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Comment by anonred | Hacker News Reader

The goodwill of your testers is likely worth far more than the marginal revenue you’d gain from having them pay full price.

I was in a similar position many years back and learned the hard way that people _absolutely loathe_ when you take things away from them.

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I ran into this as well. I had an attempted launch a month ago with a different pricing model, and people were pissed. They loved the product so much that they were angry at the prospect of having to choose to not use it (because they didn't like the price). I've since adjusted the model to fit all of the feedback that I gathered from that experience, and I've sampled the users to get their feedback on the new pricing model, and it seems positive, so hopefully there aren't complaints this time around.

Many of the testers do have free service (from referrals) that they'll get. But after that, they have to pay. I'm feeling pretty strict about it this time around.

Yeah I can't fathom why you are doing this.

If the marginal cost is zero (i.e. this is software) they are worth more to you than any kind of incremental fee (i.e. assuming a few dollars a month, not thousands).

It's just one of the most fundamental rules of business that increasing prices is one of the most disastrous things you can do where there are expectations.

It's why there are granfather contracts all over the place.

Make your new customers delighted with your product at 'some price' and your 'alpha/beta' people feel empowered that they get it for free. You can sell them addons later.

The marginal cost isn't zero unfortunately. Each user is actually expensive, and their cost is unbounded (I send hundreds to thousands of SMS messages per user, per month, on their behalf). They've only gotten more expensive as they've used the service, because they're sending more messages to more people. There's theoretically no limit to how much they could cost me. So I just can't do the grandfather idea.

I'm not willing to spend the effort to build a custom billing system and pricing model just to grandfather these users in.

How much does 1000 SMS messages cost? If it's actually significant I would grandfather them in at a lower rate per X number of messages and offer further discounts for referrals.

Most services I've seen in Europe are around €0.09 so "thousands" would mean upwards of €100. I've seen US providers go as low as $0.005 though.

I think the mistake is to have unlimited messages if messages are such a major cost factor. Most services with "unlimited X" have a soft and hard limit on X if you dig deeper. If you don't want to charge per usage (or for overages), you should do a mixed calculation based on typical and min/max usage per customer and how usage ebbs and flows over time.

For the grandfather plan I'd aim lower than that even if it means losing a little money on high use customers because their usage might decline in the future (at which point they're providing profit while being less likely to cancel because of FOMO) and because the lower price point and legacy will make them good multipliers, not just for direct referrals but also as references or partners for whitepapers.

Basically you can get more out of them than just money so treating them the same as later customers means missing out on that.

"How to build SaaS that doesn't punish the user for using it"

Can you be more clear what you mean by this? Are you saying I'm punishing my users for requiring that they pay for the service?

Not clear what you are arguing. Early supporters should get a price something like cost+3%, new customers might get cost+30% or more.

I wasn’t, and don’t think other’s were advocating losing money on the originals.

Making them angry when they were on your side and helped you off the ground is a silly policy. The negative word of mouth factor alone could be incalculable and do unbounded harm, all for ~$100 bucks a month?

Treat them right and word of mouth will make much more than that in the long run.

Oh, in the case where there are material underlying costs, it should be a lot easier to charge. People 'get' that. You can given them a discount and that's that.

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