The Cost of Free Doughnuts: 70 Years of Regret

Per-user billing works when the value is obvious and the price is low.

If you have a B2B SaaS product your goal should be optimizing for getting the maximum users in an organization. The more people who use your product:

- The harder it is to move off your product

- If people like the product, when they leave, they'll evangelize your product to their next employer

- It's less likely that different teams/business units/etc will try a competitor's product because there's no seats available for them (and the money is going to come out of their budget anyway--they might as well decide on the product)

- You're not causing friction for team leads who have to justify budgets every year

How many people have worked somewhere where there's 50 seats paid for and you can't go to 51 because that takes you from "Pro" to "Enterprise" at a huge jump? There's way too much shenanigans that goes on because companies make paying them money painful.

I've been working on evaluations of several enterprise developer tools in the last month and without fail all have licensing requirements that are per-seat and painful. The result has been that instead of the whole organization embracing the tool, a much smaller set of users is going to get it. The thing that's crazy is that the cost to the SaaS provider has nothing to do with the number of users.

> They figured out how much the average guest paid for drinks

It sounds like the margin was part of the ticket price increase. So it was a success in that more people came to the park because they thought they were getting a better deal and were happier about it because "free drinks".

I think you've badly missed the point.

If you take issue with an analogy, try one that fits your experiences better.

You offer to help, and then your friend says: "awesome, afterwards I'll buy you pizza and beer" vs "awesome, afterwards I'll pay you $21.58".

The order of offering vs asking for help wasn't at issue in the analogy.

This is a good cautionary tale and one I've seen played out in the tech industry with food. Even in the 80's it wasn't uncommon for a tech company to have a "beer bust" on Friday's where drinks and snacks were served as a social gathering for employees at the end of the work week. It was a turning point in employee relations when the VP of HR at Sun cancelled the weekly beer bust. Similarly at Google when they decided to scale back the legendary "mini-kitchens" full of snacks, "healthy alternatives" that were slowly pared down.

One sociologist I read wrote, and I'm paraphrasing, "Sharing food with another is an action of great significance. Evolutionary, the sharing of food by hunter gatherers was more significant than sex in establishing a mutually bonding relationship." They went on to discuss the importance that meals played in our history and why we "throw a feast" to welcome heroes, and the Jesus' "big reveal" happened at a meal.

The main point was that when you share food with someone you trigger a very ancient and well established mechanism. Conversely, when you stop sharing food with someone, you signal their ancient brain "I don't trust you any more, we aren't friends."

Now whether or not that thought/emotion comes to the surface, it's very clear that the for many people the change from "sharing food with you" to "not sharing food with you" changes how they see their relationship with you. What is perhaps worse is that the damage is instant and irreversible. Even if you start sharing again, the people you stopped sharing with, even temporarily[1], will no longer feel the same trust that they felt before.

At tech companies those people leave and eventually you have all employees who only remember the current system and so you're at a new "normal."

Bottom line, taking away "free" food is waaaay more impactful on company morale/relationships than you would ever imagine unless you had researched it. Thus, it happens over and over again. And even though I know a company is just trying to make me like it by giving me free food, I can't keep myself from being positively effected by it. That response is buried somewhere deep inside my head that doesn't allow for excision.

[1] Yes, there are ways to temporarily stop and not disconnect but that involves messaging before one stops sharing to both provide the external reason for the change and the conditions on which the change would revert back to sharing.

I've been on both sides so I understand your perspective.

Everyone wants to sell on _value_ and in an ideal world you could go up the food chain and say, "hey, if we spend $10,000 on this, we save $100,000 in employee hours". That should be the easiest decision in the world, especially if you could come back in a year and figure out it was really $105,000.

However budgeting in just about any organization I've been involved in doesn't work like that. You ask for $10,000 and there's no budget for it. Even if there is, there's no guarantee that next year you're not going to have to "tighten belts" and "sharpen pencils".