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SaaS Authors: Liz McMillan, Pat Romanski, Mehdi Daoudi, Elizabeth White, Rajeev Gupta

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The Price Is Right: And for Early-Stage SaaS Companies, It Needs to Be

maxkatz:

A good article on pricing for SaaS companies.

Originally posted on Andreessen Horowitz:

Nothing is more critical to a software-as-a-service (SaaS) business than pricing strategy. Pricing is the moment of truth for a new product … and doubly so when it is a company’s first product. But far more often than not, I’ve observed new startups leaving “money on the table” when it comes to pricing enterprise products. I’ve seen founders say their product saves hundreds of thousands of dollars — yet their product is priced as if only saving thousands of dollars.

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image: Andreessen Horowitz

One reason for this is assuming the need to price and program similarly to competitive products. With a potentially disruptive product, however, falling into the trap of pricing like a legacy competitor not only leaves money on the table — but it could fail to surface your differentiation.

Said another way, your product is your price and how you price your product reflects value from the buyer…

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More Stories By Max Katz

Max Katz heads Developer Relations for Appery.io, a cloud-based mobile app platform. He loves trying out new and cool REST APIs in mobile apps. Max is the author of two books “Practical RichFaces” (Apress 2008, 2011), DZone MVB (Most Valuable Blogger), and is a frequent speaker at developer conferences. You can find out what Max is up to on his blog: http://maxkatz.org and Twitter: @maxkatz.