Earlier quoted context omitted.
Thank you, I will read this, it looks interesting
Just to follow up, I’m also in the B2B SaaS space and positioning ourselves as the “premium” option with the highest price definitely helps separate the wheat from the chaff. Every time we offered a discount to a business they turned out to be the neediest, sucking up a disproportionate amount of support resource. Every single time.
Need help: Pricing strategy for a developer tool with 400000 users
11–20 of 47 posts
Re: Need help: Pricing strategy for a developer tool with 400000 users
#12Pricing, after naming in coding is a really slippery concept.
1) You could draw a line in the sand and move new feature into paid plans. This might be tough.
2) If you move enterprise type features (sso, custom domains, branding) into an enterprise “call us” plan it will not be suprising. Many companies buy software this way.
Generally speaking, it will be helpful to discover your pricing gates where people can make a decision without an approval. Usually that’s $250/mo, $500/mo, all the way up to $5k depending on the industry and size of client.
The path ahead is to test one hypothesis of pricing, or many. You could make one interpretation of how to reorganize your feature to plans, to realize it needs ongoing experimentation. It would not be unusual to adjust your plans more than a few times.
3) My best advice is to recommend a flexible pricing experiment engine, I’m a fan of using/implementing a feature flag management system in combination with a subscription management system. It can built in grandfathering (good karma and referrals), but also provide data on every type of plan you’ve tried.
We ended up being able to run multiple pricing structures of the same features to address much more of the product. It became a differentiator because competitors could not bill as discretely and effectively.
I have a few (dozen) pricing articles I’d be happy to email your way. I’d have to dig them up and publish them to a link for you otherwise I’d share them now.
Relevant background: I bootstrapped an online learning system which also took off due to solving user problems and not copying others.
Over time, competitors copied more and more of what we built but we were able to accidentally delay it for several years.. the best thing we did was talk to customer segments liberally but avoid startup hype circles and not pitching to people who weren’t potential customers or allies. For better or worse, startup circles are full of folks looking to poorly implement an idea or space they didn’t understand and in some industries existing competitors they were building to maintain a desktop centric past.
If you are working in a historically slowly evolving area (as I am in EdTech), many people look to others on where to go, which is very odd.
Happy to connect and chat offline, my email is in my profile.
Re: Need help: Pricing strategy for a developer tool with 400000 users
#13Re: Need help: Pricing strategy for a developer tool with 400000 users
#14Have 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…
The numbers you are contemplating here are shockingly low — 1000x too low — for enterprise SaaS. Questions about security and SSO are “tells” that you’re dealing with a very different kind of customer.
If you want to sell to large enterprises, this patio11 article is a good start: https://training.kalzumeus.com/newsletters/archive/enterpris...
Do you or your co-founders have a strong sales background? If not, skip the whole enterprise sales thing for now and focus on converting consumer accounts. With half a million users, even a low conversion rate at a low price point should turn this into a profitable business.
Re: Need help: Pricing strategy for a developer tool with 400000 users
#15Have 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…
You don't need to reduce your free offering to make space for a paid plan - not right now, at least. Maybe you will eventually, but if you think you still have space to grow your free plan and it the unit economics are manageable for you, that's a half million or so and growing hot leads for your paid plan.
> 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 an entire engineering organization with multiple teams is using your product, the vast majority will pay for it if you find the right features, pricing and positioning. A small dev team at an unfunded, pre-revenue startup might want to pinch pennies some, but if orgs that have a significant sized engineering team are starting to use your tool, paying a reasonable amount monthly is a rounding error compared to the cost of their salaries.
> 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.
There is always difficulty in getting people to go from free to paid. It doesn't matter how much the pricetag is, there's resistance to pulling out the wallet across the board. You shouldn't be trying to minimize the price of your product. In fact, I'd personally look at a $1 price tag and wonder if the software is robust enough to use at my organization. It would make me NOT want to buy it. Price it reasonably. Some people will never pay for your product. Your goal isn't to convert all of your users to paid accounts, your goal is to convert enough people at an appropriate pricing structure for you to have a sustainable, successful business.
Re: Need help: Pricing strategy for a developer tool with 400000 users
#16Re: Need help: Pricing strategy for a developer tool with 400000 users
#17Earlier quoted context omitted.
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…
> 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. The numbers you are contemplating here are shockingly low — 1000x too low — for enterprise SaaS. Questions about security and SSO are “tells” that you’re…
Re: Need help: Pricing strategy for a developer tool with 400000 users
#18Earlier quoted context omitted.
> 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. The numbers you are contemplating here are shockingly low — 1000x too low — for enterprise SaaS. Questions about security and SSO are “tells” that you’re…
Enterprise SAAS charge between $1,000 and $10,000 USD per seat per month?
Re: Need help: Pricing strategy for a developer tool with 400000 users
#19I've done a lot of pricing work for various developer tools products and at established companies like DigitalOcean and AWS.
Feel free to contact me and I'm happy to help (both with pricing and attempting to lift spirits as you call out depression) for free if you'd like: bpschaechter at gmail.
Re: Need help: Pricing strategy for a developer tool with 400000 users
#20Earlier quoted context omitted.
> 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. The numbers you are contemplating here are shockingly low — 1000x too low — for enterprise SaaS. Questions about security and SSO are “tells” that you’re…
Enterprise SAAS charge between $1,000 and $10,000 USD per seat per month?