Same annual revenue either way on paper. I am one person, I write the code and answer every support email, and I have maybe 25 hours a week for this after my job. The product works for both a hobbyist audience and a small business audience with fairly minor changes. Which side of that do people regret picking?
Agreeing with the conclusion for a different reason. At 19 a month you cannot afford to spend an hour on anyone, so you have to build self serve onboarding, docs, billing edge cases, the lot, before you know whether the thing is right. At 200 you can hand hold your first ten customers personally and learn what the product should be. Higher prices buy you the right to do things that do not scale.
Practical note on the same revenue on paper claim, it is not the same. Two hundred subscriptions means payment failures, refunds, chargebacks, and tax across a lot of jurisdictions, all of which lands on you at eleven at night. Twenty invoices is an evening a month of admin.
Failed card retries alone are a part time job at consumer volume. It is genuinely a hidden tax on cheap subscriptions.
Had not thought about the admin at all, which is probably a sign I would have found out the hard way.
Mild dissent, or at least a caveat. If your distribution is already consumer, an existing audience or a community you are part of, then 200 hobbyists may be reachable next month while twenty businesses might take a year of cold outreach you have no time for. The best price is partly a function of the door you can already open.
Fair, and worth weighing. Though I would still start high and discount rather than start low and try to raise later, which is miserable.
@inbox_zero_ivo · last mo. · 3 replies
Twenty customers at 200, and it is not close given your 25 hours.
Support load does not scale with revenue, it scales with the number of humans holding your product. Two hundred hobbyists will generate more tickets than twenty businesses, and the tickets will be harder to answer because the users are less expert and the stakes are lower for them. Twenty business customers you can know by name, call, and learn from.
The other thing nobody mentions is churn. Consumer subscriptions at 19 churn constantly, so you have to keep refilling the bucket, which means marketing forever. Business customers at 200 stick around because switching costs them a workflow, so month 14 revenue is mostly the same people from month 2.
The honest downside is that getting the first twenty is much slower and involves sales conversations, which most technical founders hate.
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@eleven_tabs · last mo.
It is also why the middle is the worst place to be. Priced too low to justify sales, too high for impulse buying.
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@corwin_ashby · last mo.
Support scaling with humans not with revenue is the sentence that decided it for me. I had that backwards.
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