A Framework for Evaluating the Right Strategy for Your Startup by @ttunguz
tomtunguz.com
5 ideas
·462 reads
7
Learn more about business with this collection
How to start a successful business
How to build a strong team
How to market your business
Price per seat or user?
Madhavan Ramanujam, board member and Partner at Simon-Kucher & Partners (a global strategy consulting firm) answered this question during Office Hours at Redpoint in Aug 2021. He is the author of Monetizing Innovation.
Massive companies have been built using both pricing structures: Salesforce and Adobe bill per seat while Snowflake and Twilio charge per use. Deciding which to use involves considering factors such as customer preference and competition.
17
256 reads
When to use per seat pricing
If your customers demand predictable bills, then per seat pricing is the way to go. The question is do they prefer it or do they demand it? Most customers will prefer predictability, but won’t necessarily demand it. Would they switch if the pricing weren’t predictable? That’s a question worth examining in your pricing research.
If you would like to create switching costs, per seat pricing with annual contracts establishes some lock-in. Usage pricing provides more flexibility to customers to try alternatives.
20
53 reads
When to use usage based pricing
If your costs scale with usage then usage based pricing aligns your costs with your customers' spend. This prevents very large customers from being your worst customers, by generating lots of revenue, but costing you money because the account is gross-margin negative.
If you are pursuing a two step go-to-market strategy with which the first user has a low willingness to pay, but the ultimate buyer has a larger budget, consider usage pricing. This is a land-and-expand motion.
If customers use the product intermittently and the value is intermittent, usage based pricing works well.
20
46 reads
The most common pricing mistake
Madhavan tells that the most common pricing mistake in a land and expand motion is to cede too much value in the free/lesser product, scuttling any expansion opportunity.
18
58 reads
The hybrid approach
There are many companies who employ a two-part tariff: a base platform fee and an ongoing usage fee to capture positive aspects of both types of pricing strategies. Segment is a good example of this.
The platform fee establishes a stable relationship and the usage pricing enables the customer to scale up or down as a function of their traffic which might vary throughout the year.
19
49 reads
CURATED BY
More like this
4 ideas
4 ideas
3 Ways to Employ Complex Usage-Based Pricing
chargify.com
5 ideas
Subscription Pricing Models
priceintelligently.com
Explore the World’s
Best Ideas
200,000+ ideas on pretty much any topic. Created by the smartest people around & well-organized so you can explore at will.
An Idea for Everything
Explore the biggest library of insights. And we've infused it with powerful filtering tools so you can easily find what you need.
Knowledge Library
Powerful Saving & Organizational Tools
Save ideas for later reading, for personalized stashes, or for remembering it later.
Start
31 ideas
Start
44 ideas
# Personal Growth
Take Your Ideas
Anywhere
Organize your ideas & listen on the go. And with Pro, there are no limits.
Listen on the go
Just press play and we take care of the words.
Never worry about spotty connections
No Internet access? No problem. Within the mobile app, all your ideas are available, even when offline.
Get Organized with Stashes
Ideas for your next work project? Quotes that inspire you? Put them in the right place so you never lose them.
Start
47 ideas
Start
75 ideas
My Stashes
Join
2 Million Stashers
4.8
5,740 Reviews
App Store
4.7
72,690 Reviews
Google Play
Ashley Anthony
This app is LOADED with RELEVANT, HELPFUL, AND EDUCATIONAL material. It is creatively intellectual, yet minimal enough to not overstimulate and create a learning block. I am exceptionally impressed with this app!
“
samz905
Don’t look further if you love learning new things. A refreshing concept that provides quick ideas for busy thought leaders.
“
Sean Green
Great interesting short snippets of informative articles. Highly recommended to anyone who loves information and lacks patience.
“
Shankul Varada
Best app ever! You heard it right. This app has helped me get back on my quest to get things done while equipping myself with knowledge everyday.
“
Ghazala Begum
Even five minutes a day will improve your thinking. I've come across new ideas and learnt to improve existing ways to become more motivated, confident and happier.
“
Giovanna Scalzone
Brilliant. It feels fresh and encouraging. So many interesting pieces of information that are just enough to absorb and apply. So happy I found this.
“
Laetitia Berton
I have only been using it for a few days now, but I have found answers to questions I had never consciously formulated, or to problems I face everyday at work or at home. I wish I had found this earlier, highly recommended!
“
Jamyson Haug
Great for quick bits of information and interesting ideas around whatever topics you are interested in. Visually, it looks great as well.
“
Read & Learn
20x Faster
without
deepstash
with
deepstash
with
deepstash
Access to 200,000+ ideas
—
Access to the mobile app
—
Unlimited idea saving & library
—
—
Unlimited history
—
—
Unlimited listening to ideas
—
—
Downloading & offline access
—
—
Personalized recommendations
—
—
Supercharge your mind with one idea per day
Enter your email and spend 1 minute every day to learn something new.
I agree to receive email updates