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The whole charged-per-user SaaS culture is stupid. SaaS had to be priced somehow, then someday someone came up with the idea of charging per-user and everybody

The whole charged-per-user SaaS culture is stupid. SaaS had to be priced somehow, then someday someone came up with the idea of charging per-user and everybody followed that up, but it is not smart. Most SMB end up sharing accounts, which makes your product look worse than it actually is and at the same time makes your users miserable.

joshuakarjala 9y ago
I think for many companies at least it's just the easiest way to somehow approximate value created for the customer. When the business matures one could argue that services should gain a stronger measurement of value created for their customers and charge correlating to this. With regards to the SMB scenario I agree - and probably it would make sense for many services to have a base bundle tier with 5 or so accounts. And then price it based on some minimum value created. But also hard to do this if your competition is offering 1 user for $2.99.
thirdsun 9y ago
That's one of the reasons I love Basecamp's pricing model - a flat $99/month for as many users as you'd like.
- rtx 9y ago
  We recently decided to follow that path, but for us additional users will not have any significant increase in cost.
wastedhours 9y ago
SMBs work that way, but it's an interesting way into the enterprise through "dark procurement" (essentially teams going rogue, buying a service without IT's knowledge, IT finds out, a business case is made... and boom... 2000 paying users instead of 1, having managed to subvert the usual pitching processes). I agree, it's not right for a lot of products (some of which are better charged at a flat fee, or a per "thing" basis), but it's not a stupid decision for a lot of businesses.
a13n 9y ago
I agree with you that per-user pricing doesn't make for an ideal SMB experience. We specifically avoided it for our SaaS tool for the reasons you mention. That said, the costs of SMBs getting away with one login do not outweigh the benefits of getting to charge enterprises per user. Most of these tools with free tiers and per-user pricing (Slack, Airtable) make most of their money from enterprise, not SMB. Therefore I don't agree with you that it's "stupid" or "not smart".

joshuakarjala 9y ago

I think for many companies at least it's just the easiest way to somehow approximate value created for the customer. When the business matures one could argue that services should gain a stronger measurement of value created for their customers and charge correlating to this. With regards to the SMB scenario I agree - and probably it would make sense for many services to have a base bundle tier with 5 or so accounts. And then price it based on some minimum value created. But also hard to do this if your competition is offering 1 user for $2.99.

thirdsun 9y ago

That's one of the reasons I love Basecamp's pricing model - a flat $99/month for as many users as you'd like.

rtx 9y ago
We recently decided to follow that path, but for us additional users will not have any significant increase in cost.

wastedhours 9y ago

SMBs work that way, but it's an interesting way into the enterprise through "dark procurement" (essentially teams going rogue, buying a service without IT's knowledge, IT finds out, a business case is made... and boom... 2000 paying users instead of 1, having managed to subvert the usual pitching processes). I agree, it's not right for a lot of products (some of which are better charged at a flat fee, or a per "thing" basis), but it's not a stupid decision for a lot of businesses.

a13n 9y ago

I agree with you that per-user pricing doesn't make for an ideal SMB experience. We specifically avoided it for our SaaS tool for the reasons you mention. That said, the costs of SMBs getting away with one login do not outweigh the benefits of getting to charge enterprises per user. Most of these tools with free tiers and per-user pricing (Slack, Airtable) make most of their money from enterprise, not SMB. Therefore I don't agree with you that it's "stupid" or "not smart".