Ask HN: Tiered pricing vs Pay-As-You-Go. What works when?
1) PAYG: you get an invoice monthly which lists what you've used, and you pay it. Can also do pre-pay (Tarsnap, AWS) 2) Tiered pricing: you pick a tier, and pay a fixed amount every month that gives you a usage limit. (Github) 3) Tiered-As-You-Go: a bit of a blend of the two, it's like PAYG but the usage billable 'units' are fairly chunky, so you get a mostly consistent bill but with the flexibility to use more on-demand.
I've read a fair bit about why pricing tiers make a lot of sense from the business side. There's lots of stuff around psychology and maximizing profit out of each customer and that all seems to make sense. However, I can't get away from the fact that as a consumer, I hate tiered pricing. I usually end up feeling that I'm being ripped off, unless I use everything that my current tier offers. The tiers hardly ever fit my needs, and it's generally not a nice feeling. And once I do get to the limit of my tier, the next small thing that I need equates to a big jump in cost, because suddenly I need to be a super-platinum customer, even though I don't need most of what that offers.
So my question is this: If you were building a startup now, what factors would influence your pricing model? Is there anything that would make you rule out PAYG or pricing tiers completely?