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The Cost of Free Doughnuts: 70 Years of Regret

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Re: The Cost of Free Doughnuts: 70 Years of Regret

#81

Post by TAForObvReasons »

tomjakubowski wrote: post #68
013a wrote: post #57

I can call out one example of a poorly executed price raise: Apollo Engine ( https://www.apollographql.com/pricing ) There was a time when they charged for data points/performance traces ingested into the system. At our scale, we were paying around $100/month. We were prepared to scale that to their, I think it was, $550/month plan when our usage got that high. They relatively recently changed their structure to char…

In general for SaaS, does it make sense to let customers choose between two (or more) pricing models, depending on their needs? Does this cause too much complication for the business? Curious why I haven't noticed schemes like this, other than at "enterprise" tiers where the customer is paying a lot for something closer to a custom solution and prices are negotiated.

It makes sense for the pricing to be aligned with what the users perceive as their usage/value. In any other shape, customers can and will adjust their usage or switch to something else.

When you start selling per-seat licenses, everyone is incentivized to reshape usage so that only one seat is needed. That one seat is used by a team member who becomes the internal expert on the service, while everyone else turns to him or her for help

Re: The Cost of Free Doughnuts: 70 Years of Regret

#83

Post by wpietri »

throwaway3999 wrote: post #60
dperfect wrote: post #26

It's true - charging for something that was once free can be risky, but it isn't always bad as some might believe. I have great respect for businesses that charge for a service that provides real value - even if it was once free. Often times (especially in the startup world), companies start out offering a free product (operating at a loss) to gain market share. It's not often the best strategy, but in some markets i…

There's a common theme on HN that it's all the fault of consumers for wanting free stuff. The truth is, budgets are limited, and if you start charging for stuff you will soon find out how much consumers actually value it - with respect with other stuff they can buy. I'm not talking about the average HN user making six figures in a cushy software job - of course you'd pay for a product like Gmail. But think about most…

I'm sure that's much of it. But some people just really like free stuff. I used to volunteer at a conference series with a $5k price tag. Many of the attendees were wealthy. But when we put out free stuff on the giveaway table, even stuff they could easily buy, a lot of those rich people were very grabby.

Re: The Cost of Free Doughnuts: 70 Years of Regret

#84

Post by heavenlyblue »

blakesterz wrote: post #66
afterburner wrote: post #41

Earlier quoted context omitted.

Was there something wrong with the way the exit survey was asked/written? Because that is remarkable. Was maybe part of the issue that people leaving when the exit survey was being run (at "night") not representative of the visitors as a whole?

Great questions, I wondered how they got it so wrong, I still wonder how they got it so wrong. It never occurred to me it may have been time of day they asked the questions.

Or people who answer surveys have more money

Re: The Cost of Free Doughnuts: 70 Years of Regret

#85

Post by jankotek »

ThrowawayR2 wrote: post #22
jankotek wrote: post #6

>The problem isn't the price Price was absolutely the problem. Soldiers were paid about $600 year. Not much for a job where you risk your life and dont have much of personal freedom or comfort. Free food was part of benefits. Charging soldiers for it seems ludicrous, they can not just leave, and go to nearest cafe.

> " Free food was part of benefits " The Red Cross is a civilian organization that is not part of the army and was not, as far as I know, obligated to provide free donuts or coffee.

Army asked for it, anyway politics are irrelevant to feelings.

Pay was $50 a month, doughnut was 2 cents, that is like 1% paycut.

Re: The Cost of Free Doughnuts: 70 Years of Regret

#86

Post by jerf »

blakesterz wrote: post #66
afterburner wrote: post #41

Earlier quoted context omitted.

Was there something wrong with the way the exit survey was asked/written? Because that is remarkable. Was maybe part of the issue that people leaving when the exit survey was being run (at "night") not representative of the visitors as a whole?

Great questions, I wondered how they got it so wrong, I still wonder how they got it so wrong. It never occurred to me it may have been time of day they asked the questions.

There's a big difference between spending hypothetical dollars and real dollars, no matter how much you ask people to please try really really hard to pretend they're spending real dollars.

It's a recurring element in the recurring "I Tried To Start A SaaS Business And It Crashed And Burned Taking My Will To Live With It" posts on HN... "I asked some people if they'd be willing to buy it and they said yes, were very encouraging, until I asked them to actually buy it."

Re: The Cost of Free Doughnuts: 70 Years of Regret

#87

Post by leetcrew »

throwaway3999 wrote: post #60
dperfect wrote: post #26

It's true - charging for something that was once free can be risky, but it isn't always bad as some might believe. I have great respect for businesses that charge for a service that provides real value - even if it was once free. Often times (especially in the startup world), companies start out offering a free product (operating at a loss) to gain market share. It's not often the best strategy, but in some markets i…

There's a common theme on HN that it's all the fault of consumers for wanting free stuff. The truth is, budgets are limited, and if you start charging for stuff you will soon find out how much consumers actually value it - with respect with other stuff they can buy. I'm not talking about the average HN user making six figures in a cushy software job - of course you'd pay for a product like Gmail. But think about most…

I imagine people probably would pay for gmail if they didn't get a free account through their ISP. it wasn't too long ago that email was either a paid service or bundled with an internet connection.

I don't get the vibe that HN thinks the current state of affairs is completely the fault of the customers. it's a two way street. companies offer free services either at a loss or supported by ads or data mining. once people have a free option, it takes a lot of value add to get them to actually pay for a competing solution.

Re: The Cost of Free Doughnuts: 70 Years of Regret

#88

Post by wpietri »

_bxg1 wrote: post #51
MaxBarraclough wrote: post #49

Earlier quoted context omitted.

A similar thing happens in the podcasting space. It's a pity it's still quite inconvenient to make micropayments. If I could make a single click to pay a penny for access to a single article, I imagine I'd do so frequently.

This is what the Brave browser is attempting to do, with mixed success

There's also scroll.com, which is more netflix-y: you pay a fixed amount per month and it gets paid out to particpating sites you visit.

Re: The Cost of Free Doughnuts: 70 Years of Regret

#89

Post by Zenbit_UX »

karaterobot wrote: post #69

I didn't know about the Red Cross and its donuts. The example I've always used for this is helping a friend move. If the friend asks "hey, will you help me move? I'm buying pizza and beer afterwards!" I will more than likely say yes, even though I can buy my own pizza and beer. If they instead say "hey, will you help me move? I'll pay you $21.58 for your time," I'd probably bristle. Even though that might be the equi…

You got weird friends, no one's ever had to ask or bribe me, I would just offer to help.

In turn I'd also be uncomfortable asking others to do manual labor for me, if they didn't offer when I said I was moving I wouldn't ask. Buying them supper after would be a given, no bribe required.

Re: The Cost of Free Doughnuts: 70 Years of Regret

#90

Post by ooobit2 »

013a wrote: post #57

I can call out one example of a poorly executed price raise: Apollo Engine ( https://www.apollographql.com/pricing ) There was a time when they charged for data points/performance traces ingested into the system. At our scale, we were paying around $100/month. We were prepared to scale that to their, I think it was, $550/month plan when our usage got that high. They relatively recently changed their structure to char…

From an SE/SO professional, can I rant here for a moment?

Marketing and Product rag on Sales a lot for discounting. Nevermind the fact that we own the touchpoints with an account, so it only makes sense that we'd know what any individual account needs. I've had this issue with Marketing and Product professionals since I started in Sales, and even more-so when I took over Sales Enablement and Sales Ops.

For one, pricing is a big deal, but value is bigger. I could sell you on that $1500/user easily by giving you a work product that factors the product roadmap, your business roadmap, and makes a compelling ROI case for you. I'm willing to give you those 8-11 hours.

But we both know it'll be wasted. Because in 90 days, Marketing will push a discount campaign that conflicts with preexisting agreements, and thereby throws all of that work product up in the air. We'd have to go back to square one and recalculate everything to see if a deal even exists. Or Product decides to drop the roadmap, delay a feature, realign to attempt to capture more of a saturated market.

You know who sets pricing? Pricing experts. And maybe, just maybe, if they spent five minutes on a discovery call with you, they'd understand why you bring up discounts, why I would rather give you the discount, and why both of us walk away knowing we missed an opportunity for quality relationship-building.

I tried this once with an account. We locked their pricing down, pushed a work product out justifying our use case. The account came back and requested we drop the discount, that they saw the additional upfront cost (nearly $40k+) as an investment in our roadmap that could return utility for them sooner rather than later. We made it six months post-close before Marketing and Product decided to completely drop the current roadmap and work on something else. I had to issue more than $22k back to that account, and we got forced into RFP by the parent org, which we lost and subsequently lost all business from them, domestic and international.

So. Thank you for airing your perspective. And just know that people like me have stormed in and out of meetings, and still do, trying to stop this BS.

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