Is it bending backwards though? The problem is that saas solutions scale in cost as well, so when you grow you pay more. For a small startup, there is always a cut off where the price of the saas service(s) explode well over the utility but you are hooked and you can afford it now. But should you? Personally I enjoy profits and more profits are better. I cannot accept using tools that I don’t really need, but, at success time, I cannot really get rid off anymore easily. And then suddenly that $10/mo is $23k/mo and I knew that when I integrated it in the first place, but thought it will save me 2 hours per year. And the new price utility is not suddenly saving me 100 or more hours a year; more like 4 hours.
I don’t doubt it’s possible, but I would love an example of a Saas product that successfully scales pricing from $10/m to $23,000/m on customer segments that aren’t enterprise-scale and has the kind of lock-in you describe.
I ask because I would like to quit my job and build a competitor ASAP.
Also, the problem isn’t the potential cost down the road. If you’re scaling on any Saas product to the $23k/m tier, then congrats, you’ve made it!
The problem is, there’s a 90%+ chance all your cost optimizing upfront was a giant waste of time, because a vast majority of startups don’t work out. And the ones that do often pivot.
Two things: the first is that it's easier to estimate costs with services like 1P due to it being mostly static, unlike other services where costs are quite dynamic ranging from different factors like usage and hours spent. The second is that once you reach that scale (more than 10 members), your costs are so large on personnel alone that $10/person is an absurdity to be frugal about when it can save you time.
If you have employees, you’re paying hundreds of thousands of dollars per year for them. Paying an extra $10/m to save 2 hours of their time is still a profitable trade.
