Shift from S&M to Product-led Growth: An extension of the previous concept, the revenue center of a company is no longer only in sales and marketing. Today, end users are increasingly relevant to purchasing decisions which means understanding them deeply is more important than ever.

Both of these really came together around the time that Amplitude started with companies like Figma, Airtable, Gusto, etc all taking off in the early 2010s. Next, decision-makers had to shift from being just executives to end users of the product. First, digital products needed to become “recurring” so that you could continuously capture behavior around your product. Rise of bottoms-up businesses: Two things needed to happen for Amplitude’s product to be valuable. As a venture investor, I tend to weigh these market shifts very highly as they help deconstruct future growth assumptions. Why now?Īmplitude sits at the intersection of some powerful market trends that have helped catapult it to its recent direct listing. For this reason, Amplitude has very little competition from older analytics solutions and product analytics will eat more of the total analytics pie. This complexity and scale meant that only large, tech-first companies were able to generate these high-leverage product insights.

It’s simply not possible to run these analyses on Excel and it’s non-trivial to query with SQL. The amount of time we spend on our phones and computers has been up and to the right, resulting in more and more data. As data storage and processing costs continue to come down, it has become more affordable to capture virtually all user behavior. Scale: The second change is just the sheer volume of data that digital products generate. It’s just a bunch of behaviors and actions that businesses are trying to make sense of in order to improve their product. It’s particularly challenging for SaaS products that don’t always have a clear conversion funnel or sequencing to orient around. There’s two elements that made product data different and therefore underserved by incumbent analytics companies:Ĭomplexity: Every “product” has an unbounded number of actions that a user can take and products tend to get more complex as they evolve. It was companies like Amplitude that evangelized the uniqueness of this specific type of data, leading to the creation of the product analytics category. This steady source of rich behavioral data means that businesses can make better decisions more quickly. Any action you take as a customer can be captured and analyzed later. When you open up DoorDash ( DASH ) on your phone, it will capture data on which cuisine you picked, which filters you chose, which tabs you chose, and so on. You can think of product data as any data a user generates while using a product.

The key difference is that Amplitude is working with “product data”. This transition from Mad Men to Moneyball requires a cultural change which Amplitude enables by providing the right tools.Īnalytics companies have been around for a long time: Tableau ( CRM) was founded in 2003 and Alteryx ( AYX) even earlier in 1997. Amplitude helps businesses transition away from intuition-driven decisions (think Mad Men) to data-driven ones (think Moneyball). The company enables any organization to make data-driven decisions relating to their product with an easy-to-use interface. MarketĪmplitude is pioneering the “product analytics” category. With significant market tailwinds and an unrealized net expansion story, I believe the stock presents a compelling buying opportunity. As product organizations have become the center of gravity for any technology-focused business, Amplitude's ( NASDAQ: AMPL) analytics product has emerged as the category leader in enterprise.

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