I've been studying collaborative tools (mainly productivity tools) pricing and business models. The great majority of them are per user/member, which I think can be a barrier for scaling to the buyer.
Before the buyer even uses the product and get value from it, she/he is confronted with its cost and onboarding a new user will always bring the thought "shall we/we have to buy another seat" and will necessarily entail an increase in cost.
Some interesting models I'm considering are:
- no or little limit on the number of seats but pricing by folder/project/workspace. This way, the buyer is encouraged to get people on the tool and he/she will upgrade only when necessary ie. once they get value from the tool and they need more organization and private spaces for different teams.
- a high limit on the number of elements used. I see this model mostly in whiteboarding tools where you can have fun filling out your whiteboard with thousands of elements for free, and then, for the 3001th element, you have to upgrade.
What about you? What's your opinion on these strategies? Did you come across a compelling pricing model that would encourage the buyer to upgrade while allowing him to get plenty of value beforehand?
I like the second model better although of course it depends from product to product.
This is a topic I keep brainstomring about as well as I look for a pricing model for my own product - Pluto.
I think some products could do with a fixed cost model as well - like Basecamp.
Puneet
There's an air of mystery about Puneet 😮. They haven't filled their profile yet.
Oh, and to answer your last question - the one product that I absolutely love is Figma. It's not only a great product but their pricing ensured that even the top most designers moved from Adobe XD to their product as their daily driver.
Unfortunately, they're implementing a new pricing policy this month which adds some really bad restrictions.
Puneet
There's an air of mystery about Puneet 😮. They haven't filled their profile yet.
Thanks Puneet for sharing your thoughts. Indeed, applying the second model to Pluto seems a bit tricky unless you apply restrictions on the time spent in video calls. But as a user, I think that would prevent me from using the app from the beginning as I'd prefer to know that I'm paying a fixed price and not have the surprise that I don't have access in the middle of an important conversation.
As for the Basecamp model, it's very close to the first model I mentioned with no restrictions on the number of seats/users. However, it's clearly not meant for small teams (around 10) as the cost would be definitely too high compared to the market.
I think I'm going for a mixed model:
- 1 plan for small teams with a restriction to 10 users and document storage restrictions.
- 1 plan for unlimited users with document storage restrictions as well.
Pluto's website looks great by the way. I love the design!
sophia
Remote Work Experience
I have been working fully remotely for the past 4 years, working partly from home, and partly from co-working spaces and cafés. I love the freedom as well as the responsibilities that remote work brings me. The first reason that made me go remote was that I couldn't stand commuting to work 2 hours per day in crowded underground transportation. These were actually two hours of my day that I felt were stolen from me and that I could use to achieve my professional or personal goals. The second...
hey, thank you so much!
I like your idea of a mixed model. Definitely makes sense.
Puneet
There's an air of mystery about Puneet 😮. They haven't filled their profile yet.
I also believe it depends on the product. However, I find the first strategy preferable for large or medium-sized companies as they are able to use the workspaces/folders without having to upgrade. This pricing model would be better suited for notetaking tools such as Notion, Evernote, Coda, etc.
Ermira Krasniqi
Remote Work Experience
Digital nomad for 2 years now. I am a freelance illustrator.