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Thank you for sharing your experience. It's the style of life I want to pursue. I'm starting a B2B SAAS business (the dream) on the side where I also plan to w

by hu3 4y ago

Thank you for sharing your experience. It's the style of life I want to pursue. I'm starting a B2B SAAS business (the dream) on the side where I also plan to work on my own (no investors, no employees) and maybe be helped by my wife. My question to you is: Do you have experience with free tiers? I'm thinking about having a free tier to lure in customers and allow them to play around with the app without having to commit their credit-card right away.

Axsuul 4y ago
I wouldn’t recommend it early stage since it can be a distraction and use up lots of support bandwidth. And you should be focusing on paid customers and the features that will bring value instead. But like everything in business, it depends (on the idea, vitality nature of it, etc)
rudasn 4y ago
B2B cofounder here. It may be more helpful to you if you frame your question as "what can I build that would make them want to commit their credit card right away". Focus on what exactly your customer would be paying for, and build that, as opposed to what may look interesting to some random visitor to your site.
jwr 4y ago
I do have a free tier, but it is for a different segment (hobbyists), and no "conversions" from free to paid are expected. In a way, I maintain it as a hobby and a service to the community, also hoping for some PR and visibility. In general, I would strongly discourage a free tier in B2B SaaS. Nothing that has value is free. If you need to offer something for free to "lure in" customers, then I'd say your main offering does not provide enough value. Also, you will be "luring in" customers who expect and want free stuff, this is not the kind of customer you want. Do not get caught in the race to the bottom with your pricing. Do not listen to pricing advice on HN: people here are not your customers. Many expect B2B SaaS to offer $19/month plans, which is impossible. In my opinion, any B2B SaaS with an ARPU lower than $50/month is doomed to fail. If you find a counter-example, it will be a company burning through VC money to get "user growth", or a loss leader from a big corporation. Think about it this way: at $19/month you are looking at $228/year revenue from a customer. Ignoring all other costs, if you spend ONE HOUR PER YEAR supporting that customer, you are already losing money. Build something that provides real value to businesses, price your service fairly, err on the high side, and see what happens. Trying without having to commit is important, but that's what free trials are for. I had free trials with a credit card required for the first few years, because I was afraid of the support load. Then I switched to free trials with no credit card required and in retrospect I should have gone with that from the beginning, since the niche I'm operating in is fairly small and most of my customers are smart engineers, so support load wasn't an issue.

by hu3 4y ago

Axsuul 4y ago

I wouldn’t recommend it early stage since it can be a distraction and use up lots of support bandwidth. And you should be focusing on paid customers and the features that will bring value instead. But like everything in business, it depends (on the idea, vitality nature of it, etc)

rudasn 4y ago

B2B cofounder here. It may be more helpful to you if you frame your question as "what can I build that would make them want to commit their credit card right away". Focus on what exactly your customer would be paying for, and build that, as opposed to what may look interesting to some random visitor to your site.

jwr 4y ago

I do have a free tier, but it is for a different segment (hobbyists), and no "conversions" from free to paid are expected. In a way, I maintain it as a hobby and a service to the community, also hoping for some PR and visibility. In general, I would strongly discourage a free tier in B2B SaaS. Nothing that has value is free. If you need to offer something for free to "lure in" customers, then I'd say your main offering does not provide enough value. Also, you will be "luring in" customers who expect and want free stuff, this is not the kind of customer you want. Do not get caught in the race to the bottom with your pricing. Do not listen to pricing advice on HN: people here are not your customers. Many expect B2B SaaS to offer $19/month plans, which is impossible. In my opinion, any B2B SaaS with an ARPU lower than $50/month is doomed to fail. If you find a counter-example, it will be a company burning through VC money to get "user growth", or a loss leader from a big corporation. Think about it this way: at $19/month you are looking at $228/year revenue from a customer. Ignoring all other costs, if you spend ONE HOUR PER YEAR supporting that customer, you are already losing money. Build something that provides real value to businesses, price your service fairly, err on the high side, and see what happens. Trying without having to commit is important, but that's what free trials are for. I had free trials with a credit card required for the first few years, because I was afraid of the support load. Then I switched to free trials with no credit card required and in retrospect I should have gone with that from the beginning, since the niche I'm operating in is fairly small and most of my customers are smart engineers, so support load wasn't an issue.