Lenny's Podcast

How to price your product | Naomi Ionita (Menlo Ventures)

Naomi Ionita is a Partner at the venture capital firm, Menlo Ventures. She started her career in engineering in 2002, shifted to product in 2006, and built product growth and monetization teams starting over a decade ago as one of the first PLG leaders in B2B. She was an early mentor at Reforge and her expertise is in building full-stack growth teams and cultures, launching new products, and helping existing products monetize and retain their users. Consider today’s episode a master class on monetization and pricing. We talk about common mistakes made by founders, specific experiments for how to determine pricing, and why initial growth sometimes comes at the expense of revenue. Naomi also introduces the concept of the Modern Growth Stack, how AI will play a role in growth, and what she’s most excited about for the future. — Find the full transcript here: https://www.lennyspodcast.com/how-to-price-your-product-naomi-ionita-menlo-ventures/#transcript — Thank you to our wonderful sponsors for supporting this podcast: • Miro—A collaborative visual platform where your best work comes to life: https://miro.com/lenny • Notion—One workspace. Every team: https://www.notion.com/lennyspod • Vanta—Automate compliance. Simplify security: https://vanta.com/lenny — Where to find Naomi: • Twitter: https://twitter.com/npilosof • LinkedIn: https://www.linkedin.com/in/naomipilosofionita/ • Website: https://www.menlovc.com/naomi-pilosof-ionita — Where to find Lenny: • Newsletter: https://www.lennysnewsletter.com • Twitter: https://twitter.com/lennysan • LinkedIn: https://www.linkedin.com/in/lennyrachitsky/ — Referenced: Disclaimer: Lenny is an angel investor in a few startups mentioned in this episode: Eppo, Endgame, Pocus • Evernote: https://evernote.com/ • Figma: https://www.figma.com/ • The Van Westendorp pricing model: https://www.forbes.com/sites/rebeccasadwick/2020/06/22/how-to-price-products/?sh=7e6077f855c7 • OpenView: https://openviewpartners.com/ • SaaS business model at Profitwell: https://www.profitwell.com/recur/all/saas-business-model • Envoy: https://envoy.com/ • Invoice2go: https://invoice.2go.com/ • Gas: https://apps.apple.com/us/app/gas/id1641791746 • Endgame: https://www.endgame.io/ • Pocus: https://www.pocus.com/ • Optimizely: https://www.optimizely.com/ • Eppo: https://www.geteppo.com/ • Amplitude: https://amplitude.com/ • Chargebee: https://www.chargebee.com/ • Zuora: https://www.zuora.com/ • Metronome: https://metronome.com/ • Orb: https://www.withorb.com/ • Monetizing Innovation: How Smart Companies Design the Product Around the Price: https://www.amazon.com/Monetizing-Innovation-Companies-Design-Product/dp/1119240867 • Ask the Storybots on Netflix: https://www.netflix.com/title/80108159 • Madhavan Ramanujam on Lenny’s Podcast: https://www.lennyspodcast.com/videos/the-art-and-science-of-pricing-madhavan-ramanujam-monetizing-innovation-simon-kucher/ — In this episode, we cover: (00:00) Naomi’s background (06:21) Why Evernote wasn’t able to leverage the kind of growth that Notion did (08:06) What founders get wrong when it comes to monetization (12:34) Which features to include in a freemium product (13:22) Day one vs. day one-hundred premium features (15:35) Matching price to value for optimal segmentation (18:50) When pricing should be revisited (19:38) How to determine price, and why it’s a good idea to have a cross-functional pricing team (23:06) How to restructure pricing holistically (25:58) How Envoy learned that they were undercharging (28:39) The importance of experimentation (32:19) How to balance growth with revenue (35:12) What is the modern data stack? (36:45) The modern growth stack (42:22) The importance of experimentation in the growth stack (42:59) Platforms for billing and monetization (46:13) Why a hybrid model of pricing tends to be most used in SaaS companies (49:01) Leveraging AI (49:52) Lightning round — Production and marketing by https://penname.co/. For inquiries about sponsoring the podcast, email podcast@lennyrachitsky.com.

Naomi IonitaguestLenny Rachitskyhost

Jan 11, 202353mWatch on YouTube ↗

WHAT IT’S REALLY ABOUT

Naomi Ionita on pricing, monetization, and the modern growth stack

Naomi Ionita, partner at Menlo Ventures and former growth leader at Evernote and Invoice2Go, explains how startups routinely undervalue and under-monetize their products. She highlights three common pricing mistakes: waiting too long to charge, underpricing (and lacking tiers), and treating pricing as a one-time decision. Naomi walks through a practical pricing process—customer research, value metrics, Van Westendorp surveys, and ongoing experimentation—and shares examples from Evernote, Invoice2Go, Envoy, and Figma. She then introduces her concept of the “modern growth stack”: a set of tools (for product-led sales, experimentation, billing, and AI-powered workflows) that sit on top of the modern data stack to help teams drive growth more efficiently.

IDEAS WORTH REMEMBERING

5 ideas

Start monetizing earlier and avoid overextending the free phase.

Using early users purely as R&D is fine, but waiting too long to charge cheapens perceived value, deprives you of key pricing feedback, and makes the eventual transition to paid more painful. Even with freemium, clarify that there will be paid plans and think strategically about where the paywall sits.

Match price to value using clear value metrics and multiple tiers.

Underpricing is usually less about a low base price and more about not segmenting by willingness to pay. Choose a value metric (e.g., API calls, messages, storage) that scales with customer value, and offer tiers for different personas so power users aren’t paying the same as casual ones.

Design freemium around the ‘aha’ moment and day‑1 vs. day‑100 needs.

Features required to reach the initial “never going back” moment and build habit should be free; advanced or scale-dependent capabilities can live in higher tiers. Keeping early plans simple and pushing complex, later-stage value into upsell tiers both improves UX and monetization.

Treat pricing like your product roadmap—iterate every 6–12 months.

As you ship meaningful product improvements, revisit pricing and packaging rather than ‘setting and forgetting’ them. Regular research, repricing, and tier adjustments can unlock substantial ARR lifts without massive engineering work.

Use structured customer research and frameworks to set initial prices.

Form a cross-functional pricing committee, interview and survey customers on feature importance, and use tools like the Van Westendorp price sensitivity meter to find acceptable price ranges. Combine feature demand (“must-have vs. nice-to-have”) with willingness-to-pay data to shape plans and price points.

WORDS WORTH SAVING

5 quotes

Do not set it and forget it. When your product development work is never done, neither is your pricing.

— Naomi Ionita

If guilt is one of the main reasons why people are paying you, then your free version is too good and you are leaving money on the table.

— Naomi Ionita

You can't retrofit collaboration. You have to be collaboration first.

— Naomi Ionita

I see companies wait way too long to make that shift from building a product to building a business.

— Naomi Ionita

I encourage you to experiment with pricing. Most companies regret not doing it sooner.

— Naomi Ionita

Common monetization and pricing mistakes in early-stage startupsHow and when to start charging for a B2B productDesigning freemium, day‑1 vs. day‑100 features, and value metricsA practical process for setting and evolving pricing (including Van Westendorp)Experimenting with pricing and its impact on ARR and growthCase studies: Evernote, Invoice2Go, Envoy, Figma, and PLG vs. enterpriseThe modern growth stack: tools for PLG sales, experimentation, billing, and AI-driven growth

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