Investing in Metronome
I was recently sitting in a board meeting of a successful SaaS company when the conversation turned to the slipping product release date. The problem was that the billing system wasn’t going to be finished in time. On the face of it, this seems like a silly thing to hold up a product launch, particularly at a deeply technical infrastructure company. But this is a situation I’ve seen many, many times over the years – including up close when I was building and shipping product at my company Nicira.
Building a billing system that can handle flexible usage-based billing is incredibly hard. To begin with, it is a very legitimate big data problem in its own right – the system has to be scalable and performant, with strict correctness requirements. Companies often iterate through multiple rounds of pricing models, and hardcoding these decisions can make change incredibly cumbersome. Further, full solutions help not just with getting products quickly into market, but also with pricing and packaging discovery, real-time data, and integrations. The SaaS world is going through a shift where the speed and flexibility of pricing iteration needs to match the velocity of product iteration, but the bottleneck still too often occurs around billing.
Supporting all of these requirements is a significant undertaking for internal engineering teams, especially given that billing is often (mistakenly) considered an ancillary component, so it rarely gets the attention it needs until too late. In fact, I’m embarrassed to admit that even though we had one of the top distributed systems teams at the time, for years we simply had customers self-report their exact usage because we never quite got our billing system working.
Of course, pricing and billing have a direct impact on a company’s top line. Perhaps more so than any other back office system. So even though it’s often overlooked as a top development priority, it really should be a first-order business decision.
This is why I was so eager to meet Metronome – the leading billing infrastructure company – after hearing praise from several portfolio companies evaluating the solution. Metronome is different from many earlier generations of billing software. It is a simple-to-integrate solution that tackles the gnarliest billing infrastructure needed for effortless consumption pricing. The founders, Kevin and Scott, had deep visibility into this problem during their time at Dropbox. As multiple-time founders that saw billing at scale, they understand the level of effort needed to get this problem right.
For nearly all companies in software infrastructure, APIs, and B2B applications, SaaS is the dominant business model, and nearly all of them strive for a usage-based pricing model. But given my traumatic experience with the problem, I really only had one question – is there a universal system that can serve such versatile demands?
To my surprise, not only has Metronome built it, but they were already deeply engaged with some of the leading SaaS companies such as Cockroach Labs, Starburst, Cribl, and Truework, all of whom were paying customers and using Metronome in production!
I’m very excited to be leading the Series A for Metronome and joining the board to help them on their journey. They are an all-star team with the technical chops, the business acumen, and the market validation to tackle one of the biggest pain points in building a SaaS product today. I just wish the product would have been around a decade ago.
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