7 ms·
I think pricing is the very first thing you should think about, before features. Once you know what's actually valuable to your customers, it'll be easy to figu
by qeorge 12y ago
I think pricing is the very first thing you should think about, before features. Once you know what's actually valuable to your customers, it'll be easy to figure out what features to build to deliver it.
This book probably isn't an excellent fit for freemium pricing models. Its more about pricing B2B products, instead of consumer products. But you should still read the book anyway, because it teaches you to understand your customers' problems (and the value of solving those problems) at such a deep level that you would never be willing to part with that much value again for free.
Furthermore, and this is the big takeaway from the book, you're[1] looking at the problem backwards. The question is not, "can I find someone to whom my product is worth at least X" - that's flawed from the start.
The correct process is this:
1) Find a customer with a problem
2) Figure out how much its worth to the customer to have that problem solved ($X)
3) See if you can design and a product for less than $X
For example:
1) The local cab company wants to grow its business
2) It is currently making $300,000 per year. A 50% increase would be worth $150,000 (naively)
3) Could you create a white label Uber that would increase ridership by 50% for less than $150,000?
Thinking about it that way, there's no room for freemium. If you're thinking about freemium, you should find a new customer base or a new problem to solve.
(BTW, I love talking about pricing. Please shoot me an email any time if you'd like to talk more. I have a new SaaS that I would love feedback on, and I would be happy to offer my feedback on yours as well.)
[1] the proverbial you're (including me!)
- Flenser 12y agoWith freemium, would the question be: How much, in real dollars, is it worth to my premium customers if I added a free tier?