Wednesday, February 13, 2013

How do you know how to charge for your product?

A few things I wish somebody had told me years ago:

As a startup, if you want to survive, you have to pick a model. Everybody starts off by thinking they are low on the complexity scale ("our product is simple!") so they believe self-service is an efficient model for them. But complexity, in this discussion, has nothing to do with simplicity in the user experience (elusive in its own right) but the complexity of your user acquisition and total cost of service.
Are $13 accounts for server monitoring likely to be experienced sysadmins doing meaningful work for businesses who will solve their own problems and pay without complaint every month? No, they're going to be the worst possible pathological customers.