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Ask HN: Putting a price on your app?
Releasing a web based productivity app in a couple months.
I noticed that there is always a lot of talk about product-market fit and general startup tips about finding cofounders and lifestyle changes but I haven't found anything good about pricing.
Anyway, our project has one constraint: we're not seeking outside investment so the app has to sustain itself.
Server costs per user will probably be hovering around $2-3/month (mostly bandwidth charges).. This is obviously a hosted solution where the kind of pricing that would make the most sense is some kind of monthly charge.
Couple of questions:
Is it ok to change prices around in the beginning to find where the market price is i.e. what gets us the most customers?
What's your take on the 2-tiered Google Apps model (Free ad supported or Premier) vs the 6 tiered Basecamp or Freshbook pricing matrix models (seemingly a more traditional approach)..?
My teammates and I do consulting on the side so we're not worried about immediate cashflow. So we're leaning more towards building an audience and breaking even than making substantial profits. Does that sound reasonable?
Lastly, anyone know of any resources or books that have helped them get a better feel for pricing strategy?
Thanks in advance for any suggestions..
ps. Thought this post was pretty good: http://news.ycombinator.com/item?id=910144
- ErrantX 17y ago> Is it ok to change prices around in the beginning Not really... or rather you risk pissing off users. However if you take an initial 3 or 4 month hit to run a free "beta" of some description that might help you figure out reasonable pricing. At that point you will be able to a) confirm the exact cost per user per month b) ask actual working customers (in a survey) what they would be prepared to pay Such data would be invaluable in fixing a final release price.
- fjabre 17y agoSounds reasonable. We may just have to take the hit. It might also be a good idea to float around a limited number of beta passes.
- ErrantX 17y agoOh yeh; releasing it in a limited way is the best move in my eyes. I mostly suggested that approach because you said immediate money wasn't a huge concern (always good!). The way I see it, if you make a limited initial beta for a reasonable length of time (say 3 months) and make sure you pick people who will actively use the service (that's the hard bit) then you: - have an active user base who are very highly likely to convert to immediate paid accounts, especially if you sweeten it just a tad for them as beta users :D - get final stage beta testing while still on limited release - get your first real public product feedback; always useful for setting a price that is fair but not off putting! (can I ask what it is your putting together? If it's too early just say no :D)
- fjabre 17y agoSomething along the lines of a highrisehq.com competitor. We're about a 6 weeks away from a private beta launch.. So pricing is coming up quite a bit. =)
- ErrantX 17y agosounds interesting; add my email (it's in my profile) to your lists if you have any - that's something my employer might be interested in in the near future.
- fjabre 17y agoWill do. Thanks ErrantX. You've inspired me to seriously consider putting up a splash page asking for email addresses - to be notified when it's released.
- HeyLaughingBoy 17y agoI love this talk about pricing software: http://venturehacks.com/articles/pricing http://venturehacks.com/articles/pricing I've had it on my MP3 player for about a year and I only just noticed it's by Steve Blank! Audio's a bit crappy in the beginning, but gets better.
- fjabre 17y agoThanks.. Listening to it now.. EDIT: Quite entertaining and informative.. Only thing I would say is it's more about enterprise software. He does make some great points about not under-pricing your app and how engineers tend to do this.
- pclark 17y agogreat ebook on pricing: http://www.neildavidson.com/dontjustrollthedice.html http://www.neildavidson.com/dontjustrollthedice.html
- fjabre 17y agoHalf way through it. Great read and the PDF is free. Thanks!
- Vandy_Travis 17y agoDo the Steve Blank price-boxing experiment. "How much would you use this if it were free? $50 / month? $1 million dollars?" Your customers will tell you what they're willing to pay. If that number is below your operating costs, however, be prepared to either drastically change your model or move into another business.