abelr's comments

abelr | 5 years ago | on: Launch HN: Corrily (YC W21) – Price Optimization for SaaS

The minimum would be 100 conversions per month below which we cannot perform experimentation. Obviously better works better, and 500 would be better. But even without experiments, we have default curves which you can use. Regarding A/B test, you do not need to A/B test in the same country, you can always perform experiments across countries and get 100% of the traffic of a country to the same experiment.

abelr | 5 years ago | on: Launch HN: Corrily (YC W21) – Price Optimization for SaaS

Regarding your last point on feeling cheated, there are two aspects to it. Right now if you check the price of Slack with an indian IP, you will see $2.67 for the lower tier (6.67 for the US), Netflix will give wildly different prices per country [1], and Survey monkey gives me the same USD price in Euros. People expect to pay different prices in different countries.

The other aspect is to prevent a user from receiving different prices. To prevent that we do a few things. We remember the prices that were displayed to a user and can make sure an entire country gets the same prices during an experiment.

[1] https://www.comparitech.com/blog/vpn-privacy/countries-netfl...

abelr | 5 years ago | on: Launch HN: Corrily (YC W21) – Price Optimization for SaaS

So I am super interested in your comment and I think you will be a bit surprised by my response. I am not a strong believer in capitalism. On the contrary. Neither is Andrej. We both grew up in leftist families and I must have been the only portfolio manager that reads Das Kapital at night. We actually came at the problem from a very very different direction. We thought pricing everything from a US perspective was problematic. The price levels in India are about a 10th of the US. So we thought "Ok but that doesn't even make sense for a SaaS to price the same way everywhere. Because they lose out on poorer markets". We built Corrily with the thought that more personalized pricing based on an individual's willingness to pay also reflected an individual's capacity to pay.

We think it's pretty cool to align a business incentive (reach more markets) with an economic one (poorer nations and richer nations paying different amounts).

I actually wonder a lot what other people think about this because I think it is an important point. Is it fairer to price differently according to willingness to pay given not everyone has the same purchasing power, or to give the same price to everyone?

abelr | 5 years ago | on: Launch HN: Corrily (YC W21) – Price Optimization for SaaS

Absolutely! I remember reading this paper [0] about personalized pricing. The fact that personal data (an IP) is being used to inform prices has to be disclosed in the GDPR disclosure of a website. A very simple way to avoid a lot of those issues however is to have time-limited experiments in which 100% of Country's flow is directed towards one experiment (in the case of Corrily we keep track of which user saw what price when to insure the user will always see the same price).

[0] https://www.econstor.eu/bitstream/10419/205221/1/de-Streel-J...

abelr | 5 years ago | on: Launch HN: Corrily (YC W21) – Price Optimization for SaaS

We currently handle VAT for services (in this case we pass the correct VAT to send to Stripe via their tax rate API [1]). We have not yet expanded it to physical goods as they are a bit trickier to manage from a tax perspective. However you make a really good point on exploring this. I'd be curious to hear more about your experience actually, what were the biggest pain points you faced when growing internationally?

[1] https://stripe.com/docs/api/tax_rates

abelr | 5 years ago | on: Launch HN: Corrily (YC W21) – Price Optimization for SaaS

I'd be curious to get examples of actual successful lawsuits resulting from A/B testing! Regarding the legality of it, in the US it is illegal to perform price discrimination when the intent is to directly harm your competition ([1], [2], [3]). However, first, Robinson-Patman does not apply to services [4], and secondly this is trying to avoid predatory pricing, and the supreme court ruled that price differentials are prohibited when the price differential "may be substantially to lessen competition". Similarly in the EU, Article 102 c) of the Treaty on the Functioning of the European Union prohibits price discrimination for companies in dominant position. It has however been significantly relaxed in United Brands v. Commission [5], where the court recognized that a dominant firm may charge different prices to reflect the competitive market.

In short, price A/B testing is legal and common practice for most companies, and VWO's article seems a bit too quick to jump to declaring it illegal.

[1] https://en.wikipedia.org/wiki/Sherman_Antitrust_Act_of_1890

[2] https://www.law.cornell.edu/wex/Clayton_Antitrust_Act

[3] https://en.wikipedia.org/wiki/Robinson%E2%80%93Patman_Act

[4] https://www.ftc.gov/tips-advice/competition-guidance/guide-a...

[5] https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A...

abelr | 5 years ago | on: Launch HN: Corrily (YC W21) – Price Optimization for SaaS

The usage really differs depending on the size of the company. For larger companies, they tend to have entire pricing teams and the pricing is never "Done". In this case we are adopting a subscription-based model and are trying to optimize prices in a very granular fashion (per country, tradeoffs between usage-based and subscription based fees etc.). Those customers tend to need experiments for the rest of their company's life.

Then there are smaller companies. Think Seed or Series A companies that focus on getting prices in the right ballpark. For them, we provide a lot of value at first by finding the right price (and country adjustments) at first, and then provide a bit less value when they found prices that seem to work well. We adapted our pricing to reflect it with a low-ish subscription fee to maintain our infrastructure and show localized pricing to their users, and an experiment-linked usage based fee. We're happy with this system as it aligns well with the value we are providing.

Later we will add dynamic promotions (think personalized time-limited promotions based on the user's usage of the app, or country holidays promotions) to increase conversions and help companies be local at scale, which should help us generate ongoing value, even to smaller companies.

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