Don't charge from day 1
I don't understand why they say "charge from day 1" when you don't even have a good-enough product to boast (most MVPs), especially for Indie developers. I think that's one reason why most products die prematurely, as many don't even get a single customer. Super applicable for products which don't have major running costs (Most Saas).
Offering value for free, and charging when it really picks up, is the way to go (best to charge for complementary offerings, or only medium/large enterprise customers with differentiated offerings like federated authentication and on-premise solutions). Please tell me I'm wrong.
The best products (Facebook, Snapchat, Twitter, Dribbble, Reddit..) are basically free to use, but they later figured out ways to monetize. Even IH is free.
One strategy is to solve existing problems for which successful businesses exist, and give it away for free (or have a super generous free tier). The biggest cost of building any product is finding the product-market fit. Looking for new avenues or new unique problems to solve, has 90+% probability of failure.
To me, seeing people using my products, has been my biggest motivation to keep building and improving.
Don't let that motivation taken away from you. Don't charge from day 1. Stay humble, stay creative, keep building.
My 2 cents.
Hey @swebdev,
You are not wrong. In the beginning, you want to have the least amount of resistance to get to product market fit. Offering a free tier is a great way to skip a buy decision.
There are a couple of things you have to take into account though.
You have to make money from your service somehow. If you don't offer a paid plan;
So my advice is to offer a generous free plan, and put 2 or 3 paid plans next to it. With the expectation, your early customers won't convert into paying customers.
Cheers,
I whole heatedly agree with the point on the generous free tier. But also to stress the point of setting your expectations for conversation to paid. Especially early on, most customers will not convert to paid.
But I think it is very important to have a pricing page that they see and know exists. This also sets THEIR expectations about your product. They know it won't be free forever. They will likely need to pay at some point
That is probably the most import part of customer discovery in the early stages. Why won't they convert to paying customers? Did they just stop using your service? Why us that?
I disagree. If you charge from the beginning and there are people willing to pay for your product already, it means it truly has potential, compared to something people perhaps use just because it's free. The real test is ask people for money. Also if you wait for the product to be perfect before charging money you can lose a lot IMO.
Depends on the market..markets that have incumbents with strong offerings - its simply not feasible to charge from day 1. Your product has to reach a certain parity with existing competing products before you can truly charge $ and expect ppl to pay.
Decades ago when SaaS wasn't so prevalent and software was mostly developed by large corporates with slow/long release cycles - yea, you could charge from day 1. But these days, SaaS competition is as fierce as ever and charging from day 1 in many cases is no longer feasible.
Totally disagree.
I say charge even before day 1. That's the way to understand if someone would ever pay you, or you're about to work on something no one needs. This applies to starting things in an unclear market.
It's ok for projects which you don't intend to monetize. I think you'll have to be at 10 000 monthly users to start making $100/month. This will happen if you add some feature that people are ready to pay for. It's hard to find such, but easier to experiment when you already have high traffic.
Thank you Denis. When you say above, in context of "This applies to starting things in an unclear market.", are you saying that the opposite would apply for "clear markets"?
By "clear" I meant saturated.
If you launch a food delivery service in London - you are in the saturated market. You know there's a demand because there are already 8 competitors. If you pick the same positioning as them, and they deliver for free - you go raise money and run a very similar business. No need to pre-sell because demand is obvious.
If you launch a "same day rocket parts delivery" - it's an unsaturated market. I doubt that anyone else does it. As no one else delivers rocket parts in 24h, it might be a dead niche. The best way to see if rocket makers need parts delivered within a day is not to ask "would it be cool?" but to pre-sell your service. If it's a burning problem to get parts quickly - they will pay you once you say "give me $X and you'll have an ability to get parts same day in the next 3 months". If they don't give money, most likely they won't pay even when you spend millions to set up a business.
Your "day 1" has semantics issues. Any product has days during development where charging for it makes absolutely no sense.
So unless we clearly define what ready for a pay wall for a product is then saying charge on day 1 or before day 1 isn't saying anything at all.
By charging before day 1 I meant preselling the idea to validate the concept.
Then you aren't actually collecting any money yet but just have a pricing page that shows you will?
Btw just checked Uclusion and I think you can 3x your sign-up rates by fixing the following:
Can share more ideas and help you improve your message, just dm me on Twitter.
Yes totally agree with all points except the last one. We can't create the final marketing yet because the paint is not dry on the UI and don't want to keep re-shooting videos and re-taking screen shots as we make improvements (just too time consuming).
The marketing has improved as the product has but "Welcome to your new development process" is just several revs behind and we haven't had the time to fix it.
On the last point Trello was essentially free almost all the way through acquisition. I've been using Slack for years professionally and never paid a dime. People know that collecting users is king and I'm already compromising towards your view point by charging some small amount in the future.
Everyone realizes that the real cost of going on a new communications / task platform is the risk that it will be hard to learn or buggy. Particularly since we are selling to developers who are infamously known to be immune to marketing games - you can read about how Stripe catered to that mindset.
How much money do you plan to raise for beating Trello without positioning your product for a small niche at first?
Interesting - maybe that would have been the smarter way to go when we first started but that's not what we did.
Also I doubt that strategy would have worked for us as probably we would have failed at the small niche and the raising money and then not had the product we have now either.
No, you actually collect money.
There are 2 ways to approach it.
At least for our market 1. is a pipe dream. There are almost no developer oriented tools where you have to pay before trying. They all have free trial periods.