Ask HN: How to price a service that saves hundreds of engineering hours?

You can price based on eng time saved, but the rejoinder will be that the devs use test time to answer emails, respond in slack/jira, etc. And to some extent that's probably true.

I do have some very strong advice on how not to charge: (1) do not charge based on your costs (customers won't care), and (2) do not charge based on fine-grained usage. The latter is important because if a VPE signs a contract for $3k/mo, he/she doesn't want to sit there worrying that devs run a couple extra tests or add a few tests, etc, and boom: all of a sudden the VPE is going to the cfo to explain $10k in overage charges.

So: price in broad tiers, and price based on value. If you save hundreds of eng hours/mo, charge for the first 20 hours saved. At $150 per, that's $3k/mo. Multiply by 5 to have a functional company (you can't do sales for under $10k; every successful sale -- which will be 20% if you're very good and lucky -- must pay for all failed sales, all marketing, all dev, etc. Oh, and you're doing sales.) So $15k/mo. That's within the approval authority for a vpe with 50 reports.

And accept that bigger companies don't worry about $2k-$3k/mo. So maybe your target should also be smaller shops that can't accept the infra overhead to build this out, but will buy a cheap solution that saves their 1-4 devs a ton of time. Dunno.

edit: and you need a strong cross-tenant security story.

I have the opposite experience. LocalStorage can leak between tests and that has been an issue for years: https://github.com/cypress-io/cypress/issues/2695

Ask your customers. Propose your current amount and be honest "do you think this is fair?" If they say yes great! If not, ask what they think is reasonable. Set yourself a lower limit to keep it profitable for yourself.

"Sorry I can't price it below X". See how they respond.

You need to determine which type of customer you’re targeting.

At the high end, some enterprise companies won’t blink at the prices you’re suggesting. However, they will expect a level of customer support and service agreements that are going to make you work hard to deliver what they ask. You’re also going to need to be heavily involved in sales cycles and support, which will start costing you many, many hours just to get the sale.

Are you prepared to handle this and stay responsive? If not, you will have mixed results pushing high priced offerings, especially if they have deal-breaker limitations (like your 30 second test limit) that could saddle the customer with even more work to integrate and use your tool. You have to acknowledge that your service isn’t purely savings for the customer. It’s work to implement and maintain on their end, as well as handle billing and so on. You cannot make sweeping calculations about savings without ignoring the costs it brings to a company to add your tool.

On the other end of the spectrum, you could target the self-serve market with lower priced services. These offerings can get away with a “take it or leave it” type of service where customers are mostly on their own to evaluate, pay for, and self-support the software. If the tool is good, engineers will try to make it work. However, I suspect you’re massively overestimating the way that test times are a blocker for most engineer workflows. Even with long text suites, we don’t just sit and stare at the monitor while we wait. That’s time for responding to communications, checking other things, taking a short break and so on. You could have a hard time selling engineers on the idea that they can do more work and take fewer breaks while paying for the privilege. Choose your marketing angle wisely.

Just to clarify, 30 second limitation is only in the context of 1 minute test-result guarantee. Tests can technically run indefinitely, though I want to design the business model in such a way that discourages the long individual tests, as it aligns the incentives of platform and the client.