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19 Comments

Raised prices by 5x

Today I launched new pricing plans at a higher price point than before. (existing customers stay at their original price point).

I think as indie hackers we have a tendency to under-price our products. Part of this is a natural fear of asking for more money for something we've created. Another part is that we are following the crowd of other indie hackers charging < $10 a month for a SaaS product.

Well, I've had enough of that! ;)

Today I'm realigning my roadmap. My lowest pricing tier is now $49 per month with a mid tier at $99 per month. This automatically puts you in a different headspace when thinking about the product roadmap. I should be able to deliver $99 worth of value every month to the right customer - maybe I need to tweak the feature set and maybe I need to work at finding the right customer segment, but I feel it will be more productive than scrabbling around for $9 subscriptions from other indie hackers.

Nothing against indie hackers (I am one after all!) but we shouldn't be pricing our products for the indie market, IMO. It's unsustainable.

More details in the blog post below!
https://www.mojosaas.com/articles/don-t-charge-a-month-for-your-product/

  1. 7

    I really liked this part from the Indiehackers interview with John O'Nolan on early pricing for Ghost:

    "One key lesson we learned early on was not to charge too little. $5/month customers are just terrible. They have the highest rate of failed payments, the highest rate of credit card fraud, the highest amount of support tickets submitted, and are the least friendly people. We've doubled our prices 3x since then, and each time we do, we get nicer people who value the product more and create fewer problems."

    I'd rather focus on developing the product for nice customers than help terrible customers with their problems.

    https://www.indiehackers.com/interview/ghost-14e5bac2fa

    1. 1

      thanks this is great too. This is where indiehackers becomes so valuable, not just people promoting

  2. 7

    Hell ya! I'm a big fan of Patrick McKenzie and his "Charge More" philosophy. I agree with everything you're saying, it's a lot easier to provide value when you actually charge for it.

    We just 3x our prices at The Match Artist, and wow that really gives us the margin to do what we need to do and provide a ton of value to our clients that can afford us.

    1. 1

      Haha, I just knew somebody would mention Patrick in the comments, with a title like that.

      "Charge more" is a great shorthand for "this person's views on entrepreneurship likely align with mine, and we can start this conversation from common ground"

      (also congrats on you raising the prices 3x as well)

  3. 3

    Thanks for sharing.

    You make a good point that Indie Hackers interested in building a sustainable business should charge more, or pivot to products where they can. You follow that by saying that you believe you can provide $99 of value to the right customer. That strikes me as unlikely given your current offering although I'll be happy to have been proven wrong.

    Not only do you need to provide $99 worth of value but you should also think about the opportunity cost that that $99 represents. For $99/month businesses have gotten used to getting access to entire product suites like Intercom, Salesforce (4 users) or the entire Adobe Creative Suite ($74).

    The calculation I would personally make is not "will I earn back my $99" but "how does the ROI on this compare to other things we can do for $99 per month?" Your products don't fair too well faced with the second question.

    Combined with the fact that these products so far don't seem to be particularly defensible (in other words they are easily and quickly cloned), I don't see this strategy paying off. And if it does, I would predict a quick race to the bottom with competitors entering the field.

    Here's an alternative, however. Particularly previewmojo seems well suited to be featured on the many integration / app market places many SaaS companies have nowadays. You're already working on a wordpress plugin, but you could expand this to any number of publishing platforms, ecommerce platforms and perhaps hosting platforms and others. This may be a cheap way to create a lot of surface area in terms of customer acquisition. But, I would assume that would only work if you embrace a lower price point (e.g. $10/month). The lower price point would be justified due to the low complexity of the product and the ease of acquiring customers (assuming this strategy works).

    1. 3

      I appreciate anyone who takes the time to write such a detailed response. But I did mention that I already acknowledge I might not be delivering that amount of value and therefore need to add features etc.

      Your comparison to adobe and intercom is strange though. Those are completely different products. In the article I mentioned competitor based pricing as a bad idea, but I certainly don’t recommend basing your pricing on companies you have zero relation to.

      1. 1

        I wasn't viewing it through a lens of what you call competitor based pricing.

        I was viewing it through a lens of "If I'm head of growth and I've got $100 to spend to increase traffic, what's the best ROI?"

        Or, "If I'm project manager with $100 remaining budget and my designer is asking for an Adobe license and my marketer is asking for a previewmojo subscription -- what adds the most value?"

        The same argument can be made for $50/month.

        As a PM I've been in the position where I needed to make purchase decisions where we needed a chat API and I was comparing chat api competitor prices. But I've also been in a position where we wanted to make the most of our budget, in which case I'd be comparing a variety of products and services. It's the latter scenario that I'm invoking here.

        Perhaps adding more features and adding more value is the best path forward. It's definitely something I would consider as well. But I wouldn't be so quick to dismiss the lower price point if it means I can keep the product complexity down (and hence maintainable) and if I can rely on integrations to organically drive user acquisition (granted, a lot of ifs).

  4. 3

    It does makes sense to charge more as indie, since we don't have funding.

    I have to think about pricing for my product too. I was considering a lifetime offer for early beta users - like $200 one off. That can fund you for a while, and those early users support you, and understand it's not the finished article.

    @alexanderisora did this well on unicornplatform.com imo, so maybe that's another approach to try. Although every product and audience is different, so you never really know - your approach could well work and be another example for people like me

    1. 2

      It does makes sense to charge more as indie, since we don't have funding.

      But charging too much may result in zero sales :)
      Thus, to earn more, you need to find a perfect balance. Not just charge more.

      You can find more helpful info in this brilliant article: https://www.sequoiacap.com/article/pricing-your-product/

      I was considering a lifetime offer for early beta users
      so maybe that's another approach to try

      It worked for me. My LTD crowdfunding round allowed me to ship the product. But the game starts after you ship the product. You need to build a sustainable business. If you fail, you will sooner or later burn all your cash and die.

      1. 2

        Thanks for the article link Alex! The video in there gave me a good idea, as I know the landscape for my product very well having been a customer myself of pretty much every tool. With that, I think I can base my own pricing so it's more of an educated alternative, that can be attractive in the field..and less of a big guess. Time will tell, but this was very helpful!

    2. 1

      Not a fan of one-off lifetime memberships. You keep innovating but aren't paid for it.

  5. 2

    Totally agree!
    The difficulty is not in the price!!! perse.
    It is in:
    ....showing the VALUE
    .... to the right audience
    .... by reaching them
    .... building trust

    it is especially hard when we are starting out.

  6. 2

    This is an excellent approach. You're providing value, so charge for it. If you can't, then re-evaluate if your product solves something (and if it solves it in a market worth pursuing). Congrats!

  7. 1

    The less you charge, the more market share you get. Mailchimp starts for free and they're gonna make $700M this year

  8. 1

    All I can say is that I like the sound of this!
    Such bold moves are inspirational... I hope it works out. Do keep us posted; maybe some of us will end up following your example :)

    EDIT: I borrowed and edited your idea by dropping my lowest price tier. Whereas the maths definitely indicates that charging more is better overall, both for the consumer and the producer, I would advise against charging x-times more for the sake of it. Opportunity cost is a factor that should never be ignored, especially if other players in your immediate industry are more dominant or visible. It's worse if your competitors are enjoying economies of scale and pricing accordingly at a level which a new entrant cannot survive at.

  9. 1

    "Nothing against indie hackers (I am one after all!) but we shouldn't be pricing our products for the indie market, IMO. It's unsustainable." - Love it.
    Hey, what do you suggest for something that is inherently free? More features for a paid version? What if it does not make much sense to have a paid version?

  10. 1

    It's an odd human complex to undervalue yourself or feel apprehensive to charge more. Keep us updated on how customers react to new price point!

  11. 1

    I agree. You need a sustainable pricepoint, where your margins support a significant level of marketing and product investment.

  12. 2

    This comment was deleted a year ago.

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