Did/do you offer annual plans too? In my business, we're put off paying small amounts per month for things because of the bookkeeping work (we have someone who manages our books but we still have to find and create a PDF of every receipt every single month which is boring) so for longer term things we tend to find options with annual plans. It also means we're "locked in" for longer which is good for the seller.
As a consumer, $10/mo is great. As a business, $10/mo is as much headache as $100/mo.
Yes, we do have a yearly plan — and it was a real surprise to see how often people choose it. After so many refused to pay $10 monthly, I assumed the annual plan would barely get any traction. But it turns out that’s not the case at all. That’s a really good point you highlighted!
Especially at larger companies there’s very little difference between $10, $100, $1000, $10,000 from the perspective of the effort put in to pay for it.
You’re putting the same requests and forms, doing the same due diligence, getting the same approvals, etc. All contracts need to go through the same contract review, etc.
Few places I’ve worked have sensible rules to bypass that.
You still need to make sure you’re value for money, but aren’t as constrained as absolute price as much.
Yes, I see what you mean. In our main product, where billing is per seat and we work with somewhat small-med biz, the subscription form after the trial asks how many seats you want to pay for. It’s possible to choose more seats than the number of users at that moment, which means those seats can be filled later without extra charges/invoices.
From time to time, we see cases where a single user signs up but purchases 20–50 seats for a year upfront. That’s still always surprising me in a good sense.
The whole topic of seats could actually be a separate discussion on its own, 'cause there are many nuances, good/bad approached and funny situations we’ve run into along the way ))
In my company it is easier to request a purchase of a new hardware for 5000$ than a 10$ software plug-in or extra license. Easier for end-user at least.
100%. What’s also interesting is that this pattern holds true in many other aspects. I often review our support tickets to see what customers are writing. And often, the bigger the client, the more polite and reasonable they are. Of course, there are exceptions.
For example during down time. AWS might goes down and we’re rushing to fix things. The first ones to complain are usually the smallest customers. They tend to write everywhere, often in a rude tone, sometimes exaggerating “we couldn’t track time for half a day”, while it is only 10 mins. Bigger clients usually more polite, thank us for responding quickly, and sometimes even offer to buy us some coffee 'cause they say we’re under pressure )
Ha, of course, it could have turned out differently. As of today, most paying customers are those who registered after we removed "free" plan, not long-time users. My reflection is that no matter how much I tried to rationalize it, I was convinced that for people who had been happily using the product for years, paying $10/mo wouldn’t be a problem. And I honestly don’t know if it would have made any difference if the price were $5 or $4 — or if it’s just a kind of protest. Interestingly, we also have an annual plan for $100, and it’s chosen fairly often — again, mostly by new users coming straight from the trial.
I have had the same experience. Realistically speaking, the vast majority of people don’t want to pay for anything. And so if you can avoid giving the impression that your product’s value is not worth paying for, do so. In many situations, it’s preferable to have 1,000 paying users than 50,000 free ones.
And there’s another interesting argument I hear from time to time: people tell me they use Google for free, or for much less, and it gives them way more.
Maybe the big companies are partly to blame for shaping the kind of mindset users have today?
Absolutely. If I remember correctly, until Google came in and started giving everything away for free, there was literally nothing available for free. Even email was capped to 2 MB with everything beyond as chargeable.
Originally, Google have away their workspace suite for free, which now people have to pay for.
The free tier everywhere has now become the ad-riddled tier.
> Today the project have 500 paying customers, and we’re happy to support them.
1 in 60 seems like a pretty good conversion rate to me from other stories I've heard. And who knows if you actually would have reached 500 paying users if you'd charged from the beginning. After all, your free round produced targeted advertising to an audience of 30,000.
You mean 2% conversion from free to paid, or from trial to free? In our main project, we usually see around 4–5% conversion from trial to paid. But here it’s different, people have been using the product for a long time, everything works well for them, and the price doesn’t seem high at all.
Food for thought: Perhaps it wasnt't the money as much as Stripe itself being the barrier? Maybe you would have gotten better turnout with other payment options (especially for a platform like Trello, crypto like BTC/XMR might be more welcome than you'd expect).
> My biggest lesson? Charge early.
Can't argue with that. And even if you go free early, advertise it as "free trial during our early days" or similar. If you already plan on charging in the future, get people used to the idea of having to pay for it from day one even if you give it away for some potentially extended time. Proper free-tiers with expectations and terms can come later down the line when the pricing strategy is clearer.
People emotionally respond very differently to their free trial expiring ("it was nice while it lasted") vs having their previously free service being replaced with a paid one ("f this enshittified rugpull"). The difference is proactive communication and setting of expectations.
Stripe has payment via crypto methods. Pricing a recurring payment in crypto feels off putting to me as it’s likely the cost will change often due to crypto volatility.
By the way, we’ve only had a single chargeback so far — which was surprising in itself. And our churn rate is around 6.5%, which is actually pretty solid for a product like this and for this kind of audience.
Did/do you offer annual plans too? In my business, we're put off paying small amounts per month for things because of the bookkeeping work (we have someone who manages our books but we still have to find and create a PDF of every receipt every single month which is boring) so for longer term things we tend to find options with annual plans. It also means we're "locked in" for longer which is good for the seller.
As a consumer, $10/mo is great. As a business, $10/mo is as much headache as $100/mo.
Yes, we do have a yearly plan — and it was a real surprise to see how often people choose it. After so many refused to pay $10 monthly, I assumed the annual plan would barely get any traction. But it turns out that’s not the case at all. That’s a really good point you highlighted!
Especially at larger companies there’s very little difference between $10, $100, $1000, $10,000 from the perspective of the effort put in to pay for it.
You’re putting the same requests and forms, doing the same due diligence, getting the same approvals, etc. All contracts need to go through the same contract review, etc.
Few places I’ve worked have sensible rules to bypass that.
You still need to make sure you’re value for money, but aren’t as constrained as absolute price as much.
Yes, I see what you mean. In our main product, where billing is per seat and we work with somewhat small-med biz, the subscription form after the trial asks how many seats you want to pay for. It’s possible to choose more seats than the number of users at that moment, which means those seats can be filled later without extra charges/invoices.
From time to time, we see cases where a single user signs up but purchases 20–50 seats for a year upfront. That’s still always surprising me in a good sense.
The whole topic of seats could actually be a separate discussion on its own, 'cause there are many nuances, good/bad approached and funny situations we’ve run into along the way ))
In my company it is easier to request a purchase of a new hardware for 5000$ than a 10$ software plug-in or extra license. Easier for end-user at least.
100%. What’s also interesting is that this pattern holds true in many other aspects. I often review our support tickets to see what customers are writing. And often, the bigger the client, the more polite and reasonable they are. Of course, there are exceptions.
For example during down time. AWS might goes down and we’re rushing to fix things. The first ones to complain are usually the smallest customers. They tend to write everywhere, often in a rude tone, sometimes exaggerating “we couldn’t track time for half a day”, while it is only 10 mins. Bigger clients usually more polite, thank us for responding quickly, and sometimes even offer to buy us some coffee 'cause they say we’re under pressure )
Did you mean to post this on LinkedIn?
To be honest I did - https://www.linkedin.com/posts/mikekulakov_two-years-ago-we-...
> My biggest lesson? Charge early.
How do you know that you wouldn't end up with even fewer paying customers if you'd taken that path?
Ha, of course, it could have turned out differently. As of today, most paying customers are those who registered after we removed "free" plan, not long-time users. My reflection is that no matter how much I tried to rationalize it, I was convinced that for people who had been happily using the product for years, paying $10/mo wouldn’t be a problem. And I honestly don’t know if it would have made any difference if the price were $5 or $4 — or if it’s just a kind of protest. Interestingly, we also have an annual plan for $100, and it’s chosen fairly often — again, mostly by new users coming straight from the trial.
I have had the same experience. Realistically speaking, the vast majority of people don’t want to pay for anything. And so if you can avoid giving the impression that your product’s value is not worth paying for, do so. In many situations, it’s preferable to have 1,000 paying users than 50,000 free ones.
And there’s another interesting argument I hear from time to time: people tell me they use Google for free, or for much less, and it gives them way more.
Maybe the big companies are partly to blame for shaping the kind of mindset users have today?
Absolutely. If I remember correctly, until Google came in and started giving everything away for free, there was literally nothing available for free. Even email was capped to 2 MB with everything beyond as chargeable.
Originally, Google have away their workspace suite for free, which now people have to pay for.
The free tier everywhere has now become the ad-riddled tier.
(I'm ignoring how blatantly AI-written the OP is and assuming good faith that the text accurately represents the actual situation.)
> Here’s the thing: for us, it’s hard to stay motivated supporting free users—especially if you’re bootstrapped.
> Paying customers energize you. Free users don’t.
> Today the project have 500 paying customers, and we’re happy to support them.
1 in 60 seems like a pretty good conversion rate to me from other stories I've heard. And who knows if you actually would have reached 500 paying users if you'd charged from the beginning. After all, your free round produced targeted advertising to an audience of 30,000.
You mean 2% conversion from free to paid, or from trial to free? In our main project, we usually see around 4–5% conversion from trial to paid. But here it’s different, people have been using the product for a long time, everything works well for them, and the price doesn’t seem high at all.
Historically, apps have a 2-4% conversion rate from freeware/shareware to paid. That's pretty much on the mark.
I guess I just wanted too much ))
Food for thought: Perhaps it wasnt't the money as much as Stripe itself being the barrier? Maybe you would have gotten better turnout with other payment options (especially for a platform like Trello, crypto like BTC/XMR might be more welcome than you'd expect).
> My biggest lesson? Charge early.
Can't argue with that. And even if you go free early, advertise it as "free trial during our early days" or similar. If you already plan on charging in the future, get people used to the idea of having to pay for it from day one even if you give it away for some potentially extended time. Proper free-tiers with expectations and terms can come later down the line when the pricing strategy is clearer.
People emotionally respond very differently to their free trial expiring ("it was nice while it lasted") vs having their previously free service being replaced with a paid one ("f this enshittified rugpull"). The difference is proactive communication and setting of expectations.
Stripe has payment via crypto methods. Pricing a recurring payment in crypto feels off putting to me as it’s likely the cost will change often due to crypto volatility.
By the way, we’ve only had a single chargeback so far — which was surprising in itself. And our churn rate is around 6.5%, which is actually pretty solid for a product like this and for this kind of audience.