When do you charge for your product?
I'm struggling with how to release a paid product. Do you launch the free tier first so you can collect feedback? Do you start charging from day one? Do you even show a pricing page if you haven't received user feedback?
I plan on implementing 3-5 pricing tiers for Testerbot. Something like Hobby/Individual/Open-Source, Startup, Agency/Pro, and Enterprise.
At the moment, I'm not sure if each tier will offer incremental functionality or charge based on scale/per domain. Perhaps, a combination of both. I fear charging too soon for a potentially buggy product or poor UX.
I'm curious about what kind of strategies you applied when you first released a paid product and what has or hasn't worked for you. Thanks!
If you know what you're going to charge (or at least think you have an idea) then I don't see any reason not to start charging right away. If you're charging based on usage then it should be easy since you already have the functionality you'll be charging for. If you're charging for extra features, you might want to start with just the cheapest plan and work your way up since you won't necessarily have the features built for the more expensive plans.
One thing a lot of people say which I disagree with is that you should charge before you even have a product. I heard all the podcasts and read all the blog posts and bought into that approach, and then I actually tried it and found it to be really difficult. I mean think about it, would you ever pay for a product that doesn't exist? My experience is that everyone will just say "sounds good, let me know when it's ready and I'll pay for it then".
So I don't think it makes sense to waste time selling vaporware, but once you have something built that actually provides value to someone, it's important to start charging so you can validate that people will pay for it.
Final thought: I'd suggest listening to the "Art of Product" podcast. One of the hosts launched a product called Tuple maybe a year ago and since then he's talked a lot about how he has explored pricing. He basically had users sign up to get an early invite without publishing any pricing, and then he talked to them to see what they were willing to pay. He experimented with different approaches, all while keeping the pricing private so that whatever he lands on in the end doesn't seem like a bait and switch.
Thank you for that validation and suggesting the podcast. I will listen to that it on my way home this evening.
I'm splitting my time to work on a landing page to collect early signups so I can build an audience (I really suck at this). Worse case, the landing page will end up with signup/login links when I launch.
I will try to release a free beta version in the next month and followup with the first paid tier. I won't need to provide a trial for the paid version so that's a good thing.
The ultimate test of product/market fit is customers paying real cash. You never charge too soon. Best to collect money before you release a MVP and refund if need be.
Good point. I suppose I should create a paid version of the free tier with relaxed constraints and experiment.