Naomi Ionita
Partner at Menlo Ventures, former growth leader at Evernote and invoice2go
Where to hear and read about Naomi Ionita1 episode or test
Naomi Ionita is a partner at Menlo Ventures who invests in early-stage SaaS from seed to Series B, after leading growth at Evernote and product and growth at invoice2go. The thing most worth learning from her is to charge early, price to the value each segment gets, and revisit pricing as often as the product roadmap.
if guilt is one of the main reasons why people are paying you then your free version is too good
How to price your product | Naomi Ionita (Menlo Ventures)
Naomi Ionita: the story and the lessons
1Naomi Ionita's path from engineer to growth leader to investor
Ionita moved from engineering and consulting into product, then built early growth functions. She started in engineering and consulting, moved into product from 2006, and at Evernote grew from a core product role into growth. Evernote went from about 10 to 100 million users in her time there, from 2011.
The acronym PLG did not exist yet. She saw herself as a user-focused, data-driven product person, and started growth work with colleagues, hypotheses and experiments.
At invoice2go she ran product, data, growth, engineering, design and research. invoice2go was a bootstrapped mobile SMB company and the top grossing business app at the time.
Board members there sent her to help their portfolio companies with growth and pricing. That advising work led her into venture.
Her parents are her biggest inspiration. They moved across three continents and arrived in the US with nothing, then built careers in three languages with no financial support or network.
2What Evernote taught Ionita about pricing and growth limits
She read guilt-driven upgrades as a sign the free plan was too good. One of the most popular reasons users gave for converting to Evernote's $45 a year plan was guilt about how much they used it.
Her rule: survey free users on why they upgraded, and if guilt ranks high, the paywall is in the wrong place.
Evernote's single premium tier underpriced avid users and overpriced casual ones. New users compared it to the free notepad already on their device. Avid users ran it on every device, relied on OCR and the Web Clipper, and said they got hundreds of dollars of value.
Early revenue ran to tens of millions, but she calls the approach sub-optimal. The research led to different plans for different personas based on value received and willingness to pay.
Evernote went many years before overhauling its pricing. She names three common founder mistakes: waiting too long to monetize, underpricing, and setting a price and forgetting it.
Her summary of the pattern: teams labor over design and features, then pluck a price from thin air.
Evernote's solo design capped its growth, and collaboration cannot be retrofitted. It was built as a personal second brain and was philosophically anti-social, so it never crossed from single player to teams or became a large, high-ACV sales contract.
Multiplayer lifts acquisition through referrals, retention through shared workflows, and monetization as revenue scales with usage. Figma, Jira and Linear became the default platforms for their work this way.
3Ionita's rules for when and what to charge
Ionita says paying is the true product market fit signal. Free beta users are a useful R&D class, but the job is to shift from building a product to building a business.
Waiting cheapens the product, hides what people will pay, and sets up backlash when charging finally starts. She prioritizes the roadmap by what people will pay for.
She supports freemium if the paid plan is planned from the start. The core utility stays free so users feel delight in the first session or day, and free users lower acquisition cost through virality and network effects.
The target reaction is that users are never going back to the old way. The real question is where the paywall goes.
Ionita splits premium features into day one and day 100. Features that deliver value the first time someone uses the product go in the first paid plan. Advanced features, or ones that pay off only with enough data, go in a Pro plan sold later as an upsell.
At invoice2go this rebalancing doubled the upgrade rate from Starter to Pro while the Pro price rose about 30 percent. She calls that rare, since a higher price normally means lower conversion.
She prices on a value metric so revenue rises with usage. Units can be API calls, messages sent, terabytes stored or words written, so you earn more as customers use more.
Because CFOs want predictable bills, she favors a hybrid: good, better, best tiers with a quota on the value metric. Only about 5 percent of SaaS companies use pure usage-based pricing.
She will trade early revenue for growth only with a path up market. Figma monetized slowly, then grew exponentially after team and enterprise packages. More than half its users were not designers once it was embedded in the enterprise.
Without that path, she frames early free users as a sweetheart year-one discount and treats them as design partners.
4How Ionita researches and sets a price
Ionita gives pricing to a cross-functional committee, not one department. In a PLG company it is product managers and data scientists. In enterprise SaaS, sales, finance and revops join.
Its first job is talking to customers through surveys and interviews to learn who they are, why they pay and what they value. She revisits pricing every six to 12 months.
She ranks features to find the one or two that drive conversion. Users mark each feature must-have, nice to have or not necessary, or spend 100 points across features, which stops them from asking for everything.
Users rarely convert equally across a feature list, so this shows what belongs behind the paywall.
She uses Van Westendorp questions to find willingness to pay. Show a package of must-have and nice-to-have features and ask four questions: so cheap you doubt quality, a good deal, expensive but still payable, and too expensive.
Plotting the four curves shows where to price.
5Ionita on testing and restructuring pricing
She asks for more than feels comfortable to find the price ceiling. Envoy's founder quoted 10x the usual price to a hospitality prospect and the exec agreed without hesitation, showing the price was far too low.
She says losing 20 to 30 percent of deals on price is reasonable, and that prices can often go up 2x, 4x or even 10x. Lenny preferred stepping up 2 to 3x until buyers push back. She agrees on incrementality but wants segments and enough data points.
She changes pricing and packaging as a whole, not one number. She has seen revenue lifts of up to 10x. The cause is hard to isolate, since changes often come with product work, a rebrand or a new enterprise plan.
Her approach is to learn what people want and will pay, then map plans to the journey from single player to first connected person to team to wall to wall.
She cites benchmarks showing monetization is an underused growth lever. OpenView found about half of companies that changed pricing saw ARR rise at least 25 percent. ProfitWell found a 1 percent monetization gain moved the bottom line four times more than one in acquisition.
Most companies regret not changing pricing sooner, and it needs no big technical overhaul.
At invoice2go she built in-house metering and a pricing experiment system. It tested value metrics, quota limits, price points and promotions, and tracked pay-as-you-go consumption to nudge users to convert, upgrade or renew at quota limits.
It was a big growth engineering project, but the revenue gains made it worthwhile.
She runs pricing tests in small markets and judges them on year-two churn. Tests ran in Canada or Australia before the US so the experience stayed consistent across the product, pricing page, app stores and lifecycle emails.
A test only counts as a win once its effect on churn is clear. A one-time discount, for example, needs a look at how those users behave in year two.
How to price your product | Naomi Ionita (Menlo Ventures)
Naomi Ionita explains how to find, test and revisit pricing: when to start charging, how to segment plans by value, and how to run pricing research and experiments. She backs it with results such as doubling the upgrade rate while raising price about 30 percent at invoice2go and Envoy's 10x price test.
Ionita moved from engineering and consulting into product, then built early growth functions. She started in engineering and consulting, moved into product from 2006, and at Evernote grew from a core product role into growth. Evernote went from about 10 to 100 million users in her time there, from 2011.
The acronym PLG did not exist yet. She saw herself as a user-focused, data-driven product person, and started growth work with colleagues, hypotheses and experiments.
At invoice2go she ran product, data, growth, engineering, design and research. invoice2go was a bootstrapped mobile SMB company and the top grossing business app at the time.
Board members there sent her to help their portfolio companies with growth and pricing. That advising work led her into venture.
Her parents are her biggest inspiration. They moved across three continents and arrived in the US with nothing, then built careers in three languages with no financial support or network.
She read guilt-driven upgrades as a sign the free plan was too good. One of the most popular reasons users gave for converting to Evernote's $45 a year plan was guilt about how much they used it.
Her rule: survey free users on why they upgraded, and if guilt ranks high, the paywall is in the wrong place.
Evernote's single premium tier underpriced avid users and overpriced casual ones. New users compared it to the free notepad already on their device. Avid users ran it on every device, relied on OCR and the Web Clipper, and said they got hundreds of dollars of value.
Early revenue ran to tens of millions, but she calls the approach sub-optimal. The research led to different plans for different personas based on value received and willingness to pay.
Evernote went many years before overhauling its pricing. She names three common founder mistakes: waiting too long to monetize, underpricing, and setting a price and forgetting it.
Her summary of the pattern: teams labor over design and features, then pluck a price from thin air.
Evernote's solo design capped its growth, and collaboration cannot be retrofitted. It was built as a personal second brain and was philosophically anti-social, so it never crossed from single player to teams or became a large, high-ACV sales contract.
Multiplayer lifts acquisition through referrals, retention through shared workflows, and monetization as revenue scales with usage. Figma, Jira and Linear became the default platforms for their work this way.
Ionita says paying is the true product market fit signal. Free beta users are a useful R&D class, but the job is to shift from building a product to building a business.
Waiting cheapens the product, hides what people will pay, and sets up backlash when charging finally starts. She prioritizes the roadmap by what people will pay for.
She supports freemium if the paid plan is planned from the start. The core utility stays free so users feel delight in the first session or day, and free users lower acquisition cost through virality and network effects.
The target reaction is that users are never going back to the old way. The real question is where the paywall goes.
Ionita splits premium features into day one and day 100. Features that deliver value the first time someone uses the product go in the first paid plan. Advanced features, or ones that pay off only with enough data, go in a Pro plan sold later as an upsell.
At invoice2go this rebalancing doubled the upgrade rate from Starter to Pro while the Pro price rose about 30 percent. She calls that rare, since a higher price normally means lower conversion.
She prices on a value metric so revenue rises with usage. Units can be API calls, messages sent, terabytes stored or words written, so you earn more as customers use more.
Because CFOs want predictable bills, she favors a hybrid: good, better, best tiers with a quota on the value metric. Only about 5 percent of SaaS companies use pure usage-based pricing.
She will trade early revenue for growth only with a path up market. Figma monetized slowly, then grew exponentially after team and enterprise packages. More than half its users were not designers once it was embedded in the enterprise.
Without that path, she frames early free users as a sweetheart year-one discount and treats them as design partners.
Ionita gives pricing to a cross-functional committee, not one department. In a PLG company it is product managers and data scientists. In enterprise SaaS, sales, finance and revops join.
Its first job is talking to customers through surveys and interviews to learn who they are, why they pay and what they value. She revisits pricing every six to 12 months.
She ranks features to find the one or two that drive conversion. Users mark each feature must-have, nice to have or not necessary, or spend 100 points across features, which stops them from asking for everything.
Users rarely convert equally across a feature list, so this shows what belongs behind the paywall.
She uses Van Westendorp questions to find willingness to pay. Show a package of must-have and nice-to-have features and ask four questions: so cheap you doubt quality, a good deal, expensive but still payable, and too expensive.
Plotting the four curves shows where to price.
She asks for more than feels comfortable to find the price ceiling. Envoy's founder quoted 10x the usual price to a hospitality prospect and the exec agreed without hesitation, showing the price was far too low.
She says losing 20 to 30 percent of deals on price is reasonable, and that prices can often go up 2x, 4x or even 10x. Lenny preferred stepping up 2 to 3x until buyers push back. She agrees on incrementality but wants segments and enough data points.
She changes pricing and packaging as a whole, not one number. She has seen revenue lifts of up to 10x. The cause is hard to isolate, since changes often come with product work, a rebrand or a new enterprise plan.
Her approach is to learn what people want and will pay, then map plans to the journey from single player to first connected person to team to wall to wall.
She cites benchmarks showing monetization is an underused growth lever. OpenView found about half of companies that changed pricing saw ARR rise at least 25 percent. ProfitWell found a 1 percent monetization gain moved the bottom line four times more than one in acquisition.
Most companies regret not changing pricing sooner, and it needs no big technical overhaul.
At invoice2go she built in-house metering and a pricing experiment system. It tested value metrics, quota limits, price points and promotions, and tracked pay-as-you-go consumption to nudge users to convert, upgrade or renew at quota limits.
It was a big growth engineering project, but the revenue gains made it worthwhile.
She runs pricing tests in small markets and judges them on year-two churn. Tests ran in Canada or Australia before the US so the experience stayed consistent across the product, pricing page, app stores and lifecycle emails.
A test only counts as a win once its effect on churn is clear. A one-time discount, for example, needs a look at how those users behave in year two.