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So if a firm with 50,000 employees signs up, you'll charge them $49? You should reconsider this pricing model because a client of any considerable size is both
by uptown 7y ago
So if a firm with 50,000 employees signs up, you'll charge them $49?
You should reconsider this pricing model because a client of any considerable size is both able and willing to pay for a product that is financially stable. $49 won't keep the lights on, and the fear of investing time and data into a system that won't survive financially due to poor pricing might scare off some potential customers.
- drikerf 7y agoI don't think that big of a firm will sign up. I'm building a CRM for small businesses and makers. I don't think that large firms would enjoy it.
- tyre 7y agoStill useful to have. The most basic version would be something like: 1. up to 10 users: $49/mo 2. 11–25 users: $99/mo 3. 26–100 users: $199/mo 4. 101+ users: call me EDIT: As anyone who has tried to buy a CRM will know, these prices are crazy low. Which is a good thing!
- drikerf 7y agoSure! I like to keep it simple. Might add it in the future :).
- mbesto 7y ago> As anyone who has tried to buy a CRM will know, these prices are crazy low. Which is a good thing! No, no it's not. CRM is incredibly valuable to any business and if your software provider can't sustain it's own businesses because they charge too little, the last thing you want to deal with is switching costs (direct costs and hassle) when they go under.
- chipotle_coyote 7y agoYou're right about the switching costs if an SaaS provider goes under. But assuming $50/month is unsustainable for the feature set and service guarantees this company provides seems, well, to assume a lot. If they were trying to provide features competitive with Salesforce, maybe, but are they? (And can we really be sure that Salesforce would collapse if they weren't charging $150/user/mo for their "most popular" plan?)
- mbesto 7y agoEven if you are able to get 1,000 customers at $50/month, that's only $50k/month or $600k/year. That's barely enough to provide enough support personnel and hosting costs alone to support 1k clients.
- fernandotakai 7y agoyeah. if you have 50k employees, you are already using salesforce with a LOT of custom code/workflow. a lot people seem to forget that there's a lot of b2b on the small-to-medium size.
- a012 7y agoEven for a 100 people size company, charging $49 IS giveaway.
- eitland 7y ago> don't think that big of a firm will sign up. Better make sure they don't then so you won't have to support a large company that signed up because of the low price.
- koonsolo 7y agoSome problems you want to have. A huge firm signing up is definitely a problem you want to have. I was first introduced to this concept by a colleague who was going to serve customers manually instead of us programmers automating it. I said he was going to have a major issue when lots of people sign up. He replied "That is definitely a problem I want to have, I hope I get completely overloaded, because then we have the money to automate it". I guess it is related to Paul Grahams "do things that don't scale", but "problem I want to have" is broader. Since then I always evaluate if certain problems are the ones I want to have, because then I know I can postpone them.
- hobofan 7y ago> because then we have the money to automate it I think you are missing the point that in this case you _don't_ have the money.
- emteycz 7y agoI am sure they are perfectly able to negotiate once the usage gets out of hand.
- koonsolo 7y agoIf a big company with 50,000 employees is your customer, you must be pretty blind or stubborn to not get the money you want.
- chipotle_coyote 7y agoThe problem is what zaroth outlined at the start of this thread: the big company doesn't start as your customer. They start out as "Hi, we're a Fortune 500 company and we'll become your Number One Customer if you jump through these hoops...before we sign a contract!" And you start jumping. And there are more hoops. And you jump. And they have a strategy change and blow you off for six months, then come back with a different set of hoops. And you jump. And you jump. And you've spent hundreds of thousand of dollars for the promise of getting that big customer, on the belief that they'll surely sign and that other customers of their size will follow. And they don't sign. And it turns out what you worked on for them isn't something other customers of their size really quite want. But if you jump through these hoops...
- johnwheeler 7y agoThis is an unnecessary worry. How about they cross that bridge when they get there? If they spent time worrying about all that _could_ go wrong, they’d of never have built anything. People who spend time worrying about what could go wrong don’t make good business operators. The truth is, when you get a business off the ground so many things go fantastically wrong and so many go fantastically right and you’ll have not anticipated any of it. Let the person who built this CRM focus on the only thing they really need to worry about: building an awesome product and getting people to pay them for it.
- behringer 7y agopart of getting people to pay for it is pricing it properly. No business in their right mind would trust a tool that costs 49/mo for 50k users.
- johnwheeler 7y agoYeah because you know, NOW really is the best time to prepare themselves for being the next Salesforce or Office 365. Don't you think it's a just little premature for that scale of thinking? I mean, they just got the thing posted on HN.
- behringer 7y agoIt's not premature. It sets expectations. If you can't set expectations for the buyer, they just won't buy.
- GordonS 7y agoI think there is somewhere in between a startup and Salesforce size - at this pricing, even small businesses are going to be wary. $49/m is just so obviously underpriced that it rings alarm bells - how could that possibly be sustainable, will it still be around in 6 months?
- paggle 7y agoIt’s not that - it’s that as a 6-person team who is a target customer, I don’t want to get a bunch of my data locked in to a system that’s not priced to sustain the company.
- adrianmsmith 7y agobasecamp manages it. They charge a flat fee, no matter how many users: https://basecamp.com/pricing https://basecamp.com/pricing They blogged (alas can't find the link now) they did that deliberately in order not to be beholden to larger customers, they wanted to treat all customers equally.
- nightski 7y agoCouldn't they choose to not be beholden to larger customers regardless of the pricing? That seems like a business choice that is independent of the pricing model.
- adrianmsmith 7y agoAlas I can't find the link, it was a really great article, I've just spent about 10 minutes searching for it. From memory, their logic was that even if you decide to treat all customers equally, if you have one customer with 1k seats paying $30k, and another with 1 seat paying $30, you'll just end up treating the customers differently, it's just human nature, and there's nothing you can really do about that.
- perk 7y agoHere it is: https://m.signalvnoise.com/why-we-never-sold-basecamp-by-the-seat/ https://m.signalvnoise.com/why-we-never-sold-basecamp-by-the...