Discover more from Notorious PLG
NPLG 10.5.23: A New Way to Monetize Open Source (MotherDuck)
The best PLG founders, startups, strategies, metrics and community. Every week.
Current subscribers: 8,300, +65 since last week
Share the PLG love: please forward to colleagues and friends! 🙏
NPLG Startup of the Week: MotherDuck
This year, MotherDuck was voted to the Enterprise Tech 30 list as one of the most promising technology companies by a panel of 100+ prominent VCs. MotherDuck recently announced a $52.5M Series B led by Felicis, bringing the total fundraise amount to $100M, to deliver a serverless easy-to-use data analytics platform for data small and large. Safe to say, MotherDuck is both one of the hottest infrastructure companies in the world and just happens to have one of the best startup names.
For this edition of Notorious PLG, MotherDuck Co-founder and VP of Produck (🦆) Tino Tereshko shares his PLG strategy with the Notorious PLG community:
DuckDB is Everywhere!
“DuckDB is quite possibly the most hyped open source project in analytics in years. Why, you may ask?
Well, DuckDB is uniquely embeddable, so it can live almost anywhere - Python notebooks, R scripts, cloud functions, in the browser, or simply on a cloud VM. Thanks to DuckDB, virtually any computing resource can suddenly perform analytics in beautiful SQL.
The open source community has embraced DuckDB in a big way. Virtually every modern BI platform embeds DuckDB. Okta uses it to perform analytics at the edge. Vector similarity is now possible. Even ETL tools and AI communities are jumping aboard. DuckDB is a database that can walk, swim, and fly, and the variety of real-world use cases is indicative of its amazing versatility.
MotherDuck is Managed DuckDB for Organizations
DuckDB doesn’t do everything, and that’s on purpose. For example, DuckDB doesn’t have IAM or sharing, it doesn’t have a great multi-tenant story, nor does it provide an operational service layer required by organizations. By design, DuckDB focuses on a best-in-class single-player experience.
MotherDuck: A serverless cloud service with DuckDB in the middle
Enter MotherDuck. We’re building a new type of serverless data warehouse on top of DuckDB. Where DuckDB lacks, we step in. We manage DuckDB for you, and we’ve invested in all the bits required for Enterprises to adopt DuckDB, such as sharing, auditing, administration, serverless ops, and persistence. And we’re ensuring that all the modern data tools are well-supported with MotherDuck.
The Modern Duck Stack, supported by MotherDuck
A New Way to Monetize Open Source
Folks over at DuckDB Labs, the organization behind DuckDB, very much enjoy working on the DuckDB open source project. They’ve purposefully stayed away from monetizing DuckDB by building a cloud service. Instead, DuckDB exclusively partners with MotherDuck to deliver such a service. In this model, everybody wins: DuckDB Labs retains its freedom and independence, MotherDuck gets big help, and both parties share in the upside. This is a unique and novel model to take open source to market.
Open source companies these days are going open-core, increasingly hiding capabilities behind their closed-source services. Open-core is often a necessity, but often upsetting open source purists. MotherDuck’s relationship with DuckDB is clean in this regard - DuckDB is forever open, while MotherDuck builds closed-source service infrastructure components.
DuckDB Drives the Top of the PLG Funnel
DuckDB’s broad awareness and positive sentiment benefits MotherDuck, as folks jazzed about DuckDB in turn gain awareness of MotherDuck and are excited about the prospects of a cloud service that complements and enhances their DuckDB experience. We’re fully aware of how difficult it is to get the PLG flywheel going, and we’re eternally thankful to DuckDB for this additional benefit. And the puns.
We’ve greased the skids on the DuckDB-to-MotherDuck pattern in a major way. Virtually any DuckDB anywhere can connect to MotherDuck with one single command - “open motherduck:”. Under the hood, the MotherDuck extension gets loaded, and suddenly your DuckDB instance is supercharged by MotherDuck. We thus enable a slew of additional capabilities, plus something we’re calling hybrid execution: a different kind of distributed system is created, in which your DuckDB and our cloud-hosted DuckDB work in concert to execute analytics workloads.
It is a good time to mention that MotherDuck is still early in our journey. We just went Beta in June, and opened the doors to all users in September. We don’t yet have billing, but we did announce a compelling pricing model. In that regard, we’ve lots of work to do before our PLG flywheel is spinning at full speed, but we’re on our way!
Founder Led Customer Love Drives Deep Adoption
Data is complex. We’ve found that deeply engaging with customers, being stateful and present in their projects, and continuously soliciting product feedback is a great way to rapidly mature the product. To this effect, we launched a design partner program: we closely work with a small number of highly motivated customers with good technical fit and a problem that we believe we can solve deeply. Idea is that by making these customers love MotherDuck we can build repeatable patterns, which in turn will drive scalable go to market. At this stage of the company our goal is happy customers, not revenue.
We learned that a specific subset of users is especially underserved by the data landscape - application developers building data-intensive B2B applications. Data applications don’t work in OLTP databases, they don’t work in OLAP databases and data warehouses, and they kinda work in purpose-built databases. We have some novel ideas here, and we’re getting gobs of traction among this particular user type.
Since opening the doors just a few months ago, we have several thousand sign ups. A number of organizations are using MotherDuck in production, and many are headed that way quickly. We’re rapidly driving towards General Availability - a major milestone signaling maturity and readiness to our customer base.
We really like PLG, as it incentivizes polish and ease of use, and our product reflects this philosophy. However, we recognize that organizations of all sizes and maturities need help. Whether we have an enterprise sales motion to complement PLG will be dictated by the customer, and our job is to stay humble and flexible. Time will tell!
If you’re interested in trying MotherDuck, head over to our website. Be sure to join our Slack community and say hello. If perchance you’d like to chat, ping us on Slack or email us at firstname.lastname@example.org!”
I would love feedback. Please hit me up on twitter @zacharydewitt or email me at email@example.com. If you were forwarded this email and are interested in getting a weekly update on the best PLG companies, please join our growing community by subscribing.
PLG Benchmarking (Startups):
I will continue to update these metrics and add new metrics. I would love your feedback on what else I should track (firstname.lastname@example.org).
Organic Traffic (as % of all website traffic):
Conversion rate (website → free user):
Activation rate (free user → activated user):
Paid conversion rate (free user → paid user):
Enterprise conversion rate (free user → enterprise plan):
3-month user retention (% of all users still using product after 3 months):
Conversion from waitlist to free user:
<1 month on waitlist: ~50%
>3 months on waitlist: 20%
For more detail on acqusition rates by channel (Organic, SEM, Social etc), please refer to this prior NPLG.
PLG Financial Benchmarking (Public PLG Companies):
Financial data as of previous business day market close.
Best-in-Class PLG Benchmarking:
15 Highest PLG EV / NTM Multiples:
15 Biggest PLG Stock Gainers (1 month):
Complete Notorious PLG Dataset (click to zoom):
Note: TTM = Trailing Twelve Months; NTM = Next Twelve Months. Rule of 40 = TTM Revenue Growth % + FCF Margin %. GM-Adjusted CAC Payback = Change in Quarterly Revenue / (Gross Margin % * Prior Quarter Sales & Marketing Expense) * 12. Recent IPOs will have temporary “N/A”s as Wall Street Research has to wait to initiate converge.
Recent PLG Financings (Private Companies):
Genus AI, an artificial intelligence marketing platform intended to generate and create advertisements, has raised $6M. The round was led by Aleph Holding.
PartyKit, an open source deployment platform, has raised $2.5M. The round was led by Sequoia Capital, with participation from Cursor Capital and Remote First Capital.
Prompt AI, a developer of a computer vision artificial intelligence technology designed to gain actionable knowledge from a large number of images and videos encountered daily, has raised $5M. The round was led by AIX Ventures and Abstract Ventures.
Revefi, a cloud-based data observability and monitoring platform intended to focus on making data at scale reliable and cost-efficient, has raised $10.5M. The round was led by Mayfield (Navin Chaddha), with participation from Neythri Futures Fund and GTMFund.
Apron, a payments platform designed for business owners to reconcile their invoices, has raised $15.65M. The round was led by Index Ventures, with participation from Bessemer Venture Partners and Visionaries Club.
Erudit, a developer of an employee burnout detection platform designed to help businesses reduce worker turnover, has raised $10M. The round was led by True Blue Partners, Fondo Bolsa Social, Athos Capital, Conexo Ventures and IGNIA Partners.
Nx, a startup developing tooling to make it simpler for software dev teams to work within a single code repository, has raised $16M. Nexus Venture Partners and a16z participated in the funding.
Lumu, a startup that helps enterprises identify and isolate security compromises, has raised $30M. The round was led by Forgepoint Capital, $6M of which is debt.
AlphaSense, a New York-based market intelligence and search platform, has raised $150M at a $2.5B valuation. Bond led the round, and was joined by CapitalG, Viking Global, BAM Elevate and Goldman Sachs.
Anthropic, a company that operates an AI-powered, text analyzing chatbot, has raised $1.25B, potentially rising to $4B. Amazon provided the funding.
Nord Security, a Lithuanian VPN provider, has raised $100M at a $3B valuation. The round was led by Warburg Pincus, with participation from Novator Partners and Burda Principial Investments.