Need help: Pricing strategy for a developer tool with 400000 users

I need an opinion, I am a developer and in 2019 I built a tool for developers(it falls in collaboration tool category), I set this tool for free and during 2019 we gained around 15000 users, things were going smooth until Covid-19 came and our tool exploded in popularity.

We get around 20000-35000 new users every month and have around 400000 (Four hundred thousand users) in total, every month around 80000-100000 users use it actively. All the traffic was from Google organic and word of mouth, i recruited 2 fellow develops as co-founders and we spent the whole 2020 to develop the features and make it enterprise ready.

It is free until today and from 1st feb 2021 we want to launch a Paid version. Now we are not sure how to price our tool, we have 3 main competitors and the largest one have around 60000 users, but we marketed our service as a free tool. Now we are thinking about having 90% of the features as free and then offer a Pro/Enterprise plan with features like (SSO and integrations) etc in the paid plan.

The challenge is that there are 20-30 other tools poped up in last 12 months and most of them are copying our strategy of marketing it as a free tool. Now how should we approach this, if we go very hard on pricing and locking features we fear that our users will go to those free tools and our growth momentum will fall. On the other hand we also want to have reveneue and also want to reach 1 million users. Please give ur suggestions as I am very depressed due to this situation.

OTHER NOTES: we are a team of 3 developers and have 2 freelance developers, we have not made any money from our tool and received an equity free grant from Govt (In EU we have this option), we were approached by few investors, 1 want 30% equity for 250K USD(we said no), and other is waiting for some paid conversion. We have spent around 50K of our own investment and 75k from the grant until now, monthly infrastructure cost is around 3000 USD

Thank you, I will read this, it looks interesting

Have you, uh, talked to your users? Maybe I've missed it or you forgot to mention it. Your active and large user-base means you're doing some things right and providing value. It's also an extremely valuable resource for you to get feedback from. Figuring out product (and pricing) direction at scale is a lot less guesswork than when you only have a handful of users.

Hello Kohanz, Thanks for the comment, we have talked with few usually when we give a demo (8-10 per week) we ask them what they are looking for and most of them are in the tool because of covid as teams are remote and second it is free tool.

Then there is another segment these are large enterprises and they ask us a lot about security, sso and integrations we have quoted them price from 1 USD per user per month to 10 USD and reaction is mixed some thinks even 1USD is high price for this kind of tool. We know that many of these will convert but do not know exactly how many, the last type is the users who are using the tool for more then one year and they praise the tool as how it has evolved in this time and they get real value but not all of these will convert.

The think i am worried is that our growth happened like this, A dev team from a company started using it and then they like it and in few months it will be 5-15 teams from same company will start using it because they liked it and it was free now

If we go hard with pricing and lockout free users then our growth may suffer, Is it a good idea in our case to offer 90% of the product as free and lockout the remaining 10% features for paid.

One of my friend in SaaS thinks we are crazy stupid to do it like this, he suggests that we lockout the whole product and offer 1 month trial, the people who really needs this will pay and rest will run away, and I do not feel comfortable doing this. Sorry for the long answer but just want to write everything.

Thanks, it is true, until now we have given all our users very good customer service, but going forward we cannot do this for all, we want to focus on the paying users more then the free ones.