John Jago

A fair B2B SaaS pricing model

There’s a kind of free tier that I appreciate when products have. It’s when the free tier has a quota, that if you stay below, you don’t pay anything. Even better, it’s when that quota is related to how likely you are to be making money yourself when exceeding that limit.

For example, Buttondown is a newsletter software, and you don’t pay if you have less than 100 subscribers. This is perfect because it gives people who are just starting out the freedom to experiment for a while, without worrying about going broke. On the other hand, those with thousands of subscribers, most likely making money off it, pay their fair share.

For not an example, in you currently have to pay to get started, no matter how little you write or how small of an audience you have. This isn’t the worst, because you are paying the tool, and if that tool keeps improving, even paying a subscription makes sense. But there’s some hesitation if every tool asks to pay like this. It’s hard to experiment when you don’t have a lot of money.

Products that make money when the people using them make money, and that don’t ask for money if the people using them don’t make any, have a fair pricing model that allows breathing space to figure out to how succeed using that product.

Of course, not every product has a natural quota to measure. It’s something I’m going to deliberate carefully when pricing my own products.