The SaaS Pricing Fundamentals I Used To Become a Millionaire

in this video you're going to learn in this video you're going to learn about the fundamentals of sas pricing about the fundamentals of sas pricing about the fundamentals of sas pricing video replays a talk that i gave back in video replays a talk that i gave back in video replays a talk that i gave back in 2021 at microcomp europe in croatia and 2021 at microcomp europe in croatia and 2021 at microcomp europe in croatia and i dig into how to think about sas i dig into how to think about sas i dig into how to think about sas pricing why you should be constantly pricing why you should be constantly pricing why you should be constantly looking to raise your pricing how to do looking to raise your pricing how to do looking to raise your pricing how to do that as well as some other mental that as well as some other mental that as well as some other mental frameworks around subscription pricing frameworks around subscription pricing frameworks around subscription pricing talk about net negative churn all kinds talk about net negative churn all kinds talk about net negative churn all kinds of things it's it's 45 minutes including of things it's it's 45 minutes including of things it's it's 45 minutes including q a and it codifies a lot of my thinking q a and it codifies a lot of my thinking q a and it codifies a lot of my thinking around sas pricing is something that i around sas pricing is something that i around sas pricing is something that i had been meaning to put together into a had been meaning to put together into a had been meaning to put together into a single place like a talk for a couple single place like a talk for a couple single place like a talk for a couple years and microcomp europe gave me that years and microcomp europe gave me that years and microcomp europe gave me that opportunity speaking of microconf europe opportunity speaking of microconf europe opportunity speaking of microconf europe tickets for our 2022 event are now on tickets for our 2022 event are now on tickets for our 2022 event are now on sale microcomp europe is in malta this sale microcomp europe is in malta this sale microcomp europe is in malta this year year year and there are some tickets remaining and there are some tickets remaining and there are some tickets remaining although they are going quick and it is although they are going quick and it is although they are going quick and it is a reduced capacity event i'm looking a reduced capacity event i'm looking a reduced capacity event i'm looking forward to getting back in a room with forward to getting back in a room with forward to getting back in a room with so many bootstrapped and mostly so many bootstrapped and mostly so many bootstrapped and mostly bootstrapped ambitious sas founders i bootstrapped ambitious sas founders i bootstrapped ambitious sas founders i hope you're able to join us you can head hope you're able to join us you can head hope you're able to join us you can head to microconf.com to microconf.com to microconf.com europe if you're interested in picking europe if you're interested in picking europe if you're interested in picking up a ticket and finding out more about up a ticket and finding out more about up a ticket and finding out more about our speakers and with that let's dive our speakers and with that let's dive our speakers and with that let's dive into this talk on the fundamentals of into this talk on the fundamentals of into this talk on the fundamentals of sas pricing i sas pricing i sas pricing i actually debated about what to talk actually debated about what to talk actually debated about what to talk about here and what i realized is the about here and what i realized is the about here and what i realized is the thing that i've been thinking about the thing that i've been thinking about the thing that i've been thinking about the most most most over the past thinking about and over the past thinking about and over the past thinking about and advising the most there's been a bunch advising the most there's been a bunch advising the most there's been a bunch of topics of topics of topics and i wrote them all down while i was on and i wrote them all down while i was on and i wrote them all down while i was on the first plane to portland like four the first plane to portland like four the first plane to portland like four weeks ago and i had this big list of weeks ago and i had this big list of weeks ago and i had this big list of things and it's like that was like a things and it's like that was like a things and it's like that was like a three-hour talk right it was just all

three-hour talk right it was just all three-hour talk right it was just all these topics what i realized is they all these topics what i realized is they all these topics what i realized is they all rotated tangentially at least around rotated tangentially at least around rotated tangentially at least around pricing and so that's what today's talks pricing and so that's what today's talks pricing and so that's what today's talks about so i'm calling it a brief primer on pricing on sas pricing itself so i on pricing on sas pricing itself so i say it's brief because how much can you say it's brief because how much can you say it's brief because how much can you cover in in 35 or 40 minutes right i i cover in in 35 or 40 minutes right i i cover in in 35 or 40 minutes right i i there's a couple bullets that i'll run there's a couple bullets that i'll run there's a couple bullets that i'll run through through through it is obviously not an exhaustive list it is obviously not an exhaustive list it is obviously not an exhaustive list but but but i feel like this is almost i almost i feel like this is almost i almost i feel like this is almost i almost called this a founder's guide to sas called this a founder's guide to sas called this a founder's guide to sas pricing because you don't have to have a pricing because you don't have to have a pricing because you don't have to have a phd in pricing you don't um phd in pricing you don't um phd in pricing you don't um need to necessarily understand need to necessarily understand need to necessarily understand everything to the infinite depths of all everything to the infinite depths of all everything to the infinite depths of all the equations it's the equations it's the equations it's what i've learned as a founder and now what i've learned as a founder and now what i've learned as a founder and now an advisor in very i would say practical an advisor in very i would say practical an advisor in very i would say practical terms so any talk i give i try to keep terms so any talk i give i try to keep terms so any talk i give i try to keep it there's obviously some theory it there's obviously some theory it there's obviously some theory involved but there's a lot of just involved but there's a lot of just involved but there's a lot of just practice and patterns and practicality practice and patterns and practicality practice and patterns and practicality that i want to drop today that i want to drop today that i want to drop today the the the talk title that i gave xander was razer talk title that i gave xander was razer talk title that i gave xander was razer prices and other obvious startup advice prices and other obvious startup advice prices and other obvious startup advice we of course could not have a microcomp we of course could not have a microcomp we of course could not have a microcomp without someone not saying you know without someone not saying you know without someone not saying you know someone's saying raise your prices he someone's saying raise your prices he someone's saying raise your prices he asked me in slack when i sent this to asked me in slack when i sent this to asked me in slack when i sent this to him he said are you sure i'll go with him he said are you sure i'll go with him he said are you sure i'll go with that but i feel like you're punking me that but i feel like you're punking me that but i feel like you're punking me that that's the title so either of those that that's the title so either of those that that's the title so either of those work um what we're going to be covering work um what we're going to be covering work um what we're going to be covering today today today in four i can't remember if i have three in four i can't remember if i have three in four i can't remember if i have three or four sections to be honest we're or four sections to be honest we're or four sections to be honest we're going to talk about expansion revenue going to talk about expansion revenue going to talk about expansion revenue really about pricing structure tiers really about pricing structure tiers really about pricing structure tiers some thoughts on that and how to build some thoughts on that and how to build some thoughts on that and how to build in expansion revenue we're going to be in expansion revenue we're going to be in expansion revenue we're going to be talking about talking about talking about rpc not ltv

rpc not ltv rpc not ltv you often hear our poo average revenue you often hear our poo average revenue you often hear our poo average revenue per user per user per user but but but it's always bothered me because as it's always bothered me because as it's always bothered me because as pierre said this morning users are not pierre said this morning users are not pierre said this morning users are not customers you can have a thousand users customers you can have a thousand users customers you can have a thousand users not paying you anything so i've always not paying you anything so i've always not paying you anything so i've always said arpc average revenue per customer said arpc average revenue per customer said arpc average revenue per customer it's the same thing but rpc not ltv i'm it's the same thing but rpc not ltv i'm it's the same thing but rpc not ltv i'm going to talk about why rpc is so going to talk about why rpc is so going to talk about why rpc is so important important important the impact of raising your prices of the impact of raising your prices of the impact of raising your prices of course um first order effect which course um first order effect which course um first order effect which everyone knows the second order effect everyone knows the second order effect everyone knows the second order effect that i don't think most people think that i don't think most people think that i don't think most people think about right so i'm not here to tell you about right so i'm not here to tell you about right so i'm not here to tell you obvious things i'm going to say raise obvious things i'm going to say raise obvious things i'm going to say raise your prices that's the obvious thing but your prices that's the obvious thing but your prices that's the obvious thing but then i'm going to say why and then i'm then i'm going to say why and then i'm then i'm going to say why and then i'm going to say second order why and then going to say second order why and then going to say second order why and then i'm going to actually talk i'm going to actually talk i'm going to actually talk in depth i've raised prices in depth i've raised prices in depth i've raised prices i was trying to think i think 5 i was trying to think i think 5 i was trying to think i think 5 i think five different times i think five different times i think five different times i raised prices on assassin it might be i raised prices on assassin it might be i raised prices on assassin it might be six then i've seen it done really well six then i've seen it done really well six then i've seen it done really well uh i've been involved uh i've been involved uh i've been involved intimately reviewing things about sas intimately reviewing things about sas intimately reviewing things about sas pricing increases total maybe 15 to 20 pricing increases total maybe 15 to 20 pricing increases total maybe 15 to 20 times um with different founders that times um with different founders that times um with different founders that i've advised or invested in or whatever i've advised or invested in or whatever i've advised or invested in or whatever so i have enough experience it's not an so i have enough experience it's not an so i have enough experience it's not an end of a thousand but it's in probably end of a thousand but it's in probably end of a thousand but it's in probably an end of uh you know more than most an end of uh you know more than most an end of uh you know more than most people do and i've seen it done really people do and i've seen it done really people do and i've seen it done really well and then i've seen me leave a well and then i've seen me leave a well and then i've seen me leave a company and have it done company and have it done company and have it done catastrophically so some of you some of catastrophically so some of you some of catastrophically so some of you some of you get that joke so uh you get that joke so uh you get that joke so uh always start with my why this is this is always start with my why this is this is always start with my why this is this is a microcomp tradition of a microcomp tradition of a microcomp tradition of this is all business advice this is this is all business advice this is this is all business advice this is great we want to build incredible great we want to build incredible great we want to build incredible companies this is why i build companies companies this is why i build companies companies this is why i build companies is for the freedom to do what i want the is for the freedom to do what i want the is for the freedom to do what i want the purpose because building companies is so purpose because building companies is so purpose because building companies is so much fun and my relationships and i

much fun and my relationships and i much fun and my relationships and i think some of you have seen these two think some of you have seen these two think some of you have seen these two little kids here little kids here little kids here when they were running around you know when they were running around you know when they were running around you know three four years old right and yeah i three four years old right and yeah i three four years old right and yeah i have some folks in there so i mean they have some folks in there so i mean they have some folks in there so i mean they were coming to microgrunt back when it were coming to microgrunt back when it were coming to microgrunt back when it was in prague and barcelona they're 15 was in prague and barcelona they're 15 was in prague and barcelona they're 15 and 11 now one's in high school um so and 11 now one's in high school um so and 11 now one's in high school um so things change but you know this is things change but you know this is things change but you know this is this is this is why i'm here this is this is why i'm here this is this is why i'm here so with that so with that so with that let's dive into expansion revenue okay let's dive into expansion revenue okay let's dive into expansion revenue okay so we have we have we have we have it so good with sas we have we have it so good with sas we have we have it so good with sas there's so many things the cost of goods there's so many things the cost of goods there's so many things the cost of goods sold is so low uh distribution is sold is so low uh distribution is sold is so low uh distribution is infinite you build it once you sell it infinite you build it once you sell it infinite you build it once you sell it over and over over and over over and over and recurring revenue we don't talk and recurring revenue we don't talk and recurring revenue we don't talk enough about this in every other enough about this in every other enough about this in every other business if you're not in sas if you business if you're not in sas if you business if you're not in sas if you talk to someone who runs a restaurant talk to someone who runs a restaurant talk to someone who runs a restaurant who runs a um who runs a um who runs a um a services business who runs a one-time a services business who runs a one-time a services business who runs a one-time sale of anything brick and mortar sale of anything brick and mortar sale of anything brick and mortar recurring revenue everybody wants it and recurring revenue everybody wants it and recurring revenue everybody wants it and there's a reason because recurring there's a reason because recurring there's a reason because recurring revenue is the business cheat code right revenue is the business cheat code right revenue is the business cheat code right it there's a reason that there's a it there's a reason that there's a it there's a reason that there's a kajillion books written on this topic kajillion books written on this topic kajillion books written on this topic many of them not very good that one's many of them not very good that one's many of them not very good that one's really good by the way if you decide we really good by the way if you decide we really good by the way if you decide we already have if you're already sass you already have if you're already sass you already have if you're already sass you don't need to read that book but don't need to read that book but don't need to read that book but the whole point of that book is in a the whole point of that book is in a the whole point of that book is in a non-recurring business here's how to get non-recurring business here's how to get non-recurring business here's how to get recurring revenue once you have recurring revenue once you have recurring revenue once you have recurring revenue your sales multiple recurring revenue your sales multiple recurring revenue your sales multiple increases your enterprise value increases your enterprise value increases your enterprise value increases the stability of your business increases the stability of your business increases the stability of your business increases if you hit a recession so much increases if you hit a recession so much increases if you hit a recession so much about it and we get that for free as sas about it and we get that for free as sas about it and we get that for free as sas founders founders founders since we're super greedy we can't stop since we're super greedy we can't stop since we're super greedy we can't stop there what is the sas cheat code there what is the sas cheat code there what is the sas cheat code that's expansion revenue that's expansion revenue that's expansion revenue so what's expansion revenue that's the

so what's expansion revenue that's the so what's expansion revenue that's the opportunity for a customer to pay you opportunity for a customer to pay you opportunity for a customer to pay you more money as they get more value from more money as they get more value from more money as they get more value from your product it's basically having your product it's basically having your product it's basically having pricing tiers that allow them pricing tiers that allow them pricing tiers that allow them that allow them to usually auto upgrade that allow them to usually auto upgrade that allow them to usually auto upgrade sometimes have to manually but usually sometimes have to manually but usually sometimes have to manually but usually they just auto upgrade through the tiers they just auto upgrade through the tiers they just auto upgrade through the tiers they pay you more money they pay you more money they pay you more money why is why is why is that's the first story effect second that's the first story effect second that's the first story effect second order effect why is that important order effect why is that important order effect why is that important because that eventually gets you to net because that eventually gets you to net because that eventually gets you to net negative churn which is something most negative churn which is something most negative churn which is something most apps never see but once you've seen that apps never see but once you've seen that apps never see but once you've seen that negative churn and you've looked at your negative churn and you've looked at your negative churn and you've looked at your business and said wait a minute we had a business and said wait a minute we had a business and said wait a minute we had a really rough month because december really rough month because december really rough month because december sucks every year usually for companies i sucks every year usually for companies i sucks every year usually for companies i started it was right around tax time in started it was right around tax time in started it was right around tax time in the us april may one of those months the us april may one of those months the us april may one of those months sucked december sucked every year sucked december sucked every year sucked december sucked every year we added you know zero net customers but we added you know zero net customers but we added you know zero net customers but our business grew four and a half our business grew four and a half our business grew four and a half percent last month how is that well it's percent last month how is that well it's percent last month how is that well it's net negative churn and if you're net negative churn and if you're net negative churn and if you're actually actively putting things on you actually actively putting things on you actually actively putting things on you know new customers and there's net know new customers and there's net know new customers and there's net negative churn this is what the biggest negative churn this is what the biggest negative churn this is what the biggest business and fastest growing sas business and fastest growing sas business and fastest growing sas businesses in the world are able to businesses in the world are able to businesses in the world are able to achieve it's not trivial but it's achieve it's not trivial but it's achieve it's not trivial but it's something that we should at least strive something that we should at least strive something that we should at least strive for if possible it's not possible with for if possible it's not possible with for if possible it's not possible with every sas business if i were to ever every sas business if i were to ever every sas business if i were to ever start a sas company start a sas company start a sas company again i would have you know we all have again i would have you know we all have again i would have you know we all have our list of things right i'll never send our list of things right i'll never send our list of things right i'll never send email for my app again because it's such email for my app again because it's such email for my app again because it's such a pain in the ass i will never um i will a pain in the ass i will never um i will a pain in the ass i will never um i will never not i will start a business that never not i will start a business that never not i will start a business that has some type of virality in it right has some type of virality in it right has some type of virality in it right and i will start a business that has and i will start a business that has and i will start a business that has some type of uh some type of uh some type of uh of expansion revenue of expansion revenue of expansion revenue so so so let's talk about expansion revenue and let's talk about expansion revenue and let's talk about expansion revenue and then i'll look at a couple examples then i'll look at a couple examples then i'll look at a couple examples the idea oh the funny thing is there's the idea oh the funny thing is there's the idea oh the funny thing is there's two slides here that fonts are all two slides here that fonts are all two slides here that fonts are all different it's because i pulled them we different it's because i pulled them we different it's because i pulled them we have a tiny seed playbook that we do the

have a tiny seed playbook that we do the have a tiny seed playbook that we do the first seven weeks eight weeks of tiny first seven weeks eight weeks of tiny first seven weeks eight weeks of tiny seed and we have one on pricing and one seed and we have one on pricing and one seed and we have one on pricing and one on funnels and it's like everything you on funnels and it's like everything you on funnels and it's like everything you know all the intimate like secret top know all the intimate like secret top know all the intimate like secret top secret details and so i pulled a couple secret details and so i pulled a couple secret details and so i pulled a couple slides from that here because we have slides from that here because we have slides from that here because we have one on on pricing so the idea with one on on pricing so the idea with one on on pricing so the idea with expansion revenue is that you want to expansion revenue is that you want to expansion revenue is that you want to charge more but you want to charge more charge more but you want to charge more charge more but you want to charge more only to the right customer segments only to the right customer segments only to the right customer segments right so the example i often use is right so the example i often use is right so the example i often use is squad cast is a tiny c batch two company squad cast is a tiny c batch two company squad cast is a tiny c batch two company they are they are they are studio quality podcast recording so i go studio quality podcast recording so i go studio quality podcast recording so i go into chrome log into squadcast i send into chrome log into squadcast i send into chrome log into squadcast i send out a link out a link out a link because i'm gonna interview john knox so because i'm gonna interview john knox so because i'm gonna interview john knox so i send him the email and then he and i i send him the email and then he and i i send him the email and then he and i both go in and suddenly studio quality both go in and suddenly studio quality both go in and suddenly studio quality it's a double ender it records locally it's a double ender it records locally it's a double ender it records locally on both sides that's great podcast on both sides that's great podcast on both sides that's great podcast recording recording recording they have you can imagine they could they have you can imagine they could they have you can imagine they could have a pricing tier i've actually seen have a pricing tier i've actually seen have a pricing tier i've actually seen competitors do this um i could just say competitors do this um i could just say competitors do this um i could just say all right cool it's worth 20 bucks a all right cool it's worth 20 bucks a all right cool it's worth 20 bucks a month and there we go we don't really month and there we go we don't really month and there we go we don't really have tiers right have tiers right have tiers right the problem is you get the problem is you get the problem is you get or you could say it's 50 bucks a month or you could say it's 50 bucks a month or you could say it's 50 bucks a month 100 bucks a month you pick a single 100 bucks a month you pick a single 100 bucks a month you pick a single price point problem is you have flight price point problem is you have flight price point problem is you have flight fishing podcasts you have a dungeons and fishing podcasts you have a dungeons and fishing podcasts you have a dungeons and dragons podcast you have hobbyists who dragons podcast you have hobbyists who dragons podcast you have hobbyists who are like kind of balking at nine bucks are like kind of balking at nine bucks are like kind of balking at nine bucks 14 a month you're really that's a lot of 14 a month you're really that's a lot of 14 a month you're really that's a lot of money you have business podcasts like money you have business podcasts like money you have business podcasts like startups for the rest of us um you know startups for the rest of us um you know startups for the rest of us um you know any other podcast we might listen to and any other podcast we might listen to and any other podcast we might listen to and for us 50 bucks 100 bucks a month it's for us 50 bucks 100 bucks a month it's for us 50 bucks 100 bucks a month it's it's nothing right that's that's a good it's nothing right that's that's a good it's nothing right that's that's a good price point price point price point and then you might have a company i'm and then you might have a company i'm and then you might have a company i'm using a using a using a made up example but you have gimlet made up example but you have gimlet made up example but you have gimlet media you have npr you have espn uh media you have npr you have espn uh media you have npr you have espn uh podcast network iheartradio these big podcast network iheartradio these big podcast network iheartradio these big podcast networks that have different

podcast networks that have different podcast networks that have different needs and startups the rest of us and needs and startups the rest of us and needs and startups the rest of us and should pay a hell of a lot more like should pay a hell of a lot more like should pay a hell of a lot more like thousands of dollars a month two three thousands of dollars a month two three thousands of dollars a month two three four five thousand a month probably so four five thousand a month probably so four five thousand a month probably so the the concept here is in this the the concept here is in this the the concept here is in this particular instance right is what particular instance right is what particular instance right is what features or usage patterns differentiate features or usage patterns differentiate features or usage patterns differentiate these customer types such that these customer types such that these customer types such that not only when they sign up you can auto not only when they sign up you can auto not only when they sign up you can auto put them in the bucket that they should put them in the bucket that they should put them in the bucket that they should be be be but but but in other instances actually upgrade over in other instances actually upgrade over in other instances actually upgrade over time even if they start at a lower you time even if they start at a lower you time even if they start at a lower you know a lower price point know a lower price point know a lower price point and so and so and so there's really there's really there's really there's two common ways to do it and a there's two common ways to do it and a there's two common ways to do it and a third that's a bit less common and more third that's a bit less common and more third that's a bit less common and more complex it's the only ways that i've complex it's the only ways that i've complex it's the only ways that i've seen to do this with monthly pricing seen to do this with monthly pricing seen to do this with monthly pricing week i'm not going to cover so we do the week i'm not going to cover so we do the week i'm not going to cover so we do the state of independent sas report and we state of independent sas report and we state of independent sas report and we ask what your pricing is and it's like ask what your pricing is and it's like ask what your pricing is and it's like 85 or 90 of us in the general 85 or 90 of us in the general 85 or 90 of us in the general independent sas community are monthly or independent sas community are monthly or independent sas community are monthly or annual annual annual and then there's like three percent pay and then there's like three percent pay and then there's like three percent pay as you go as you go as you go four percent um what's the other one four percent um what's the other one four percent um what's the other one metered and then there's all these metered and then there's all these metered and then there's all these different ones so i'm not unfortunately different ones so i'm not unfortunately different ones so i'm not unfortunately able to cover those but i'll cover the able to cover those but i'll cover the able to cover those but i'll cover the monthly annual because most people are monthly annual because most people are monthly annual because most people are that so expansion revenue that so expansion revenue that so expansion revenue first way you can do it to first way you can do it to first way you can do it to to to to allow people to upgrade from one to the allow people to upgrade from one to the allow people to upgrade from one to the next is to have a value metric right next is to have a value metric right next is to have a value metric right most people in this room probably know most people in this room probably know most people in this room probably know that what is a value metric that what is a value metric that what is a value metric if you are an email service provider if you are an email service provider if you are an email service provider like mailchimp or like drip then it's like mailchimp or like drip then it's like mailchimp or like drip then it's the number of subscribers or contacts the number of subscribers or contacts the number of subscribers or contacts you have the more subscribers or you have the more subscribers or you have the more subscribers or contacts you have contacts you have contacts you have probably the more value you're getting probably the more value you're getting probably the more value you're getting from the software from the software from the software if you are if you are if you are using crm software like close.com

using crm software like close.com using crm software like close.com salesforce pipedrive then it's seats salesforce pipedrive then it's seats salesforce pipedrive then it's seats right the more sales people you have the right the more sales people you have the right the more sales people you have the more users you have it's just user based more users you have it's just user based more users you have it's just user based so it's great if you can come up with a so it's great if you can come up with a so it's great if you can come up with a value metric to me this is the number value metric to me this is the number value metric to me this is the number one way to do it one way to do it one way to do it it is the best way um overall it is the best way um overall it is the best way um overall one note quick to tangent i have a few one note quick to tangent i have a few one note quick to tangent i have a few quick tips in this thing and i'll say quick tips in this thing and i'll say quick tips in this thing and i'll say this one here the only way the only time this one here the only way the only time this one here the only way the only time that you that you that you can do seat based pricing is if two can do seat based pricing is if two can do seat based pricing is if two users from the same company log in users from the same company log in users from the same company log in and they see different things and they see different things and they see different things so imagine two users both using so imagine two users both using so imagine two users both using mailchimp same company same organization mailchimp same company same organization mailchimp same company same organization they don't see anything different you they don't see anything different you they don't see anything different you really really really should not really really really should not really really really should not do seed based pricing because they can do seed based pricing because they can do seed based pricing because they can just share a login just share a login just share a login if two users log into pipedrive they if two users log into pipedrive they if two users log into pipedrive they have things assigned to them have things assigned to them have things assigned to them it looks different two users log into it looks different two users log into it looks different two users log into help scout help scout help scout that's support software tickets assigned that's support software tickets assigned that's support software tickets assigned to me you got to pass them back that to me you got to pass them back that to me you got to pass them back that makes natural sense so that's that's one makes natural sense so that's that's one makes natural sense so that's that's one rule but anyways value metrics yay rule but anyways value metrics yay rule but anyways value metrics yay that's that's what we want to do some that's that's what we want to do some that's that's what we want to do some places some uh places some uh places some uh let's say industries or or let's say industries or or let's say industries or or verticals that you're in they just verticals that you're in they just verticals that you're in they just aren't super conducive to value metrics aren't super conducive to value metrics aren't super conducive to value metrics so the second one in my opinion is uh so the second one in my opinion is uh so the second one in my opinion is uh feature gating feature gating feature gating which is where you say all right so we which is where you say all right so we which is where you say all right so we can't think of a number that you use can't think of a number that you use can't think of a number that you use more of so we're just going to say if more of so we're just going to say if more of so we're just going to say if you need this salesforce integration or you need this salesforce integration or you need this salesforce integration or the zapier integration then you're on a the zapier integration then you're on a the zapier integration then you're on a higher plan if you need streaming to you higher plan if you need streaming to you higher plan if you need streaming to you direct streaming to youtube or whatever direct streaming to youtube or whatever direct streaming to youtube or whatever we do feature gating and then the third we do feature gating and then the third we do feature gating and then the third one that originally wasn't on my list one that originally wasn't on my list one that originally wasn't on my list but i realized it's actually relatively

but i realized it's actually relatively but i realized it's actually relatively common although it's more common with common although it's more common with common although it's more common with larger companies sort of further along larger companies sort of further along larger companies sort of further along is both it's where you have a value is both it's where you have a value is both it's where you have a value metric and then you also have feature metric and then you also have feature metric and then you also have feature gating gating gating and and and the examples the examples the examples there's a few ways to do this elegantly there's a few ways to do this elegantly there's a few ways to do this elegantly and well i would really discourage you and well i would really discourage you and well i would really discourage you in the early days from doing both um the in the early days from doing both um the in the early days from doing both um the examples that i've seen most common when examples that i've seen most common when examples that i've seen most common when i think of it in search for it is like i think of it in search for it is like i think of it in search for it is like if you go to mailchimp site they do it if you go to mailchimp site they do it if you go to mailchimp site they do it if you go to zapier they do it if you go to zapier they do it if you go to zapier they do it salesforce salesforce salesforce intercom intercom intercom there's one other that i thought of there's one other that i thought of there's one other that i thought of and if there's one thing all those have and if there's one thing all those have and if there's one thing all those have in common and it's that they're all in common and it's that they're all in common and it's that they're all valued at a billion dollars or more and valued at a billion dollars or more and valued at a billion dollars or more and they didn't start with that pricing and they didn't start with that pricing and they didn't start with that pricing and especially if you're i would say if especially if you're i would say if especially if you're i would say if you're sub a million arr you should i you're sub a million arr you should i you're sub a million arr you should i would i would sacrifice some revenue would i would sacrifice some revenue would i would sacrifice some revenue some mrr in order to be simple in their some mrr in order to be simple in their some mrr in order to be simple in their early days to get to get customers early days to get to get customers early days to get to get customers because you'll see the pricing pages because you'll see the pricing pages because you'll see the pricing pages later as we thumb through a couple of later as we thumb through a couple of later as we thumb through a couple of them and it's pretty pretty complicated them and it's pretty pretty complicated them and it's pretty pretty complicated so so so um um um here's a couple pricing pages just to here's a couple pricing pages just to here's a couple pricing pages just to give you examples so this is aweber and give you examples so this is aweber and give you examples so this is aweber and they of course are email service they of course are email service they of course are email service provider they compete with mailchimp and provider they compete with mailchimp and provider they compete with mailchimp and activecampaign and such and they activecampaign and such and they activecampaign and such and they actually are using um they're using it actually are using um they're using it actually are using um they're using it against their competitor right they're against their competitor right they're against their competitor right they're they're saying no funny stuff everyone they're saying no funny stuff everyone they're saying no funny stuff everyone gets everything with aweber because if gets everything with aweber because if gets everything with aweber because if you go to mailchimp you don't everyone you go to mailchimp you don't everyone you go to mailchimp you don't everyone doesn't get everything because depending doesn't get everything because depending doesn't get everything because depending on which tier you are then you have on which tier you are then you have on which tier you are then you have subscribers so they are kind of doing subscribers so they are kind of doing subscribers so they are kind of doing the jiu jitsu move i don't know if it's the jiu jitsu move i don't know if it's the jiu jitsu move i don't know if it's working or not but i think it is clever working or not but i think it is clever working or not but i think it is clever because mailchimp is a 900 pound gorilla because mailchimp is a 900 pound gorilla because mailchimp is a 900 pound gorilla right so their value metric is right so their value metric is right so their value metric is subscribers the more subscribers you subscribers the more subscribers you subscribers the more subscribers you have have have the more revenue you pay them this is

the more revenue you pay them this is the more revenue you pay them this is makes it pretty easy to build an esp makes it pretty easy to build an esp makes it pretty easy to build an esp because the pricing model is because the pricing model is because the pricing model is you know as all decided you know as all decided you know as all decided this is a small page this is the pricing this is a small page this is the pricing this is a small page this is the pricing page from castos yay podcast hosting now page from castos yay podcast hosting now page from castos yay podcast hosting now something that something that something that unfortunately in the podcast hosting unfortunately in the podcast hosting unfortunately in the podcast hosting space is a bunch of the early podcast space is a bunch of the early podcast space is a bunch of the early podcast hosts decided that they were going to hosts decided that they were going to hosts decided that they were going to allow unlimited podcasts and unlimited allow unlimited podcasts and unlimited allow unlimited podcasts and unlimited episodes this is before cast i mean we episodes this is before cast i mean we episodes this is before cast i mean we were talking like 2008 9 10. were talking like 2008 9 10. were talking like 2008 9 10. so a lot of the companies in the space so a lot of the companies in the space so a lot of the companies in the space are are are forced encouraged to do that to do forced encouraged to do that to do forced encouraged to do that to do unlimited unlimited unlimited unlimited unlimited unlimited there are some that are not doing it and there are some that are not doing it and there are some that are not doing it and i actually believe craig just talked i actually believe craig just talked i actually believe craig just talked about on a podcast i'm pretty sure it about on a podcast i'm pretty sure it about on a podcast i'm pretty sure it was a public podcast that that they're was a public podcast that that they're was a public podcast that that they're looking at adjusting their pricing and looking at adjusting their pricing and looking at adjusting their pricing and so there are ways out of this but really so there are ways out of this but really so there are ways out of this but really castos is a you know is a successful um castos is a you know is a successful um castos is a you know is a successful um company that's doing quite a bit of company that's doing quite a bit of company that's doing quite a bit of revenue and they have done it without a revenue and they have done it without a revenue and they have done it without a value metric to date and of course value metric to date and of course value metric to date and of course they're just feature gating right so they're just feature gating right so they're just feature gating right so they're feature getting this video they're feature getting this video they're feature getting this video republishing to youtube a headliner republishing to youtube a headliner republishing to youtube a headliner audiogram integration advanced analytics audiogram integration advanced analytics audiogram integration advanced analytics and they had to figure out you know what and they had to figure out you know what and they had to figure out you know what the interesting thing is actually so i the interesting thing is actually so i the interesting thing is actually so i have three podcasts on castos i have two have three podcasts on castos i have two have three podcasts on castos i have two it's tiny there's a tiny c podcast it's tiny there's a tiny c podcast it's tiny there's a tiny c podcast tinyctails microconf podcast and tinyctails microconf podcast and tinyctails microconf podcast and startups the rest of us tinyseedtails startups the rest of us tinyseedtails startups the rest of us tinyseedtails and microcomp were on the 190 plan and microcomp were on the 190 plan and microcomp were on the 190 plan because they didn't need extra stuff and because they didn't need extra stuff and because they didn't need extra stuff and then starts the rest of us which is then starts the rest of us which is then starts the rest of us which is actually a larger podcast it's more actually a larger podcast it's more actually a larger podcast it's more complicated we need more stuff for it complicated we need more stuff for it complicated we need more stuff for it we're in the 490 tier we're in the 490 tier we're in the 490 tier um so in this in this case it works so um so in this in this case it works so um so in this in this case it works so that's feature gating and then here's an that's feature gating and then here's an that's feature gating and then here's an elegant way to do both this is the way i

elegant way to do both this is the way i elegant way to do both this is the way i discourage you from doing both unless discourage you from doing both unless discourage you from doing both unless you really really know what you're doing you really really know what you're doing you really really know what you're doing but this is an interesting way this is but this is an interesting way this is but this is an interesting way this is rails auto scale which is an add-on for rails auto scale which is an add-on for rails auto scale which is an add-on for heroku and what he found out the value heroku and what he found out the value heroku and what he found out the value metric here is metric here is metric here is the dinos right these are just servers the dinos right these are just servers the dinos right these are just servers vps's i believe so like one to three vps's i believe so like one to three vps's i believe so like one to three dinos one to nine one to 29 that scales dinos one to nine one to 29 that scales dinos one to nine one to 29 that scales you up and down between that many um you up and down between that many um you up and down between that many um and so that really is a value metric but and so that really is a value metric but and so that really is a value metric but then what he found is then what he found is then what he found is the feature gate is that standard dynos the feature gate is that standard dynos the feature gate is that standard dynos are slower less ram whatever they are are slower less ram whatever they are are slower less ram whatever they are and then less memory and then and then less memory and then and then less memory and then performance dynos are quite a bit more performance dynos are quite a bit more performance dynos are quite a bit more expensive so he quickly figured out that expensive so he quickly figured out that expensive so he quickly figured out that he could differentiate there and if they he could differentiate there and if they he could differentiate there and if they had three or four types of dinos of had three or four types of dinos of had three or four types of dinos of course he would have different pricing course he would have different pricing course he would have different pricing for him so that's like a kind of elegant for him so that's like a kind of elegant for him so that's like a kind of elegant way to do it way to do it way to do it um it's not terrible um it's not terrible um it's not terrible this in my opinion this is mailchimp and this in my opinion this is mailchimp and this in my opinion this is mailchimp and look they sold for 12 billion dollars look they sold for 12 billion dollars look they sold for 12 billion dollars three weeks ago so it's not like they're three weeks ago so it's not like they're three weeks ago so it's not like they're doing anything wrong but you know what doing anything wrong but you know what doing anything wrong but you know what go back to their pricing in 2007 it go back to their pricing in 2007 it go back to their pricing in 2007 it didn't look like this right it used to didn't look like this right it used to didn't look like this right it used to be one plan be one plan be one plan purely subscribers and it wasn't until purely subscribers and it wasn't until purely subscribers and it wasn't until they got way in and had kajillion data they got way in and had kajillion data they got way in and had kajillion data points that they that they started doing points that they that they started doing points that they that they started doing this kind of stuff this is not the full this kind of stuff this is not the full this kind of stuff this is not the full pricing page pricing page pricing page the down here where you see it says the down here where you see it says the down here where you see it says marketing crm and then contacts marketing crm and then contacts marketing crm and then contacts audiences and it goes down i mean audiences and it goes down i mean audiences and it goes down i mean there's a huge list it's quite complex there's a huge list it's quite complex there's a huge list it's quite complex and it's this is pretty rough for me um and it's this is pretty rough for me um and it's this is pretty rough for me um even if i were a new user i mean geez i even if i were a new user i mean geez i even if i were a new user i mean geez i built an esp built an esp built an esp and like when i try to read this and and like when i try to read this and and like when i try to read this and figure out what i would need i don't figure out what i would need i don't figure out what i would need i don't know like it's this is daunting to know like it's this is daunting to know like it's this is daunting to someone who's like in the industry so

someone who's like in the industry so someone who's like in the industry so again i discourage that in the early again i discourage that in the early again i discourage that in the early days zapier days zapier days zapier same thing even if you do it well it's there's still a lot there all right it's there's still a lot there all right so that's both so that's both so that's both that's expansion revenue second piece that's expansion revenue second piece that's expansion revenue second piece average revenue per customer average revenue per customer average revenue per customer not ltv rpc not ltv not ltv rpc not ltv not ltv rpc not ltv um um um this one's an interesting one so of this one's an interesting one so of this one's an interesting one so of course we all pay attention to lifetime course we all pay attention to lifetime course we all pay attention to lifetime value right and lifetime value value right and lifetime value value right and lifetime value is is is an easy equation it's your average an easy equation it's your average an easy equation it's your average revenue per customer divided by your revenue per customer divided by your revenue per customer divided by your churn that's the easiest one there's a churn that's the easiest one there's a churn that's the easiest one there's a bunch you can go online and find more bunch you can go online and find more bunch you can go online and find more complicated ones that's the simple one complicated ones that's the simple one complicated ones that's the simple one and so obviously we want to pay and so obviously we want to pay and so obviously we want to pay attention to there's like six metrics attention to there's like six metrics attention to there's like six metrics that are like the most important in sas that are like the most important in sas that are like the most important in sas right that was almost another talk i right that was almost another talk i right that was almost another talk i wrote i have them all written out but wrote i have them all written out but wrote i have them all written out but churn is one of them ltv is another the churn is one of them ltv is another the churn is one of them ltv is another the issue is i'm going to show you two issue is i'm going to show you two issue is i'm going to show you two examples and point out why ltv is good examples and point out why ltv is good examples and point out why ltv is good but it's a it's a longer term thing but it's a it's a longer term thing but it's a it's a longer term thing in the near term as bootstrappers mostly in the near term as bootstrappers mostly in the near term as bootstrappers mostly bootstrappers we need to be thinking bootstrappers we need to be thinking bootstrappers we need to be thinking about our c average per customer more about our c average per customer more about our c average per customer more than ltv than ltv than ltv so so so 50 a month average revenue 50 a month average revenue 50 a month average revenue five percent churn five percent churn five percent churn so i take 50 i divide it by .05 in my so i take 50 i divide it by .05 in my so i take 50 i divide it by .05 in my good handy calculator and of course we good handy calculator and of course we good handy calculator and of course we get a thousand dollars so that's my get a thousand dollars so that's my get a thousand dollars so that's my lifetime value lifetime value lifetime value of a customer of a customer of a customer and so i used to think i remember in and so i used to think i remember in and so i used to think i remember in you know 2008 2009 as i was just you know 2008 2009 as i was just you know 2008 2009 as i was just starting to get in to recurring stuff starting to get in to recurring stuff starting to get in to recurring stuff and i i said wow it's a thousand bucks and i i said wow it's a thousand bucks and i i said wow it's a thousand bucks so that means if i could you know run so that means if i could you know run so that means if i could you know run ads and get a customer for 700

ads and get a customer for 700 ads and get a customer for 700 and most of the there's really low and most of the there's really low and most of the there's really low server costs and it was just me working server costs and it was just me working server costs and it was just me working on this app on this app on this app i could make like 300 bucks right so i i could make like 300 bucks right so i i could make like 300 bucks right so i should just do that a bunch of times should just do that a bunch of times should just do that a bunch of times here's the problem here's the problem here's the problem average revenue for customer overturn average revenue for customer overturn average revenue for customer overturn let's say it's still at 50 a month but let's say it's still at 50 a month but let's say it's still at 50 a month but let's say i'm really good and i'm really let's say i'm really good and i'm really let's say i'm really good and i'm really sticky and i have a one percent churn sticky and i have a one percent churn sticky and i have a one percent churn so now my lifetime value is five grand so now my lifetime value is five grand so now my lifetime value is five grand that's great i have increased it that's great i have increased it that's great i have increased it it seems like a lot of money so now can it seems like a lot of money so now can it seems like a lot of money so now can i spend four grand and make a grand i spend four grand and make a grand i spend four grand and make a grand in theory in theory in theory assuming no costs obviously assuming no costs obviously assuming no costs obviously the problem the problem the problem is you will get that 5 000 is you will get that 5 000 is you will get that 5 000 over 8.33 years over 8.33 years over 8.33 years and that's the kicker is that lifetime and that's the kicker is that lifetime and that's the kicker is that lifetime value can be deceiving especially if value can be deceiving especially if value can be deceiving especially if your churn is very low your churn is very low your churn is very low so that's where average revenue per so that's where average revenue per so that's where average revenue per customer customer customer has is a shorter term thing and as has is a shorter term thing and as has is a shorter term thing and as bootstrappers we have to since we don't bootstrappers we have to since we don't bootstrappers we have to since we don't have a million five million in cash we have a million five million in cash we have a million five million in cash we have to think a little shorter term in have to think a little shorter term in have to think a little shorter term in venture capital the rule of thumb is venture capital the rule of thumb is venture capital the rule of thumb is that you should spend no more than 12 that you should spend no more than 12 that you should spend no more than 12 months of uh months of uh months of uh of of of it's called the acv right the annual it's called the acv right the annual it's called the acv right the annual contract value you should spend more contract value you should spend more contract value you should spend more than 12 months of revenue from a than 12 months of revenue from a than 12 months of revenue from a customer to acquire them that's a loose customer to acquire them that's a loose customer to acquire them that's a loose rule rule rule with bootstrappers the loose rule is with bootstrappers the loose rule is with bootstrappers the loose rule is three to six months six is i think i got three to six months six is i think i got three to six months six is i think i got to seven at one point we had a bunch of to seven at one point we had a bunch of to seven at one point we had a bunch of money in the bank so money in the bank money in the bank so money in the bank money in the bank so money in the bank becomes a bigger constraint arpu is more becomes a bigger constraint arpu is more becomes a bigger constraint arpu is more important than ltv because you can't important than ltv because you can't important than ltv because you can't think out three four five years right if think out three four five years right if think out three four five years right if your lifetime is that long because you your lifetime is that long because you your lifetime is that long because you don't have the cash for it

don't have the cash for it don't have the cash for it so that's where we're talking about okay so that's where we're talking about okay so that's where we're talking about okay i can increase my ltv just by driving i can increase my ltv just by driving i can increase my ltv just by driving turndown turndown turndown but but but that's why i'm raising prices is so that's why i'm raising prices is so that's why i'm raising prices is so important is that the only way to raise important is that the only way to raise important is that the only way to raise my average over customer usually is to my average over customer usually is to my average over customer usually is to have expansion revenue have expansion revenue have expansion revenue or to raise my prices so that's why or to raise my prices so that's why or to raise my prices so that's why those two pieces are part of the talk so those two pieces are part of the talk so those two pieces are part of the talk so the first order effect of all this is the first order effect of all this is the first order effect of all this is average revenue per customer should go average revenue per customer should go average revenue per customer should go up and we understand it's more important up and we understand it's more important up and we understand it's more important than lifetime value for the most part than lifetime value for the most part than lifetime value for the most part what's the second order effect of this what's the second order effect of this what's the second order effect of this this is a piece that this is a piece that this is a piece that i don't know is talked about enough and i don't know is talked about enough and i don't know is talked about enough and i don't know it may not have occurred to i don't know it may not have occurred to i don't know it may not have occurred to some folks in this room why does average some folks in this room why does average some folks in this room why does average driven per customer going up matter driven per customer going up matter driven per customer going up matter and it's because and it's because and it's because of this slide of this slide of this slide this is every market b2b sas marketing this is every market b2b sas marketing this is every market b2b sas marketing approach i think it's everyone that i approach i think it's everyone that i approach i think it's everyone that i know of know of know of and i pulled these out of traction the and i pulled these out of traction the and i pulled these out of traction the book by gabriel weinberg this is from book by gabriel weinberg this is from book by gabriel weinberg this is from our tiny seed playbook this is from just our tiny seed playbook this is from just our tiny seed playbook this is from just it's just from all my stuff um i'm like it's just from all my stuff um i'm like it's just from all my stuff um i'm like working on a book and i have a list and working on a book and i have a list and working on a book and i have a list and i pull it out and put it here it's not i pull it out and put it here it's not i pull it out and put it here it's not that many actually i'm sure there's some that many actually i'm sure there's some that many actually i'm sure there's some others but uh you know there's some others but uh you know there's some others but uh you know there's some broad ones offline ads like what does broad ones offline ads like what does broad ones offline ads like what does that actually mean well it's like that actually mean well it's like that actually mean well it's like billboards and and radio ads or whatever billboards and and radio ads or whatever billboards and and radio ads or whatever not that many of us would do that not that many of us would do that not that many of us would do that here's the thing if your average over or if your average if your average over or if your average revenue per customer revenue per customer revenue per customer or your annual contract value let's say or your annual contract value let's say or your annual contract value let's say you know is is let's say you get 500 you know is is let's say you get 500 you know is is let's say you get 500 over the course of a year over the course of a year over the course of a year you can only do you can only do you can only do three or three maybe four of these you three or three maybe four of these you three or three maybe four of these you just can't afford the others so your just can't afford the others so your just can't afford the others so your business is severely limited in terms of

business is severely limited in terms of business is severely limited in terms of growth growth growth if you want to build a two three hundred if you want to build a two three hundred if you want to build a two three hundred thousand dollar business great you're thousand dollar business great you're thousand dollar business great you're all set that's a great thing i've had all set that's a great thing i've had all set that's a great thing i've had some of those they're amazing some of those they're amazing some of those they're amazing if you do want to be more ambitious and if you do want to be more ambitious and if you do want to be more ambitious and get into the seven figure away figure get into the seven figure away figure get into the seven figure away figure you ha you have to have a larger uh acv you ha you have to have a larger uh acv you ha you have to have a larger uh acv than that you have to have a higher than that you have to have a higher than that you have to have a higher average revenue per customer average revenue per customer average revenue per customer if you have a lifetime i keep saying if you have a lifetime i keep saying if you have a lifetime i keep saying lifetime if you have an annual contract lifetime if you have an annual contract lifetime if you have an annual contract value of say 5 000 value of say 5 000 value of say 5 000 you can do half maybe 60 you can do half maybe 60 you can do half maybe 60 and when you get up to 25 000 or 50 and when you get up to 25 000 or 50 and when you get up to 25 000 or 50 thousand thousand thousand that's enterprise right you can do that's enterprise right you can do that's enterprise right you can do pretty much everything on that slide so pretty much everything on that slide so pretty much everything on that slide so it's it's it's it's it's it's not just not just not just making more profit making more profit making more profit it is it is it is um the ability to try and execute more um the ability to try and execute more um the ability to try and execute more marketing approaches marketing approaches marketing approaches let's talk about the impact of raising let's talk about the impact of raising let's talk about the impact of raising prices now we're going to talk about the prices now we're going to talk about the prices now we're going to talk about the impact of it we're going to talk about a impact of it we're going to talk about a impact of it we're going to talk about a first order and a second order effect first order and a second order effect first order and a second order effect quickly and then we're going to go to quickly and then we're going to go to quickly and then we're going to go to the end which is the end which is the end which is how to raise prices like get in a little how to raise prices like get in a little how to raise prices like get in a little as much as i can with you know 15 as much as i can with you know 15 as much as i can with you know 15 minutes left but get into some minutes left but get into some minutes left but get into some nitty-gritty all right so the impact of nitty-gritty all right so the impact of nitty-gritty all right so the impact of raising prices i tweeted this out a few raising prices i tweeted this out a few raising prices i tweeted this out a few weeks ago pricing is one of the biggest weeks ago pricing is one of the biggest weeks ago pricing is one of the biggest levers we have is sas founders there's a levers we have is sas founders there's a levers we have is sas founders there's a reason so many microgrunt docs talk reason so many microgrunt docs talk reason so many microgrunt docs talk about raising prices it is one of the about raising prices it is one of the about raising prices it is one of the very few things you can do very few things you can do very few things you can do by just going and changing a number on a by just going and changing a number on a by just going and changing a number on a pricing page and a number in a stripe pricing page and a number in a stripe pricing page and a number in a stripe call right it's scary what i find is call right it's scary what i find is call right it's scary what i find is that the the technical ability to change that the the technical ability to change that the the technical ability to change things is not that hard it's usually the things is not that hard it's usually the things is not that hard it's usually the emotional oh my god i'm going to emotional oh my god i'm going to emotional oh my god i'm going to completely crush my business right or completely crush my business right or completely crush my business right or i'm going to take it too far i'm going to take it too far i'm going to take it too far because you know all your numbers at x because you know all your numbers at x because you know all your numbers at x pricing and the moment you change them pricing and the moment you change them pricing and the moment you change them everything goes haywire right so there's everything goes haywire right so there's everything goes haywire right so there's a big emotional fear and that's

a big emotional fear and that's a big emotional fear and that's something that we i help like both the something that we i help like both the something that we i help like both the tiny sea founders and founders i advise tiny sea founders and founders i advise tiny sea founders and founders i advise and stuff is getting them over the and stuff is getting them over the and stuff is getting them over the emotional hurdle and to think about it emotional hurdle and to think about it emotional hurdle and to think about it often as more of an experiment than often as more of an experiment than often as more of an experiment than anything anything anything so here are a couple graphs from a so here are a couple graphs from a so here are a couple graphs from a couple tiny seeds ago i use i use tiny couple tiny seeds ago i use i use tiny couple tiny seeds ago i use i use tiny seed companies because i have access to seed companies because i have access to seed companies because i have access to their revenue right so i'm going to keep their revenue right so i'm going to keep their revenue right so i'm going to keep them them them anonymous anonymous anonymous but this is when they started but this is when they started but this is when they started tiny seed tiny seed tiny seed and that's the month we did our pricing and that's the month we did our pricing and that's the month we did our pricing playbook and our pricing playbook is playbook and our pricing playbook is playbook and our pricing playbook is some of what i've had in here but a lot some of what i've had in here but a lot some of what i've had in here but a lot of it is like most of you are of it is like most of you are of it is like most of you are underpriced or mispriced your value underpriced or mispriced your value underpriced or mispriced your value metrics off you know you should switch metrics off you know you should switch metrics off you know you should switch from feature gating to value metric blah from feature gating to value metric blah from feature gating to value metric blah blah blah so blah blah so blah blah so that company that company that company that company that company that company that company there's a there's a bunch that company there's a there's a bunch that company there's a there's a bunch more um the interesting thing i mean you more um the interesting thing i mean you more um the interesting thing i mean you can you can see a big spike up right now can you can see a big spike up right now can you can see a big spike up right now that's from other things too the that's from other things too the that's from other things too the founders got some funding from us they founders got some funding from us they founders got some funding from us they you know maybe moved to full time or you know maybe moved to full time or you know maybe moved to full time or whatever excuse me but each of these whatever excuse me but each of these whatever excuse me but each of these absolutely changed prices and said that absolutely changed prices and said that absolutely changed prices and said that it had a major fundamental impact on it had a major fundamental impact on it had a major fundamental impact on their graph their graph their graph um and i actually said there's a green um and i actually said there's a green um and i actually said there's a green line there where i extended it out line there where i extended it out line there where i extended it out and and and if they hadn't if they hadn't if they hadn't you know if they have been the same you know if they have been the same you know if they have been the same slide and in theory they hadn't uh slide and in theory they hadn't uh slide and in theory they hadn't uh changed pricing they would have been changed pricing they would have been changed pricing they would have been just over 10k and in fact by march of just over 10k and in fact by march of just over 10k and in fact by march of the next year from may to march they the next year from may to march they the next year from may to march they were at almost 20k so it's a substantial were at almost 20k so it's a substantial were at almost 20k so it's a substantial number right number right number right if you're able to do this i often get if you're able to do this i often get if you're able to do this i often get the question i'll head off of the past the question i'll head off of the past the question i'll head off of the past like but you know should i just raise it like but you know should i just raise it like but you know should i just raise it i can't raise them to infinity right i can't raise them to infinity right i can't raise them to infinity right it's like you can't right at a certain it's like you can't right at a certain it's like you can't right at a certain point you do get too high for where your point you do get too high for where your point you do get too high for where your market is and where your product is but

market is and where your product is but market is and where your product is but you you can get there but most people you you can get there but most people you you can get there but most people don't is what i'll say don't is what i'll say don't is what i'll say so the first order effect is raising so the first order effect is raising so the first order effect is raising prices helps grow mrr more prices helps grow mrr more prices helps grow mrr more here's a second order effect here's a second order effect here's a second order effect that thing that i don't think enough that thing that i don't think enough that thing that i don't think enough people think about when we talk about people think about when we talk about people think about when we talk about this this this so again this is tweets that i did so again this is tweets that i did so again this is tweets that i did nine months ago or maybe even more so nine months ago or maybe even more so nine months ago or maybe even more so for more than a decade this is my thing for more than a decade this is my thing for more than a decade this is my thing i've been harping on right i've been i've been harping on right i've been i've been harping on right i've been saying lower paying customers churn saying lower paying customers churn saying lower paying customers churn faster here's another data point this faster here's another data point this faster here's another data point this one from a tiny c company who remain a one from a tiny c company who remain a one from a tiny c company who remain a user permission they'll remain anonymous user permission they'll remain anonymous user permission they'll remain anonymous so we're going to look at some data this so we're going to look at some data this so we're going to look at some data this is one company but this is the it is the is one company but this is the it is the is one company but this is the it is the exact pattern i see over and over and exact pattern i see over and over and exact pattern i see over and over and over across companies all right so let's over across companies all right so let's over across companies all right so let's remember this segment a pays 30 bucks a remember this segment a pays 30 bucks a remember this segment a pays 30 bucks a month segment b pays at least 100 so 100 month segment b pays at least 100 so 100 month segment b pays at least 100 so 100 and up so segment a low paying segment b and up so segment a low paying segment b and up so segment a low paying segment b higher enormous difference between uh in higher enormous difference between uh in higher enormous difference between uh in net churn and ltv net churn and ltv net churn and ltv segment a low paying net revenue turn of segment a low paying net revenue turn of segment a low paying net revenue turn of 11 11 11 segment b segment b segment b which is 80 of their revenue yay but which is 80 of their revenue yay but which is 80 of their revenue yay but more 100 and more right more 100 and more right more 100 and more right literally negative 4 net negative churn literally negative 4 net negative churn literally negative 4 net negative churn i already talked about how powerful that i already talked about how powerful that i already talked about how powerful that is is is trying to grow a company i'm reading my trying to grow a company i'm reading my trying to grow a company i'm reading my own tweet here with 11 net negative own tweet here with 11 net negative own tweet here with 11 net negative churn versus -4 is not in the same churn versus -4 is not in the same churn versus -4 is not in the same ballpark that single metric can be the ballpark that single metric can be the ballpark that single metric can be the difference between 250k arr and a difference between 250k arr and a difference between 250k arr and a million irr or more million irr or more million irr or more in in the audience if you have never in in the audience if you have never in in the audience if you have never segmented your churn segmented your churn segmented your churn by by by how much they're paying you by pricing how much they're paying you by pricing how much they're paying you by pricing tier or by however you know however you

tier or by however you know however you tier or by however you know however you do it it is fun it is crazy to see the do it it is fun it is crazy to see the do it it is fun it is crazy to see the value that you are actually getting and value that you are actually getting and value that you are actually getting and and the um just the long-term you know and the um just the long-term you know and the um just the long-term you know um long-term value that you're getting um long-term value that you're getting um long-term value that you're getting from the your usually it's your higher from the your usually it's your higher from the your usually it's your higher paying customers paying customers paying customers so that's our second order effect right so that's our second order effect right so that's our second order effect right i told you i was going to tell you i told you i was going to tell you i told you i was going to tell you something maybe a little obvious then something maybe a little obvious then something maybe a little obvious then hopefully something you haven't heard hopefully something you haven't heard hopefully something you haven't heard and then i'm just going to walk through and then i'm just going to walk through and then i'm just going to walk through one example from chinese batch one this one example from chinese batch one this one example from chinese batch one this is when we realized we really uh is when we realized we really uh is when we realized we really uh that we had to really harp on pricing that we had to really harp on pricing that we had to really harp on pricing it's a company called gather visual spec it's a company called gather visual spec it's a company called gather visual spec management for interior design teams and management for interior design teams and management for interior design teams and architects and when they first came to architects and when they first came to architects and when they first came to us they were doing a high-touch sale in us they were doing a high-touch sale in us they were doing a high-touch sale in essence it was a one or two demo close essence it was a one or two demo close essence it was a one or two demo close so so so zoom calls right one or two demo close zoom calls right one or two demo close zoom calls right one or two demo close and their lowest price was 29 dollars a and their lowest price was 29 dollars a and their lowest price was 29 dollars a month month month so that's an so that's an so that's an that's a that's a that's a in unfeasible business that business it in unfeasible business that business it in unfeasible business that business it just can't work you can't hire sales just can't work you can't hire sales just can't work you can't hire sales people and compensate them at that so we people and compensate them at that so we people and compensate them at that so we encourage them raise the pricing and i encourage them raise the pricing and i encourage them raise the pricing and i believe this was they raised 39 and 79 believe this was they raised 39 and 79 believe this was they raised 39 and 79 because again it's hard to they said because again it's hard to they said because again it's hard to they said we're going to leave people behind we're going to leave people behind we're going to leave people behind they actually didn't have a bunch of they actually didn't have a bunch of they actually didn't have a bunch of great features for larger companies so great features for larger companies so great features for larger companies so they were still building them so they they were still building them so they they were still building them so they moved slowly moved slowly moved slowly and then they realized they moved to 39 and then they realized they moved to 39 and then they realized they moved to 39 there was no difference then they moved there was no difference then they moved there was no difference then they moved to 99 to 99 to 99 there was no difference in terms of there was no difference in terms of there was no difference in terms of people not people not people not converting or people not sticking around converting or people not sticking around converting or people not sticking around there's no increased churn or whatever there's no increased churn or whatever there's no increased churn or whatever so suddenly they're realizing where is so suddenly they're realizing where is so suddenly they're realizing where is the ceiling right how high can this go the ceiling right how high can this go the ceiling right how high can this go because you go to an architecture firm because you go to an architecture firm because you go to an architecture firm of five 10 20 people and you think about of five 10 20 people and you think about of five 10 20 people and you think about if they're going to run a huge chunk of if they're going to run a huge chunk of if they're going to run a huge chunk of their workflow on it do they care their workflow on it do they care their workflow on it do they care is 30 and 130 or 99 isn't that kind of

is 30 and 130 or 99 isn't that kind of is 30 and 130 or 99 isn't that kind of like it's trivial it's a rounding error like it's trivial it's a rounding error like it's trivial it's a rounding error to your business right to your business right to your business right when we last left uh gather i think this when we last left uh gather i think this when we last left uh gather i think this is what they have today they redesigned is what they have today they redesigned is what they have today they redesigned their pricing page but 165 and 290. their pricing page but 165 and 290. their pricing page but 165 and 290. and and and they they did this i don't know six or they they did this i don't know six or they they did this i don't know six or eight months ago and you know folks who eight months ago and you know folks who eight months ago and you know folks who have access to their revenue graph know have access to their revenue graph know have access to their revenue graph know that that it just keeps going they have that that it just keeps going they have that that it just keeps going they have they're at their fastest growth rate they're at their fastest growth rate they're at their fastest growth rate ever um because two things number one ever um because two things number one ever um because two things number one they raise prices and number two they raise prices and number two they raise prices and number two they are now getting customers who churn they are now getting customers who churn they are now getting customers who churn less that second order effect less that second order effect less that second order effect all right so now a couple tips these are all right so now a couple tips these are all right so now a couple tips these are almost like like asterisks some of these almost like like asterisks some of these almost like like asterisks some of these have been questions because i gave parts have been questions because i gave parts have been questions because i gave parts of this talk at the locals and people of this talk at the locals and people of this talk at the locals and people would ask a question so now i'm going to would ask a question so now i'm going to would ask a question so now i'm going to give you a tip that give you a tip that give you a tip that maybe you're thinking in the audience um maybe you're thinking in the audience um maybe you're thinking in the audience um this is one that we did back in the drip this is one that we did back in the drip this is one that we did back in the drip days and i think i might have done it days and i think i might have done it days and i think i might have done it with hit tail too with hit tail too with hit tail too you there's a there's a hack around you there's a there's a hack around you there's a there's a hack around directly raising prices is that directly raising prices is that directly raising prices is that you can decrease the value of a specific you can decrease the value of a specific you can decrease the value of a specific plan plan plan so meaning so meaning so meaning today if you get 3 000 subscribers for today if you get 3 000 subscribers for today if you get 3 000 subscribers for 49 i can just switch it tomorrow to 49 i can just switch it tomorrow to 49 i can just switch it tomorrow to where where where you get 2500 right you just down to kind you get 2500 right you just down to kind you get 2500 right you just down to kind of move it down of move it down of move it down i we did this because i really liked our i we did this because i really liked our i we did this because i really liked our price points with drip 49.99 149 it just price points with drip 49.99 149 it just price points with drip 49.99 149 it just made sense it didn't want to go 59 made sense it didn't want to go 59 made sense it didn't want to go 59 109 150 you know it just it becomes 109 150 you know it just it becomes 109 150 you know it just it becomes awkward awkward awkward um so you can drop the value metric um so you can drop the value metric um so you can drop the value metric right right right the other way the other way the other way is doesn't raise all your pricing but is doesn't raise all your pricing but is doesn't raise all your pricing but it's to drop your lowest pricing plan it's to drop your lowest pricing plan it's to drop your lowest pricing plan that's another way to raise your average that's another way to raise your average that's another way to raise your average our new customers pretty that one's our new customers pretty that one's our new customers pretty that one's super easy to do because you go and you super easy to do because you go and you super easy to do because you go and you hide a div or whatever and then you just hide a div or whatever and then you just hide a div or whatever and then you just watch it for a week as you bite your

watch it for a week as you bite your watch it for a week as you bite your fingernails and then you just watch fingernails and then you just watch fingernails and then you just watch usually there not be a difference usually there not be a difference usually there not be a difference there are cases where that doesn't work there are cases where that doesn't work there are cases where that doesn't work where your mailchimp and you do want where your mailchimp and you do want where your mailchimp and you do want everyone to come in right everyone to come in right everyone to come in right you want early adopters to err you want early adopters to err you want early adopters to err people are just getting started to come people are just getting started to come people are just getting started to come in and then upgrade with you over time in and then upgrade with you over time in and then upgrade with you over time so you don't want to remove a low so you don't want to remove a low so you don't want to remove a low pricing plan but but it is one way pricing plan but but it is one way pricing plan but but it is one way last section here and i think i'm going last section here and i think i'm going last section here and i think i'm going to zip through the end of it and you'll to zip through the end of it and you'll to zip through the end of it and you'll have a bitly url that you can refer to have a bitly url that you can refer to have a bitly url that you can refer to some specific text but i'm going to talk some specific text but i'm going to talk some specific text but i'm going to talk about raising prices and the reason i am about raising prices and the reason i am about raising prices and the reason i am is because it always bothers me to hear is because it always bothers me to hear is because it always bothers me to hear someone tell me to do something and not someone tell me to do something and not someone tell me to do something and not tell me how to do it so i wanted to get tell me how to do it so i wanted to get tell me how to do it so i wanted to get something practical this is going to get something practical this is going to get something practical this is going to get like deep in the like deep in the like deep in the kind of a mental framework i have around kind of a mental framework i have around kind of a mental framework i have around raising prices again having done it raising prices again having done it raising prices again having done it well not so well having seen it done well not so well having seen it done well not so well having seen it done well not so well so well not so well so well not so well so i think we have three pieces here so the i think we have three pieces here so the i think we have three pieces here so the first thing is uh and i'll dive into first thing is uh and i'll dive into first thing is uh and i'll dive into each of these in a minute but um is to each of these in a minute but um is to each of these in a minute but um is to think about whether it's an experiment think about whether it's an experiment think about whether it's an experiment experimental raising price or a experimental raising price or a experimental raising price or a certainty i put a certainty in quotes certainty i put a certainty in quotes certainty i put a certainty in quotes because nothing's a certainty in because nothing's a certainty in because nothing's a certainty in startups right but it's like do i startups right but it's like do i startups right but it's like do i think do i want to be able to roll this think do i want to be able to roll this think do i want to be able to roll this back real fast or am i pretty certain back real fast or am i pretty certain back real fast or am i pretty certain that i'm going with this no matter what that i'm going with this no matter what that i'm going with this no matter what second thing is think about second thing is think about second thing is think about grandfathering when to do it how long to grandfathering when to do it how long to grandfathering when to do it how long to do it do it do it that kind of stuff third thing is how to that kind of stuff third thing is how to that kind of stuff third thing is how to message it well there again i've seen it message it well there again i've seen it message it well there again i've seen it done very well and that's the example done very well and that's the example done very well and that's the example i'll run through at the end i'll run through at the end i'll run through at the end so we'll start with experiment versus so we'll start with experiment versus so we'll start with experiment versus certainty certainty certainty um um um this is a lot around your founder got this is a lot around your founder got this is a lot around your founder got there were times when i raised prices there were times when i raised prices there were times when i raised prices where i knew that i didn't care if it where i knew that i didn't care if it where i knew that i didn't care if it hurt our funnel in the short term that i hurt our funnel in the short term that i hurt our funnel in the short term that i knew we had to do it and we were going

knew we had to do it and we were going knew we had to do it and we were going to raise prices and i was not going to to raise prices and i was not going to to raise prices and i was not going to roll it back like would have gone roll it back like would have gone roll it back like would have gone really far sideways for me to roll it really far sideways for me to roll it really far sideways for me to roll it back back back so so so i noticed the first question i'm going i noticed the first question i'm going i noticed the first question i'm going to get is how do you know if it's to get is how do you know if it's to get is how do you know if it's experimental certainty and experimental certainty and experimental certainty and it's usually a gut feel if you don't it's usually a gut feel if you don't it's usually a gut feel if you don't know that's probably an experiment i know that's probably an experiment i know that's probably an experiment i felt very confident about a few things felt very confident about a few things felt very confident about a few things so but here's the thing so if it's an so but here's the thing so if it's an so but here's the thing so if it's an experiment then you treat it like one experiment then you treat it like one experiment then you treat it like one you make it so it is a two-minute roll you make it so it is a two-minute roll you make it so it is a two-minute roll back right you literally change the five back right you literally change the five back right you literally change the five things they're all in one get label things they're all in one get label things they're all in one get label thing is that we call the label thing is that we call the label thing is that we call the label and you you're able to to roll it back and you you're able to to roll it back and you you're able to to roll it back very quickly very quickly very quickly and you watch it every day and you watch it every day and you watch it every day painstakingly and you see painstakingly and you see painstakingly and you see there's going to be feedback but more there's going to be feedback but more there's going to be feedback but more more importantly it's like more importantly it's like more importantly it's like what are the results right how many what are the results right how many what are the results right how many people are coming through what's your people are coming through what's your people are coming through what's your trial to paid what was your trial to pay trial to paid what was your trial to pay trial to paid what was your trial to pay the last week blah blah blah every day the last week blah blah blah every day the last week blah blah blah every day and then you give it a couple weeks and then you give it a couple weeks and then you give it a couple weeks maybe a month it's a poor maybe a month it's a poor maybe a month it's a poor you know we used to call it a poor man you know we used to call it a poor man you know we used to call it a poor man split test right split test right split test right um in a perfect world you would split um in a perfect world you would split um in a perfect world you would split test this test this test this split testing pricing very very split testing pricing very very split testing pricing very very difficult i have literally seen one difficult i have literally seen one difficult i have literally seen one company ever do this i'm sure someone company ever do this i'm sure someone company ever do this i'm sure someone else one sas company else one sas company else one sas company and i don't what i don't mean is getting and i don't what i don't mean is getting and i don't what i don't mean is getting on sales calls in the early days on sales calls in the early days on sales calls in the early days customer development and saying oh yeah customer development and saying oh yeah customer development and saying oh yeah it's 100 bucks 120 130 that's not what it's 100 bucks 120 130 that's not what it's 100 bucks 120 130 that's not what i'm talking about i'm talking about i'm talking about i'm talking about i'm talking about i'm talking about literally like on a website i have a literally like on a website i have a literally like on a website i have a decent amount of traffic and i'm going decent amount of traffic and i'm going decent amount of traffic and i'm going to split test it the only one i know to split test it the only one i know to split test it the only one i know who's done it is zapier and what they who's done it is zapier and what they who's done it is zapier and what they did if you ever want to try this i've did if you ever want to try this i've did if you ever want to try this i've never done this is that you would sign never done this is that you would sign never done this is that you would sign up and i don't think they they must not up and i don't think they they must not up and i don't think they they must not have had pricing published on their have had pricing published on their have had pricing published on their public page it was just sign up for public page it was just sign up for public page it was just sign up for zapier and when you once you got inside zapier and when you once you got inside zapier and when you once you got inside they forked you and it was only inside they forked you and it was only inside they forked you and it was only inside the app once you were logged in and that

the app once you were logged in and that the app once you were logged in and that was a way for people not to see it on was a way for people not to see it on was a way for people not to see it on the public site right so split testing's the public site right so split testing's the public site right so split testing's very difficult i wish it wasn't so very difficult i wish it wasn't so very difficult i wish it wasn't so instead i would again put it in instead i would again put it in instead i would again put it in something i can roll back pretty easy something i can roll back pretty easy something i can roll back pretty easy and i would just be monitoring and i would just be monitoring and i would just be monitoring that's if it's an experiment if it's a that's if it's an experiment if it's a that's if it's an experiment if it's a certainty quote unquote certainty quote unquote certainty quote unquote i would recommend usually it's a good i would recommend usually it's a good i would recommend usually it's a good idea to make it a marketable event idea to make it a marketable event idea to make it a marketable event meaning you announce it you pre-announce meaning you announce it you pre-announce meaning you announce it you pre-announce we're raising prices so back in when is we're raising prices so back in when is we're raising prices so back in when is this 2015 this is me again drips pricing this 2015 this is me again drips pricing this 2015 this is me again drips pricing goes up tomorrow so i owned it still goes up tomorrow so i owned it still goes up tomorrow so i owned it still then right drip spreading goes up then right drip spreading goes up then right drip spreading goes up tomorrow i was trying to figure out why tomorrow i was trying to figure out why tomorrow i was trying to figure out why i put tmrw but i think this is back when i put tmrw but i think this is back when i put tmrw but i think this is back when uh twitter what do they have 140 uh twitter what do they have 140 uh twitter what do they have 140 characters isn't that crazy so drip's characters isn't that crazy so drip's characters isn't that crazy so drip's pricing goes up tomorrow existing pricing goes up tomorrow existing pricing goes up tomorrow existing customer slash trials are grandfathered customer slash trials are grandfathered customer slash trials are grandfathered if you've considered drip now is a good if you've considered drip now is a good if you've considered drip now is a good time link to the pricing page we also time link to the pricing page we also time link to the pricing page we also emailed you know if you think about it emailed you know if you think about it emailed you know if you think about it you email all your you email all your you email all your customers and you tell them and whether customers and you tell them and whether customers and you tell them and whether they are grandfathered or not you email they are grandfathered or not you email they are grandfathered or not you email all your trial users and you say you're all your trial users and you say you're all your trial users and you say you're already in a trial but just so you know already in a trial but just so you know already in a trial but just so you know if you decide not to convert if you ever if you decide not to convert if you ever if you decide not to convert if you ever come back pricing is going to be higher come back pricing is going to be higher come back pricing is going to be higher then you email all your just your then you email all your just your then you email all your just your marketing list and you promote the hell marketing list and you promote the hell marketing list and you promote the hell out of it and you say if you're not out of it and you say if you're not out of it and you say if you're not already tr if you're trialing and drip already tr if you're trialing and drip already tr if you're trialing and drip as of tomorrow you will be at this old as of tomorrow you will be at this old as of tomorrow you will be at this old prime you know it's a marketable thing i prime you know it's a marketable thing i prime you know it's a marketable thing i learned this from dharmasha of hubspot learned this from dharmasha of hubspot learned this from dharmasha of hubspot at uh at a business software dinner he at uh at a business software dinner he at uh at a business software dinner he mentioned this i think it's a great idea mentioned this i think it's a great idea mentioned this i think it's a great idea so when we did this it's an email from so when we did this it's an email from so when we did this it's an email from me to reuben um gomez the founder of me to reuben um gomez the founder of me to reuben um gomez the founder of signwell and it basically just says we signwell and it basically just says we signwell and it basically just says we got a bunch more trials the numbers got a bunch more trials the numbers got a bunch more trials the numbers aren't that important but um i thought aren't that important but um i thought aren't that important but um i thought it was just a funny little artifact from it was just a funny little artifact from it was just a funny little artifact from six years ago six years ago six years ago grandfathering so what does that mean it

grandfathering so what does that mean it grandfathering so what does that mean it means if i'm going to raise prices on my means if i'm going to raise prices on my means if i'm going to raise prices on my pricing page what do i do with my pricing page what do i do with my pricing page what do i do with my existing customers do they keep the same existing customers do they keep the same existing customers do they keep the same pricing do i upgrade everyone how do i pricing do i upgrade everyone how do i pricing do i upgrade everyone how do i handle it handle it handle it well in a perfect world you wouldn't well in a perfect world you wouldn't well in a perfect world you wouldn't even think about it you just upgrade even think about it you just upgrade even think about it you just upgrade everyone right you'd email them and say everyone right you'd email them and say everyone right you'd email them and say hey price goes up if i have a restaurant hey price goes up if i have a restaurant hey price goes up if i have a restaurant and you eat this week and then i change and you eat this week and then i change and you eat this week and then i change my prices when you come back next week my prices when you come back next week my prices when you come back next week you don't pay the same amount right sas you don't pay the same amount right sas you don't pay the same amount right sas is different because there's some type is different because there's some type is different because there's some type of you know a little bit of a contract of you know a little bit of a contract of you know a little bit of a contract i'll say with subscriptions right so you i'll say with subscriptions right so you i'll say with subscriptions right so you have to communicate this why do we even have to communicate this why do we even have to communicate this why do we even consider grandfathering well first thing consider grandfathering well first thing consider grandfathering well first thing is because you're concerned that if you is because you're concerned that if you is because you're concerned that if you just raise prices people might churn you just raise prices people might churn you just raise prices people might churn you might find a competitor might find a competitor might find a competitor second is it might if you have thousands second is it might if you have thousands second is it might if you have thousands of customers they might write in angrily of customers they might write in angrily of customers they might write in angrily and be angry or support people and third and be angry or support people and third and be angry or support people and third is it is possible to do this so poorly i is it is possible to do this so poorly i is it is possible to do this so poorly i think many of us have seen it that you think many of us have seen it that you think many of us have seen it that you can actually damage your brand and your can actually damage your brand and your can actually damage your brand and your reputation right reputation right reputation right so so so that's the only reason to consider it that's the only reason to consider it that's the only reason to consider it and you know in my opinion if it was and you know in my opinion if it was and you know in my opinion if it was just a business concern you would just just a business concern you would just just a business concern you would just raise for everybody raise for everybody raise for everybody so i don't have a hard and fast rule but so i don't have a hard and fast rule but so i don't have a hard and fast rule but i have some i have some i have some some things here some things here some things here um um um actually i guess i do have a hard and actually i guess i do have a hard and actually i guess i do have a hard and fast rule and i literally call it rob's fast rule and i literally call it rob's fast rule and i literally call it rob's rule yeah it's like two slides from here rule yeah it's like two slides from here rule yeah it's like two slides from here i don't even think about it all right so i don't even think about it all right so i don't even think about it all right so even if you're not going to grandfather even if you're not going to grandfather even if you're not going to grandfather right and it's just like i'm gonna raise right and it's just like i'm gonna raise right and it's just like i'm gonna raise prices on everybody y'all prices on everybody y'all prices on everybody y'all i've never seen it go well if you do i've never seen it go well if you do i've never seen it go well if you do less than two months less than two months less than two months three is more comfortable in my opinion three is more comfortable in my opinion three is more comfortable in my opinion i think it's gotta be your kind of i think it's gotta be your kind of i think it's gotta be your kind of founder gut on this but i've seen three founder gut on this but i've seen three founder gut on this but i've seen three to six work like netflix does a year and to six work like netflix does a year and to six work like netflix does a year and people still get angry they get angry people still get angry they get angry people still get angry they get angry when they announce it they get angry 12 when they announce it they get angry 12 when they announce it they get angry 12 months later to me two three months is

months later to me two three months is months later to me two three months is perfectly fair six is a lot of time they perfectly fair six is a lot of time they perfectly fair six is a lot of time they forget about it and then they think forget about it and then they think forget about it and then they think you're raising again is what happens so you're raising again is what happens so you're raising again is what happens so if i'm going to not grandfather at least if i'm going to not grandfather at least if i'm going to not grandfather at least two months all right so what is my rob's two months all right so what is my rob's two months all right so what is my rob's not rule of ten not rule of ten not rule of ten rob's rule of ten rob's rule of ten rob's rule of ten if raising prices on existing customers if raising prices on existing customers if raising prices on existing customers will not grow mrr by at least 10 percent will not grow mrr by at least 10 percent will not grow mrr by at least 10 percent it is probably not even worth it is probably not even worth it is probably not even worth considering considering considering raising prices on everybody does that raising prices on everybody does that raising prices on everybody does that make sense because the idea is let's say make sense because the idea is let's say make sense because the idea is let's say i'm doing 50k mrr i'm doing 50k mrr i'm doing 50k mrr the amount of a headache the amount of the amount of a headache the amount of the amount of a headache the amount of support burden potential brand damage support burden potential brand damage support burden potential brand damage and potential churn communication is so and potential churn communication is so and potential churn communication is so onerous that if i'm gonna grow by five onerous that if i'm gonna grow by five onerous that if i'm gonna grow by five grand grand grand is it my opinion this rob's rule you can is it my opinion this rob's rule you can is it my opinion this rob's rule you can have your own role and name it too um have your own role and name it too um have your own role and name it too um is ten percent it isn't worth it now i is ten percent it isn't worth it now i is ten percent it isn't worth it now i think once you're gonna grow fifteen if think once you're gonna grow fifteen if think once you're gonna grow fifteen if i'm going to go from 50 to 57.5 that i'm going to go from 50 to 57.5 that i'm going to go from 50 to 57.5 that starts getting interesting if i'm gonna starts getting interesting if i'm gonna starts getting interesting if i'm gonna go to 50 to 60 all right maybe it's go to 50 to 60 all right maybe it's go to 50 to 60 all right maybe it's worth it right and so you have to you worth it right and so you have to you worth it right and so you have to you have your data you can see what's going have your data you can see what's going have your data you can see what's going to happen to happen to happen um um um obviously if it's five percent i mean obviously if it's five percent i mean obviously if it's five percent i mean you know again you know again you know again this is my opinion this is my opinion this is my opinion a couple tips never promised your a couple tips never promised your a couple tips never promised your grandfather for life grandfather for life grandfather for life that's the worst thing you can do that's the worst thing you can do that's the worst thing you can do because then the next time whether you because then the next time whether you because then the next time whether you sell the company or you raise prices in sell the company or you raise prices in sell the company or you raise prices in a year or two or three a year or two or three a year or two or three you may want to not grandfather that you may want to not grandfather that you may want to not grandfather that time right so just don't leave for life time right so just don't leave for life time right so just don't leave for life lifetime deals for life like that's for lifetime deals for life like that's for lifetime deals for life like that's for one-time sales stuff don't do that in one-time sales stuff don't do that in one-time sales stuff don't do that in sas because you don't know what life sas because you don't know what life sas because you don't know what life means means means final tip before we get into the final tip before we get into the final tip before we get into the messaging messaging messaging this is totally random but it's this is totally random but it's this is totally random but it's something we've realized uh enterprise something we've realized uh enterprise something we've realized uh enterprise customers if you're signing annual

customers if you're signing annual customers if you're signing annual contracts they almost expect annual contracts they almost expect annual contracts they almost expect annual increases build those into your increases build those into your increases build those into your contracts just write them in five contracts just write them in five contracts just write them in five percent ten percent is usually pretty percent ten percent is usually pretty percent ten percent is usually pretty reasonable put it in up front say it'll reasonable put it in up front say it'll reasonable put it in up front say it'll it auto renews or as we renew it'll go it auto renews or as we renew it'll go it auto renews or as we renew it'll go up seven percent up seven percent up seven percent it's pretty rare i see pushback on that it's pretty rare i see pushback on that it's pretty rare i see pushback on that that's just kind of been a standard for that's just kind of been a standard for that's just kind of been a standard for a long time all right a long time all right a long time all right last section here this is on the message last section here this is on the message last section here this is on the message so if i were to so if i were to so if i were to do it if i were to raise prices do it if i were to raise prices do it if i were to raise prices and i guess i can't cover both and i guess i can't cover both and i guess i can't cover both grandfathering and not actually grandfathering and not actually grandfathering and not actually so there's so there's so there's you've seen good like help scout did a you've seen good like help scout did a you've seen good like help scout did a really good job of this um i did a really good job of this um i did a really good job of this um i did a couple with drip that i think they went couple with drip that i think they went couple with drip that i think they went really well so it tells me they're well really well so it tells me they're well really well so it tells me they're well written but the one that i think written but the one that i think written but the one that i think codifies that codifies it all really codifies that codifies it all really codifies that codifies it all really well is jordan gaul did it with kart well is jordan gaul did it with kart well is jordan gaul did it with kart hook about a year or two ago i was hook about a year or two ago i was hook about a year or two ago i was involved in that i reviewed the draft involved in that i reviewed the draft involved in that i reviewed the draft and then when he sent it out he was and and then when he sent it out he was and and then when he sent it out he was and he was doing crazy stuff they were he was doing crazy stuff they were he was doing crazy stuff they were they raised the price a lot they added they raised the price a lot they added they raised the price a lot they added they increased a bunch of fees and they they increased a bunch of fees and they they increased a bunch of fees and they didn't do any grandfathering so they didn't do any grandfathering so they didn't do any grandfathering so they went pedal to the metal on it and it it went pedal to the metal on it and it it went pedal to the metal on it and it it made the business amazing but he had to made the business amazing but he had to made the business amazing but he had to be very be very be very very very very astute in his communication so as not to astute in his communication so as not to astute in his communication so as not to have something explode on them have something explode on them have something explode on them so so so these are there's six points and it's these are there's six points and it's these are there's six points and it's kind of that six things you should cover kind of that six things you should cover kind of that six things you should cover um now if you're if you are um now if you're if you are um now if you're if you are grandfathering it's simpler because you grandfathering it's simpler because you grandfathering it's simpler because you basically only need three of these basically only need three of these basically only need three of these you're just trying to communicate it and you're just trying to communicate it and you're just trying to communicate it and then say hey as an existing customer we then say hey as an existing customer we then say hey as an existing customer we love you and now you know you're not love you and now you know you're not love you and now you know you're not going to pay anything more thanks for going to pay anything more thanks for going to pay anything more thanks for your support right that part's easy it's your support right that part's easy it's your support right that part's easy it's easy to communicate that you need more

easy to communicate that you need more easy to communicate that you need more if you're going to be like oh by the way if you're going to be like oh by the way if you're going to be like oh by the way in three months six months you're going in three months six months you're going in three months six months you're going to be price is going to be doubled so to be price is going to be doubled so to be price is going to be doubled so first thing in your message structure first thing in your message structure first thing in your message structure and i'm gonna have an example i'm gonna and i'm gonna have an example i'm gonna and i'm gonna have an example i'm gonna pull up his thing from internet archive pull up his thing from internet archive pull up his thing from internet archive and show you but so you set the stage and show you but so you set the stage and show you but so you set the stage you basically say um you know we're you basically say um you know we're you basically say um you know we're raising prices we're cart hook we've raising prices we're cart hook we've raising prices we're cart hook we've been around for two years blah blah i been around for two years blah blah i been around for two years blah blah i kind of give some background right high kind of give some background right high kind of give some background right high level level level we're changing our pricing we're changing our pricing we're changing our pricing then give a high level justification then give a high level justification then give a high level justification this is why we're changing our pricing this is why we're changing our pricing this is why we're changing our pricing we realize we're in a completely we realize we're in a completely we realize we're in a completely different space we're not email service different space we're not email service different space we're not email service anymore we're a marketing automation anymore we're a marketing automation anymore we're a marketing automation provider um provider um provider um you know we're providing tons more value you know we're providing tons more value you know we're providing tons more value than when we started blah blah blah than when we started blah blah blah than when we started blah blah blah then a couple optional pieces you have then a couple optional pieces you have then a couple optional pieces you have more specifics about who it impacts and more specifics about who it impacts and more specifics about who it impacts and when more justification and then reach when more justification and then reach when more justification and then reach out if there's questions all right so out if there's questions all right so out if there's questions all right so again i went back through emails because again i went back through emails because again i went back through emails because i've received a bunch of these the one i've received a bunch of these the one i've received a bunch of these the one that i like the most is this one and that i like the most is this one and that i like the most is this one and it's uh it's a blog post i went to the it's uh it's a blog post i went to the it's uh it's a blog post i went to the kart hook blog and it's not there kart hook blog and it's not there kart hook blog and it's not there anymore so i went to internet anymore so i went to internet anymore so i went to internet archive wayback machine and i found it archive wayback machine and i found it archive wayback machine and i found it and i put it at this bitly url so it's and i put it at this bitly url so it's and i put it at this bitly url so it's bit.ly carthook pricing so you can go bit.ly carthook pricing so you can go bit.ly carthook pricing so you can go look at it now or later to see those six points and how he to see those six points and how he covers them and then figure out if you covers them and then figure out if you covers them and then figure out if you would like to reorder them or whatever would like to reorder them or whatever would like to reorder them or whatever so um in the interest of time because i so um in the interest of time because i so um in the interest of time because i think i'm out of time i'm just gonna think i'm out of time i'm just gonna think i'm out of time i'm just gonna kind of step through these set the stage kind of step through these set the stage kind of step through these set the stage we're changing our pricing we're changing our pricing we're changing our pricing high level justification high level justification high level justification optional more specifics optional more specifics optional more specifics and reach out with questions wait was and reach out with questions wait was and reach out with questions wait was there five yeah optional more there five yeah optional more there five yeah optional more justification reach out with questions justification reach out with questions justification reach out with questions um so that's it it's

um so that's it it's um so that's it it's pretty interesting to do something pretty interesting to do something pretty interesting to do something that's complicated and could potentially that's complicated and could potentially that's complicated and could potentially get people to flame you here's what you get people to flame you here's what you get people to flame you here's what you do do do you look at people who did it really you look at people who did it really you look at people who did it really poorly and you don't do that and then poorly and you don't do that and then poorly and you don't do that and then you look at people who did it really you look at people who did it really you look at people who did it really well and you do that and this was done well and you do that and this was done well and you do that and this was done really well really well really well so so so with that with that with that i think uh take a few questions i think uh take a few questions i think uh take a few questions thank you thank you thank you [Applause] [Applause] [Applause] you said you're gonna email all your you said you're gonna email all your you said you're gonna email all your existing customers at some point existing customers at some point existing customers at some point what if you have a customer who doesn't what if you have a customer who doesn't what if you have a customer who doesn't use your product at all based on metrics use your product at all based on metrics use your product at all based on metrics they haven't done anything in the last they haven't done anything in the last they haven't done anything in the last 24 months 24 months 24 months do you still send the email or do you do you still send the email or do you do you still send the email or do you just just just keep that silent not to wake anybody up keep that silent not to wake anybody up keep that silent not to wake anybody up i mean you're still sending them an i mean you're still sending them an i mean you're still sending them an invoice every month that's for sure i would probably email everybody but i would probably email everybody but it's it's up to you i suppose i never it's it's up to you i suppose i never it's it's up to you i suppose i never liked i didn't like having zombie liked i didn't like having zombie liked i didn't like having zombie customers customers customers um um um a lot of the fact is a lot of the fact is a lot of the fact is what is it one it depends on the space what is it one it depends on the space what is it one it depends on the space but like between 15 and 35 percent of but like between 15 and 35 percent of but like between 15 and 35 percent of sas customers or zombie customers sas customers or zombie customers sas customers or zombie customers depending on the market marketing auto depending on the market marketing auto depending on the market marketing auto and not marketing automation and not marketing automation and not marketing automation high pressure marketing tools have high pressure marketing tools have high pressure marketing tools have are like a third to forty percent of are like a third to forty percent of are like a third to forty percent of their customers already zombies so um i their customers already zombies so um i their customers already zombies so um i hear what you're saying hear what you're saying hear what you're saying i don't know it's your call i don't know it's your call i don't know it's your call i would probably email everybody but i'm i would probably email everybody but i'm i would probably email everybody but i'm not saying everyone in here should use not saying everyone in here should use not saying everyone in here should use user judgment you know user judgment you know user judgment you know it's the same yeah we would email it's the same yeah we would email it's the same yeah we would email we would have customers not using the we would have customers not using the we would have customers not using the app every month we'd email everybody app every month we'd email everybody app every month we'd email everybody with you just got charged here's an

with you just got charged here's an with you just got charged here's an invoice so it's not as if they hadn't invoice so it's not as if they hadn't invoice so it's not as if they hadn't heard from us for a year if they weren't heard from us for a year if they weren't heard from us for a year if they weren't using it they were still getting an using it they were still getting an using it they were still getting an invoice every invoice every invoice every every month every month every month hi rob um hi rob um hi rob um very interesting data points on the on very interesting data points on the on very interesting data points on the on the slides i've got what's your take on the slides i've got what's your take on the slides i've got what's your take on last year where there's very big gap last year where there's very big gap last year where there's very big gap between each tier versus one there or between each tier versus one there or between each tier versus one there or it's more incremental let's say 29 49 69 it's more incremental let's say 29 49 69 it's more incremental let's say 29 49 69 and all right versus like 29 and a and all right versus like 29 and a and all right versus like 29 and a thousand yeah right something like that thousand yeah right something like that thousand yeah right something like that so i've seen some folks do that i've so i've seen some folks do that i've so i've seen some folks do that i've actually seen actually seen actually seen i mean like reddit redis is it called no i mean like reddit redis is it called no i mean like reddit redis is it called no no is it redis no it's sidekick which is no is it redis no it's sidekick which is no is it redis no it's sidekick which is a runs on reddit sorry sidekick is open a runs on reddit sorry sidekick is open a runs on reddit sorry sidekick is open source so it's free and then it's a source so it's free and then it's a source so it's free and then it's a thousand dollars a year which i guess thousand dollars a year which i guess thousand dollars a year which i guess isn't that bad but um because they isn't that bad but um because they isn't that bad but um because they that's their model right and then we that's their model right and then we that's their model right and then we were using a tool at one point that was were using a tool at one point that was were using a tool at one point that was like that it was like like that it was like like that it was like free to try or 50 bucks a month and it free to try or 50 bucks a month and it free to try or 50 bucks a month and it was a thousand or more a month was a thousand or more a month was a thousand or more a month i think that um when i saw that i said these people when i saw that i said these people really know their customers if that's really know their customers if that's really know their customers if that's working working working that's genius like that's a great way to that's genius like that's a great way to that's genius like that's a great way to do it right we talk about dual i talk do it right we talk about dual i talk do it right we talk about dual i talk about dual funnels all the time where about dual funnels all the time where about dual funnels all the time where it's like it's like it's like having a bunch of having a bunch of having a bunch of ten dollar customers you can imagine ten dollar customers you can imagine ten dollar customers you can imagine squad cast has like you know once ten squad cast has like you know once ten squad cast has like you know once ten dollar customers and uh uh then has a dollar customers and uh uh then has a dollar customers and uh uh then has a bunch of customers paying them thousands bunch of customers paying them thousands bunch of customers paying them thousands a month like that's actually a really a month like that's actually a really a month like that's actually a really interesting model i like the idea of having more graduated i like the idea of having more graduated um but i think it would i'd probably

um but i think it would i'd probably um but i think it would i'd probably have to sit down case by case you know have to sit down case by case you know have to sit down case by case you know what i mean i think customers will what i mean i think customers will what i mean i think customers will complain as what'll happen and you'll complain as what'll happen and you'll complain as what'll happen and you'll have to figure out if that's worth it have to figure out if that's worth it have to figure out if that's worth it and if the customers who complain are and if the customers who complain are and if the customers who complain are the ones that aren't going to pay you the ones that aren't going to pay you the ones that aren't going to pay you much much much or or or if the customers who complain actually if the customers who complain actually if the customers who complain actually have a point have a point have a point so that's the hard part to suss out so that's the hard part to suss out so that's the hard part to suss out anymore yeah hi rob thanks for the talk anymore yeah hi rob thanks for the talk anymore yeah hi rob thanks for the talk sure um i wanted to hear your comments sure um i wanted to hear your comments sure um i wanted to hear your comments about um about um about um monthly versus annual um monthly versus annual um monthly versus annual um as a as a lever to increase the revenue as a as a lever to increase the revenue as a as a lever to increase the revenue because on one side you are losing because on one side you are losing because on one side you are losing on revenue per customer basis because on revenue per customer basis because on revenue per customer basis because you usually discount and on the other you usually discount and on the other you usually discount and on the other side usually you also reduce your churns side usually you also reduce your churns side usually you also reduce your churns substantially right so what's your substantially right so what's your substantially right so what's your comment on that uh that strategy i love comment on that uh that strategy i love comment on that uh that strategy i love annual i wish i could sell all of mine annual i wish i could sell all of mine annual i wish i could sell all of mine even at a 16 discount or whatever it even at a 16 discount or whatever it even at a 16 discount or whatever it went you know if you give two months went you know if you give two months went you know if you give two months free it's 16.7 free it's 16.7 free it's 16.7 i get my money now i get 10 months of i get my money now i get 10 months of i get my money now i get 10 months of revenue so suddenly my cost to acquire revenue so suddenly my cost to acquire revenue so suddenly my cost to acquire is negative right let's say i paid 500 is negative right let's say i paid 500 is negative right let's say i paid 500 bucks and i get a thousand over you know bucks and i get a thousand over you know bucks and i get a thousand over you know for 10 months i literally just made 500 for 10 months i literally just made 500 for 10 months i literally just made 500 instantly now i can go acquire another instantly now i can go acquire another instantly now i can go acquire another customer that's how you build an customer that's how you build an customer that's how you build an incredible thing so incredible thing so incredible thing so i like annual eff because like you said i like annual eff because like you said i like annual eff because like you said churn goes down more money now as a churn goes down more money now as a churn goes down more money now as a bootstrapper right and we need more bootstrapper right and we need more bootstrapper right and we need more money now money now money now so so so good question good question good question yeah what else yeah what else yeah what else um so i'm curious like have you seen um so i'm curious like have you seen um so i'm curious like have you seen good examples of good examples of good examples of free to paid like where people just say free to paid like where people just say free to paid like where people just say no more free no more free no more free you all have to pay kill a free plan you all have to pay kill a free plan you all have to pay kill a free plan yeah i've done it i did it i acquired yeah i've done it i did it i acquired yeah i've done it i did it i acquired hit tail and i had a free plan and i

hit tail and i had a free plan and i hit tail and i had a free plan and i killed it um and it was on a smaller killed it um and it was on a smaller killed it um and it was on a smaller scale right i mean it was a scale right i mean it was a scale right i mean it was a 500 for you and that's not true there 500 for you and that's not true there 500 for you and that's not true there were 1500 free users at the time were 1500 free users at the time were 1500 free users at the time um um um yes i have so much like i said dropping yes i have so much like i said dropping yes i have so much like i said dropping your lowest pricing plan you know can your lowest pricing plan you know can your lowest pricing plan you know can increase your average revenue per increase your average revenue per increase your average revenue per customer um dropping a free plan can as customer um dropping a free plan can as customer um dropping a free plan can as well well well i i i a lot of companies you see try that you a lot of companies you see try that you a lot of companies you see try that you that we see try free they don't do it that we see try free they don't do it that we see try free they don't do it forever because they do realize it forever because they do realize it forever because they do realize it doesn't work you know i think the doesn't work you know i think the doesn't work you know i think the challenge then is if you drop it challenge then is if you drop it challenge then is if you drop it do your grandfather or not right and i do your grandfather or not right and i do your grandfather or not right and i think in most cases you do because think in most cases you do because think in most cases you do because probably it's not worth it if you have probably it's not worth it if you have probably it's not worth it if you have thousands of free users what are they thousands of free users what are they thousands of free users what are they going to upgrade to your 29 plan again going to upgrade to your 29 plan again going to upgrade to your 29 plan again it comes back to the rule of ten like if it comes back to the rule of ten like if it comes back to the rule of ten like if i'm not gonna you know get get folks out i'm not gonna you know get get folks out i'm not gonna you know get get folks out of uh of uh of uh into the several thousands of revenue or into the several thousands of revenue or into the several thousands of revenue or tens of thousands is probably not worth tens of thousands is probably not worth tens of thousands is probably not worth it when i killed their free plan it had it when i killed their free plan it had it when i killed their free plan it had been around for five years i mean since been around for five years i mean since been around for five years i mean since the app started so the app started so the app started so um i basically the service wasn't um i basically the service wasn't um i basically the service wasn't solvent with the free plan like it was solvent with the free plan like it was solvent with the free plan like it was it was losing money and so i did wind up it was losing money and so i did wind up it was losing money and so i did wind up there were a few folks who like one guy there were a few folks who like one guy there were a few folks who like one guy was a was a was a professor there were exceptions i'll professor there were exceptions i'll professor there were exceptions i'll just say where they were like look i've just say where they were like look i've just say where they were like look i've been on the free plan since the been on the free plan since the been on the free plan since the beginning blah blah blah and i was like beginning blah blah blah and i was like beginning blah blah blah and i was like great you're comped your copter great you're comped your copter great you're comped your copter comptromp you know and then for the rest comptromp you know and then for the rest comptromp you know and then for the rest of them it really pulled the reduced the of them it really pulled the reduced the of them it really pulled the reduced the load on the server load on the server load on the server so so so that could be a whole talk right there that could be a whole talk right there that could be a whole talk right there hey rob um hey rob um hey rob um over the years you probably saw a lot of over the years you probably saw a lot of over the years you probably saw a lot of price increases and also probably some price increases and also probably some price increases and also probably some bad ones what was the worst one you saw what are you laughing at

what are you laughing at um um um i'll give you the factors that i saw in i'll give you the factors that i saw in i'll give you the factors that i saw in the worst one it was breaking it broke the worst one it was breaking it broke the worst one it was breaking it broke all the rules that i just said all the rules that i just said all the rules that i just said two weeks notice two weeks notice two weeks notice i think they said in two weeks your i think they said in two weeks your i think they said in two weeks your pricing's going up and i think it was pricing's going up and i think it was pricing's going up and i think it was like doubling like doubling like doubling and the email itself wasn't actually and the email itself wasn't actually and the email itself wasn't actually that clear about what your new price was that clear about what your new price was that clear about what your new price was gonna be gonna be gonna be and and and it it it didn't do any of the justification it didn't do any of the justification it didn't do any of the justification it didn't say what it was like because didn't say what it was like because didn't say what it was like because right it didn't say because we built right it didn't say because we built right it didn't say because we built these features and this is what we're these features and this is what we're these features and this is what we're gonna do and a commitment like if you gonna do and a commitment like if you gonna do and a commitment like if you read jordan's thing it's like here's our read jordan's thing it's like here's our read jordan's thing it's like here's our commitment jordan commitment jordan commitment jordan grandfathered for six months i think grandfathered for six months i think grandfathered for six months i think through the black friday season because through the black friday season because through the black friday season because it was e-commerce right and then he said it was e-commerce right and then he said it was e-commerce right and then he said here's my commitment here's my commitment here's my commitment we have to we got to building the we have to we got to building the we have to we got to building the features and doing a good enough job for features and doing a good enough job for features and doing a good enough job for you that you don't churn you can go you that you don't churn you can go you that you don't churn you can go anywhere i love that communication he anywhere i love that communication he anywhere i love that communication he was he wasn't acting like they're was he wasn't acting like they're was he wasn't acting like they're prisoners he was saying you can go prisoners he was saying you can go prisoners he was saying you can go anywhere and so i have to earn this from anywhere and so i have to earn this from anywhere and so i have to earn this from you now over the next six months so that you now over the next six months so that you now over the next six months so that in january when it comes time that you in january when it comes time that you in january when it comes time that you don't go to one of our competitors right don't go to one of our competitors right don't go to one of our competitors right and uh and uh and uh if you don't do that it can go poorly so if you don't do that it can go poorly so if you don't do that it can go poorly so not grandfathering and that's the thing not grandfathering and that's the thing not grandfathering and that's the thing so you know you will see people some so you know you will see people some so you know you will see people some people say you should always grandfather people say you should always grandfather people say you should always grandfather forever always always in all caps or you forever always always in all caps or you forever always always in all caps or you should never i don't hear many people should never i don't hear many people should never i don't hear many people actually if most developers in this room actually if most developers in this room actually if most developers in this room would probably say well we should always would probably say well we should always would probably say well we should always grandfather and most salespeople would grandfather and most salespeople would grandfather and most salespeople would probably say we should not grandfather probably say we should not grandfather probably say we should not grandfather right it's the business sides of it right it's the business sides of it right it's the business sides of it there are two sides there's nuance to it there are two sides there's nuance to it there are two sides there's nuance to it i honestly believe if you really take a i honestly believe if you really take a i honestly believe if you really take a look at it so look at it so look at it so uh do you have any thoughts on add-ons uh do you have any thoughts on add-ons uh do you have any thoughts on add-ons and when it makes sense to like feature and when it makes sense to like feature and when it makes sense to like feature game with an add-on rather than game with an add-on rather than game with an add-on rather than including in a higher priced here

including in a higher priced here including in a higher priced here i do i do i do um um um this one's tough and this one's tough and this one's tough and i have thoughts on it i have thoughts on it i have thoughts on it but it's all i don't have a framework but it's all i don't have a framework but it's all i don't have a framework around it i don't have general thoughts around it i don't have general thoughts around it i don't have general thoughts if that makes sense yet i've had if that makes sense yet i've had if that makes sense yet i've had probably three of these conversations probably three of these conversations probably three of these conversations around it in the past couple months around it in the past couple months around it in the past couple months and each time i'm still thinking through and each time i'm still thinking through and each time i'm still thinking through what are the criteria i don't have the what are the criteria i don't have the what are the criteria i don't have the criterion bulleted list in my head yeah criterion bulleted list in my head yeah criterion bulleted list in my head yeah does that make sense so yeah i do think does that make sense so yeah i do think does that make sense so yeah i do think there's a right time to do add-ons there's a right time to do add-ons there's a right time to do add-ons versus tears versus tears versus tears i just i'm not there yet with a good i just i'm not there yet with a good i just i'm not there yet with a good like a good generalized answer but i like a good generalized answer but i like a good generalized answer but i have made specific you know in these have made specific you know in these have made specific you know in these instances i was like that's why i work instances i was like that's why i work instances i was like that's why i work or that's what you should do and now i'm or that's what you should do and now i'm or that's what you should do and now i'm trying to reverse engineer that thought trying to reverse engineer that thought trying to reverse engineer that thought process still [Music] [Music] [Applause] [Applause] [Applause] [Music] [Music] [Music] you