3 ms·
Thanks to MM for clearing up the subtleties between revenue and run rate in so rigorous a fashion. Will be pointing people to this link for some time to come I
by fitzwatermellow 11y ago
Thanks to MM for clearing up the subtleties between revenue and run rate in so rigorous a fashion. Will be pointing people to this link for some time to come I imagine. If we really want to get sophisticated, I guess we'll have to start modeling startup run rates using differential equations akin to rocket fuel in a spaceship approaching orbital velocity ;)
Which brings me to an interesting point. What happens if your SaaS offering explodes and it appears you should be charging much more for your product? Perhaps even 2-3x with no appreciable loss of customers. For the example of MM, the $500/mo recurring may start to seem low in the coming year as the amount of data and ai features increase. Furthermore, the market is somewhat finite (dealmakers). Can they get away with increasing fees by a large multiple year over year? And if not where will additional revenue come from as its concievable they will need to add more (expensive) data science talent to grow.
- dmor 11y agoLove this question, I think most SaaS companies underprice (including us!). We have raised our prices once since we started, and probably will continue to do this yearly. We make most of our money on expansion revenue (additional seats or services like our API), so the per seat pricing isn't that limiting. But why collect $600 when you could collect $1000? We try to price at the highest point where people will complain but still buy.
- syedkarim 11y ago"try to price at the highest point where people will complain but still buy" --Probably the most elegant pricing advice I've yet to come across.