What do you think about this pricing model? Douchey or no?
I am just about to release my app into live launch from beta. The TLDR of it is that it helps coffee aficionados and home baristas keep track of their coffee recipes so that they can consistently make good cups of coffee with their different beans, as every bean is different.
IMO, it's not a very big problem that this app solves, and I [somewhat ruefully] recognize that.
I am thinking that I will price it as follows:
- absolutely free - you can have just one bean in the app, with unlimited recipes.
- sign up as a free member - 3 bean limit
- something cheap like $10/yr - paid membership with unlimited recipes, cloud backup, etc.
But what I don't know is if people will feel like I'm being stingy/douchey with that "1 bean for free" pricing model, but there's also not a lot of scope for me to have revenue generation without this "trial" approach. E.g. if I were to offer a free version that allowed for unlimited beans and recipes, I'm not sure what I could scale into that would warrant a paid version.
Thanks so much for your time.
I would keep it free for the start unless you have a long waiting list of users and focus on user generation/marketing first. Far less complexity and if you only have 100 users and 3% convert it's really not worth the effort to monetize tbh.
Then, I would try to monetize through sponsored content by specialty coffee brands and coffee making equipment. Your audience is perfect for them. Make a few packages (cheap: interview + coupon for your users, expensive: article about a tasting with video with ads). Should always be a win-win for your users.
Lastly, once you have enough users, offer them a premium service. (Never take anything away from free users)
Hi Ruby, thanks for the input. I think my biggest concern with this approach -- and why I want to think at least a little about long-term pricing stuff from the start -- is that if I were to offer an unrestricted version of the app for free right from the get go, without any expectation set that it's a temporary thing, and then one day tell people they have to pay for what they previously got for free, I would imagine that would rub a lot of people the wrong way. Of course, in that case, I could grandfather in all of those free users into the premium plan for free, and maybe that's the option that's the best of both worlds. What are your thoughts there?
I think that's a great idea about the sponsored content. I've been thinking a lot about what the "important problem" is that people in my audience have, and for many of them it's probably finding interesting new beans to try. For me, having an app that remembers recipes is highly valuable because I have such a crappy memory, but I think mine's worse than most. ;) So I really like that idea, thanks.
I think the thing I struggle with here is offering a premium service on top of this initial set of functionality -- I have trouble thinking of anything software oriented that would be a natural vertical expansion for the app as a premium thing. The best ideas I have there are more oriented around a monthly club where they'd pay $100 or whatever and get a bunch of different coffees selected for them based on their taste preferences. But maybe that's the exact sort of thing you're suggesting, and the core recipe section of the app merely acts as a lead gen for the more "businessy" part of the app, which is the facilitating of the beans. IDK.
Anyway, I got off on a bit of a rambly tangent there, but the TLDR is that I appreciate your input and it also makes me a little nervous. :)
Thinking out loud: I think this is a good option.. The downside is you’re trying to “sell it” to two customers/markets (the barista and the sponsor). Possibly lucrative, possibly a lot of effort.. 🤷♂️
I like the idea of freemium for this, which I usually don't suggest to founders. Here is why.
You really need to figure out the value metric of your product, a.k.a. "What metric increases the delight and enjoyment of my customers?"
Is that the number of beans? What are the chances of this number having some sort of ceiling? How many different beans will the median aficionado have? Are you risking limiting your potential revenue by choosing this?
Is that the number of recipes? Does that scale linearly with the beans? Is this something that can scale way beyond a factor of 1x-2x*beans? Are there network effects between the users of your platform that would make access to other people's recipes an interesting thing? Can you build a community around this and monetize interactions / referrals / affiliates?
What else could be that metric? The number of times a recipe is accessed? Finding stores where the beans are sold? The number of coffees brewed and tracked?
Once you know which metrics are the leading indicators of customer value generation, you can play it safe and have an unlimited plan as you suggest with the yearly $10 subscription. While this won't allow you to build a sustainable business immediately, it will give you access to paying customers and their feedback. That might be more valuable than figuring out the perfect price right now, which is unlikely to happen.
As an aside: recently, I used Untappd as I like craft beer. The features of that app are amazing, as they are all centered around the social aspects: where did you drink, with whom, what beer, how much did you like it, where is that beer from, where was it bought, how was it presented. That kind of data and connectedness will allow for interesting revenue sources beyond subscriptions.
Hi Arvid, thanks for the response. Also super-loved your recent podcast episode; so many moments while listening where I was like, "God, that's so awesome. Gotta remember that." :)
I think the biggest value metric at this point would be the recipes -- specifically how many they've created and how often they access existing ones. And yes, it could scale well beyond 1 or 2x the bean quantity. Someone could pretty realistically have 20 recipes for a bean if they use myriad brew methods and clone recipes for gradual permutations rather than editing them.
I've thought a lot about the community aspect, and to be honest, it's tough. I want nothing more than to be able to find an objective way for users to share recipes with each other, but most coffee grinders are different (even often the same make and model), so I can't just say "Put your grinder on setting 10" and have it mean anything. And the nature of coffee -- especially espresso -- is that being even a little off with your grind can drastically change the flavor in the cup.
Perhaps instead of trying to allow users to share their recipes, I instead incorporate the social component around sharing beans they like. Maybe users set up their profiles and indicate their taste preferences, and that's the basis for me recommending beans to people. E.g. if I know that Arvid also likes fruity natural processed Ethiopian coffees, and he really likes XYZ bag by ABC roaster, maybe I will too.
My long-term vision for the app is that I would partner with roasters and be able to get tasting notes & bean info from them, which I could then use as a basis to recommend beans for people to try, based on what they've rated well in the past. But this would be pretty far in the future.
I'll check out Untappd for ideas; thanks for that. I've had a hunch for a while that the same concept behind Bean Beast would be largely applicable to things like cigars, wine, craft beers, etc. and it sounds like that's what they've done + a clever incorporation of the social aspects.
So with all that said, whaddaya think? Do you like the idea of this 3-tier thing with a non-signed-up trial, a free membership, and paid, or perhaps simplified into free membership (non-optional signup once you open the app) and paid?
Thanks,
Zach
Thanks for the kind words, Zach, much appreciated!
Thank you as well for explaining the inner workings of your product and the value metric to me. Recipes do sound like they'd be the thing that is the core value generator of the product, and I feel they are the thing that price tiers should be built upon.
I think being able to use the application with a shadow account is fine, as nobody wants to give up their data before receiving value. I would limit that completely free tier significantly. "Two beans with two recipes each. Anything above? Hand over your email address." sounds like a fair trade of value vs. data to me. Three tiers with severe limits for shadow and free sounds like a good plan for your product.
You could even incentivize the shadow->paid conversion, skipping the free account with a 10% off coupon or something.
And don't worry about the social aspects too much. If you find something that works, that's great. It's not required. It DOES make marketing much easier, so keep looking for a meaningful way for customers to collaborate. Even if it's just voting for pictures of the funniest coffee mugs or something silly.
I appreciate hearing about your long-term partnership plans. Those sound spot-on. Also interesting (random bag of ideas here) as partners/sponsors/marketing channels: coffee distributors, environmental/social justice activists, local food markets/portals, co-working spaces, food festivals, artisanal stores.
This is all really great feedback, thanks.
I love the idea of photo sharing as well. A few of my beta users have expressed interest in being able to upload photos of their recipes when they brew a cup; that could be a natural tie-in for a sharing aspect, and could easily feature the "sexiest espresso shot of the day" somewhere in the app for that social component.
Really interesting partnership/marketing ideas. Many of these I had never even whatsoever considered before. Thanks.
I feel like with just your replies to my comments on here, I've gotten a few very very high-value ideas; thanks so much. Nice to see you moving in this direction of thought leadership towards bootstrapped founders [tie-in intended] -- you've got a real knack for it.
Thanks so much, Zach! I'm happy you find value in my reply.
After running a business at full speed for years, solving problems every day, I can't just stop doing that. I get a lot of joy out of giving my opinion (when asked), both in the community and as a consultant.
It's so great to see projects like yours being built. A clear audience, clear problem, clear solution. I wish you the best of luck and a lot of success.
I live in Berlin, a place with a lot of coffee aficionados. If you ever need contact with local roasters or others, send me a DM on Twitter. A prior project, a hilariously failed attempt at building a local food portal, has left me with good relationships with the local artisanal food scene. You never know when stuff like this becomes useful. Looks like it might here.
Thanks Arvid; you may one day find that I take you up on that offer so hopefully you meant it. ;) And if you're ever in Denver or Tbilisi, let me know if you want me to make you a fancy-ass cup of coffee that you probably won't like.
I hope we both mean it!
Hi Zach, cool product with a defined niche!
I definitely get your thoughts behind the current price model. Not knowing about the competition and acknowledging that I might miss out on details, I'd however make it a) a little simpler, b) give maximum value from the get-go, and c) charge a value metric that allows for this. As a result, this would be my suggestion:
This way, every user can get started with the full power of your product before having to commit. And I assume that those, who has more than 5 recipes would be likely to pay - independent of the amount of beans they use.
Hope this make sense but feel to correct my assumptions or share questions :)
Hi @kildegaardp, thanks for the response. In your definition of "free member" there, is that defined as someone who has simply downloaded the app, or someone who has downloaded it and set up a free acct, aka opted in to my email list?
Really interesting perspective on limiting not the beans but the recipes! I think this is a great example of me very much thinking like an in-the-weeds developer on this, since I am used to seeing the flow be roasters -> beans -> recipes from how I've structured everything. I think this is a good idea, thanks. :)
Could be either but since you've got the users attention I'd might as well ask for their email (not necessarily anything else) - could turn out to be quite a valuable email list with a defined audience of coffee geeks.
Yeah, guess that happens to most of us - glad I could help with a different perspective :)
Do you have an idea of how many different types of beans your target user might regularly cycle through? How many recipes can a single bean have? Also what's the difference between absolutely free and sign up for a free member?
I certainly don't think this is "douchey" but maybe my definition of "douchey" is outdated :) Personally I think it might make sense if you change your "Absolutely free" tier to a "Sign up as a free member" tier. Your free tier is basically your trial tier without any time limit. I would even take it a step further and limit the number of recipes too. Don't be afraid to charge and you're likely not going to get your pricing right from the start, anyway!
Hey Jen, thanks for the response. It's tough to say for sure because everyone's different. I personally like to have 2-4 types of beans at home at once, but I know many home barista folks who have just one or two. I'd pretty much never have more than 5.
The true value in the app (at least for me with my crappy memory) is when there's a specific bean that I know I had purchased a few months ago, but I can't for the life of me remember what grind setting, temperature, etc. I brewed it at. Having that record of how I brewed it when I last had it allows me to save some beans and not have to dial in so much.
Recipes could be used differently, depending if someone is more likely to clone a recipe or edit it when they want to make tweaks as their bean "ages." (generally as the bean becomes further off roast you have to change your brewing parameters a bit) So I guess a "normal" use case for someone who makes both espresso and pourover might be like 5-10 recipes per bean.
The difference between the two tiers (absolutely free vs free member) is that my initial inclination is that I would not want to have the ability to use my app be behind an opt-in gate, and that I'd rather give people a little taste without any commitment, and then ascending levels of commitment = more functionality. I think you labeling that "absolutely free" tier as a "trial tier" is apt.
So just to understand what you're recommending, are you saying something like....
?
Thanks so much,
Zach
I think that's a good way to start and looks like other IH'ers have given you great advice here as well. Do you have a landing page yet and are you active in any home brewer enthusiast communities?
I am active in a couple of coffee communities, but haven't yet built the landing page -- want to finish the damned app first. ;)
I haven't yet thought of a good nuanced way to market Bean Beast in my coffee communities, but I'll have to think of some. Up until now, I've just sort of directly asked people if they were interested in the idea when taking on beta testers.
I just wanted to say thank you guys all so much for the wonderful input. I can't put a dollar value on the takeaways and good things to think about that I've gotten from just this one thread; thanks so so much. IH is an awesome community and I'm so grateful to get to be a part of it.
How are you planning to monetize the free member sign ups?
Just by keeping them updated about new features, etc that get released to premium members, and perhaps with a generalized marketing funnel as well to ideally get them to upgrade their membership if it's a good fit