
Why we raised our SaaS prices - pjlegato
https://medium.com/@DatabaseLabs/why-we-raised-our-saas-prices-70831fc53c15
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gregdrm
Interesting. "Customer acquisition is irrationally expensive" is true, but
partly driven up by the Ubers and Paypals of the world buying customers

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pjlegato
Exactly. They have a huge VC war chest, and they deliberately set out to lose
money on every sale for years, just to gain market share, in the hopes that
their competitors will go out of business before they run out of money.

Of course, the competitors also mostly have huge VC war chests, so an arms
race develops..

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tiffanyh
Basecamp also just raised their prices from $29 [1] to $99 [2] in the past
week.

Fun factoid, they are now annoucing how many paying customers they have.
Apparently they have 100,000 paying companies using basecamp and 2.2m
accounts. [3]

Makes it fun to guess their annual revenue now given these data points.

[1]
[https://web.archive.org/web/20160617192441/https://basecamp....](https://web.archive.org/web/20160617192441/https://basecamp.com/3/pricing)

[2] [https://basecamp.com/signup](https://basecamp.com/signup)

[3] [https://basecamp.com/](https://basecamp.com/)

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mamurphy
I didn't learn anything of note from the article after the three summary
bullet point paragraphs (Users are mostly price insensitive, User acquisition
costs are high, Good tech support costs a lot of money).

I would tend to think that the first reason - the demand side factor of
("users don't care much about price") is the best reason for keeping a higher
price - the market will bear a higher price.

Supply side factors ("costs are high, therefore lets raise prices") do not
seem sustainable in the long term. They're a good reason to try raising
prices, since without them the business would be unsustainable. But if the
market won't bear a price above your costs, then it's an indication that you
must lower costs (e.g., reducing support) or close down, not that you've
gotten the pricing wrong.

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pjlegato
The part about costs was not in the article... the old, lower prices, were
already well above our costs. Now they're even higher than our costs.

