In today’s episode of The Startup Chat, Steli and Hiten talk about a new pricing trend in the startup world.
There’s a new trend in the startup world when it comes to pricing. Some companies are beginning to offer custom prices to customers who meet certain criteria. This is in particularly common with larger companies like HubSpot or Intercom.
In this episode, Steli and Hiten share their thoughts on these new pricing trends, why some companies started offering them if you should implement it in your startup and much more.
Time Stamped Show Notes:
00:00 About the topic of today’s episode
00:46 Why this topic was chosen.
01:49 Some examples of these new pricing trend being used today.
02:34 For the longest time, startups and servicing other startups wasn’t really a markets
02:43 Why this trend started.
03:22 Examples of why this trend started.
05:29 How larger startups started this trend.
05:50 If smaller startups copy this trend.
06:32 Why you should should go directly after the type of customer you want.
05:23 Why you should ask yourself why companies do something before implementing the same for your company.
3 Key Points:
Some of these companies I think are trying to attract the smaller customers without cannibalizing their core business.
I think you should think through whether or not you want a customer and what pricing structure will work for them right now.
If you want that type of customer, just go get them directly.
[0:00:01]Steli Efti: Hey, everybody. This is Steli Efti.
Hiten Shah: And this is Hiten Shah. Today on the Startup Chat, we're going to talk about a new trend that Steli mentioned and I've noticed as well when it comes to pricing. You want to break it down, Steli?
Steli Efti: Yeah, I don't even know what to call this. Let's just call it, you know, let's maybe say customized packages or startup packages. So in pricing tiers there's been this idea for a long time that's been around, which was like kind of a startup plan or a super low entry plan, either a very cheap plan, or very limited plan for people that are individual users maybe. Or very, very early on, so very small budget, but you want to kind of get them into using your product in the early days. That's been around for a long time, but something that I've seen trending up, especially in SAS lately, has been these kind of startup packages or startup packages where a company will create a specific landing page for this. Sometimes it's not even on their pricing page. Sometimes it's kind of hidden, but they'll have a full fledged kind of landing page around that and as a good example, they'll have like the startup package and it's like this massive discount for a number of seeds, maybe five seeds, you know, 60 percent discounted, but they'll have a bunch of kind of criteria to qualify for it. You'll have to apply, which is a new thing, right? You'll have to like fill out a form and full fledge apply to qualify for the starter or the startup package. And some of them will have criteria like you have to be part of an incubator or you have to raise VC funding. You'll have to have revenue less than a million. You have to have less than 20 employees. And then if you hit all these criteria, we'll give you this massive discounted package, but you have to prepay for a whole year. So you have to pay like whatever, $400 bucks and you get like five seeds for a whole year that would have cost you whatever, two k or something. And I found this super interesting, like this is kind of a very customized package that customers or prospects have to fill out a form and apply for and qualify for.
Hiten Shah: They have to earn it.
Steli Efti: They have to earn it and it's very manual, it seems like,