Sam to say free tier == bad idea. But he is far more nuanced. Whether you have a free tier or not is a very business-dependent decision and that it’s not possible for him to give advice to a specific company without knowing the business very well.
Possible reasons for a free tier:
- Cost advantage: if you have a massive cost advantage and want a really “nasty” way to attack incumbents. Google did this for Gmail vs Yahoo Mail. Tons of free storage. (Sam didn’t say it but I was also thinking about Cloudflare v AWS here.)
- Sometimes the free tier helps you figure out if the solution is right for you, especially if your service is a new type of offering and customers may not know what to expect.
Possible reasons not to have a free tier:
- If your service costs real money to provide. For databases, Sam said it’s difficult because you’re giving away AWS resources that cost money.
- If your service is well understood, e.g. database.
Sam said he’s been told privately by multiple founders that they wish they could kill their free tier but they’re afraid of the public backlash. Sam didn't say it explicitly (I should have asked!) but I suspect he believes that's a bad reason to keep a free tier.
At time of writing, PlanetScale’s pricing page starts from $39/mo and Sam says, while he received some backlash on Twitter, dropping the free tier has been a great decision for them.
Customers who will ever pay tend to pay quickly
In Sam’s experience, people that will ever pay you money, tend to pay you money quickly. They’ll be out of the free tier quickly. It’s very rare that someone is on the free tier for months and then converts. And most of the emails he still receives about the free tier are from university students.
Express hard-to-convey benefits via your customers’ experiences
For strengths that are difficult to convey to the outside world, for example reliability, you can convey the brand message through your customers: PlanetScale’s customers sharing that PlanetScale are reliable. Or perhaps just the absence of people sharing outages. But, essentially, some messages can only be believed when they come directly from your customers.
Every database company will say they are reliable. But here’s an example from PlanetScale’s testimonial with the Cash app team:
“In the past we've had issues when something unusual happens on a specific shard, resulting in spiked CPU and poor performance, and since migrating we haven't really seen instances of this, speaking to PlanetScale choosing the correct hardware for our existing load at the outset.”
— Aaron Young, Engineering Manager
Brand matters a lot
This is an obvious point on the surface. But I like the way Sam expressed it. When PlanetScale launched their new Postgres product, their brand was so clear that developers already knew exactly what they’d be getting with it.
So PlanetScale didn’t have to do anything too flashy. They just entered the space with a solid product and customer testimonials to back it up.
People solving serious problems appreciate serious content
Sam’s content philosophy comes from his time at GitHub. Upon joining GitHub, you would get an education in the voice of GitHub.
Content is really important to people who think deeply about things. And Sam actually joined GitHub because of a post from Ted Nyman (ex CTO of GitHub) on memory allocation.
Sam believes that in the long run, PlanetScale is building for people dealing with serious problems and they appreciate serious content.
Meaningful content is a big advantage
If you can write content which is poignant and sticks with you, you are creating an unfair advantage over your competitors. PlanetScale strive to produce content that is really enduring. It takes time so you have to invest upfront.
For example, I really like this interactive post on caching. It teaches you how caching actually works and you can test your understanding by interacting with the diagrams. I can only imagine how many hours this took to make.
Sam doesn’t think about the end goal or CTA but if someone reads it and finds it valuable, they might think about PlanetScale in the future. And you do feel a return from that. It’s slower. But more meaningful.
CEOs should be transparent and collaborative but assertive
Sam likes to throw things out transparently and be collaborative.
But if you’re running a company you have a unique perspective. You won’t always be right—but you’re doing the one job no one else is. Having conversations no one else has and everything runs up to you. You are the last one turning the lights off if your company fails.
Sam has seen friends turning the lights off while regretting not doing the things they believe in or implementing someone else’s decisions. A lot of the time, people know what to do but don’t act on it.
Ultimately, everyone who works for you can leave, so be decisive and try to be more right than you are wrong. And be open when you are wrong. If you are right more than you are wrong, the best people will know you have a good perspective and want to work with you.
The best people have intrinsic motivation
The best people never care what their boss thinks. They have intrinsic motivations far greater than their boss. Hire people whose intrinsic motivation aligns with your company.
When you’re hiring people, invite them to speak with your teammates
Sam encourages prospective employees to reach out to current PlanetScale employees. Much like how he does with customers. Let them speak for what it’s like to work at PlanetScale.
Sam explains these lessons better than I can in the full episode on YouTube, or search Scaling DevTools PlanetScale on your favourite podcast player.