
Kalzumeus (patio11) Podcast Ep. 2 with Amy Hoy: Pricing, Products, And Passion - Smerity
http://www.kalzumeus.com/2012/05/18/kalzumeus-podcast-ep-2-with-amy-hoy-pricing-products-and-passion/
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glimcat
Amy has lots of good points, but I'm of the opinion that her "$30x500" premise
for building a SaaS ISV is backwards. You're often better off targeting
"$500x30" instead.

* Most every place that publishes stats has shown that the higher-tier plans account for the lion's share of revenue.

* A good programmer values out at $20,000/mo or above. It is not hard to create $500/mo in value (~ half-time minimum wage!) on an ongoing basis. All you have to do is step away from the computer and start talking to real people who fit your target personna.

* With the reversed formula, you can get your first few customers by cold-calling and face-to-face sales if you have to. Ramen profitable is in the neighborhood of _five_ customers, instead of over eighty.

* You can always backfill to a smaller plan if necessary. Even targeting $100/mo makes it far easier to get initial traction.

Don't make your main target the price-conscious end of the market!

~~~
sreitshamer
$30 is a no-brainer that you put on the credit card. Higher price points might
be more difficult for people to get approval for.

~~~
chc
The businesses you want to do business with (e.g. not lemonade stands) aren't
even capable of differentiating price points $500 and under. Like, almost
literally, you can give a number in that range and they'll just hear "pocket
lint."

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Smerity
I posted this primarily as I didn't even know this podcast existed and this
new episode was released recently and wasn't posted to HN (according to HN's
dupe detection and my recollection of recent stories).

Of course, this is selfish as well -- the more exposure and fanfare it gets
the more likely it is that there will be more episodes ;)

If you like this, I'd also highly suggest TechZing with Justin Vincent & Jason
Roberts at techzinglive.com. TechZing has had patio11 and Amy Hoy on in [1],
patio11 in [2] and Amy Hoy in [3]

[1]: [http://techzinglive.com/page/683/111-tz-panel-amy-hoy-
patric...](http://techzinglive.com/page/683/111-tz-panel-amy-hoy-patrick-
mckenzie)

[2]: [http://techzinglive.com/page/479/79-tz-
interview-%E2%80%93-p...](http://techzinglive.com/page/479/79-tz-
interview-%E2%80%93-patrick-mckenzie-optimize-this)

[3]: [http://techzinglive.com/page/563/94-tz-interview-amy-hoy-
how...](http://techzinglive.com/page/563/94-tz-interview-amy-hoy-how-to-build-
a-product-empire)

~~~
harisenbon
It was posted to HN a while ago (I think patrick did), but it didn't stay up
for long.

Thanks for posting it though -- I think it was much more informative than our
first podcast, as we're slowing getting the hang of them. Amy Hoy was a great
guest, and we were really glad to have her on the show.

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yewweitan
Lots of great points, and I love the fact that there is a full transcript.
Personally, reading the transcript, noting the important parts, then listening
for other contextual cues in which the point was made adds another dimension
to these podcasts.

Just as an example from this podcast, the points about Recurring Payment
pricing strategies were extremely helpful. It immediately struck with me
because:

(a) Recurring Payments are awesome! (profit wise) (b) They are Hell to setup
for anyone outside the US

US companies have awesome companies like Stripe, Braintree, etc... as a
Singapore Pte Ltd, the only 2 choices were Paypal or WorldPay. We chose the
latter, and while their Customer Service was good, the technical details
absolutely sucked.

Anyway, the point is that Patrick being in Japan and facing the same issues
(he uses Recurly + Paypal), was a good personal reminder for the issues facing
a small startup.

Maybe a profit opportunity? Well, at least it would make a good blog post.

~~~
bromley
My company is based in the UK, and FastSpring has so far been working very
well for our recurring billing.

I think you're only very limited if you're selling subscription products with
such low margins that paying 6% or so to a reseller is a significant problem.
A good reseller like FastSpring makes recurring billing much easier by
handling tax, invoices, cancelled cards, PCI compliance, and by simplifying
your accounting as you only have one customer (them).

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tar
Thanks for doing these! These podcasts are incredibly helpful for almost any
HN reader.

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brentlee
Make a couple dollars and you all the sudden think you have all the answers.
Worthless.

