[adameasterling]

Perspective from a CTO at a small b2b saas startup:

Pricing is incredibly tough, and at my startup, we’ve had tons of hours-long conversations on pricing internally, with consultants, etc.

We also have a mix of customers, both very large companies with thousands of employees and very small ones as well. My answer is a little complicated because we have two products right now, with very different approaches to pricing.

For our first product, it worked really well to charge by the number of physical locations at the business. (We tried usage-based pricing, but it was too confusing for what that product was; and also incentivized less engagement.) The price per location is fairly high, but we do tend to discount down for larger deals.

For our second product, pricing has been very tough. For very large customers, we’ve carved out special deals, where they get billed a flat monthly negotiated amount for unlimited service. These have been a little annoying to set up, but pretty profitable for us. For all other customers, we charge by usage.

Also, I see some people saying bringing on an enterprise client is a way to kill your startup. I’m skeptical of this. Large businesses, in my experience, are very pleasant to work with, have a lot of money to spend, and, yes, are demanding, but in ways that make your product better, not worse. It’s true that you’re going to have more fire drills for your engineering staff (last-minute demands to add an important feature), but this isn’t a bad thing. Security questionnaires are probably the most annoying thing to deal with, but it’s solvable (talk to Vanta).

Feel free to hit me on Discord or send me an email; happy to say more.