Please take this as constructive: I pay for your system for a team of about 10 people. It works and it's been useful to us - but as soon as I get some free time I'm very likely going to roll my own, because I slightly resent the $5 per user per month price-tag for such a simple service; I think it's pretty expensive for the features compared to other single-purpose cloud tools.
I'm not asking for more features, because I like the fact it does one thing and does it well. I reckon it's probably a fair price around $1-$2 per user per month. I can't help but think you'd get more revenue overall with a lower price-tag.
Dear iDoneThis team - do NOT lower your prices [1].
As a fellow subscription revenue biz, we've found that lower priced plans invite customers whose support requirements are much greater. And you won't make it up in volume.
Real businesses that value their time will spent $50/month for a service that saves them time without thinking twice. Your early traction proves this out.
The graphic you had in your post about developer thinking makes me think you guys already know this, but I see the lower price advice a lot on HN, and almost always, I think it is the wrong advice.
[1] - This is obviously 100% opinion, and you know your business 1000x better than I do. BTW, our product's subscription price point is significantly higher $12k per annum at the low end, and we just moved this up from $7500 earlier this year. BEST DECISION WE EVER MADE.
I think it's hard to group all "subscription services" into the same bucket. Selling proprietary data in the financial services market (like CB Insights) is very different from selling a simple tool (like iDoneThis).
Also, it should be noted that price is just one component of a pricing model. If you don't look at how you charge, and only consider how much you charge, chances are you're not going to maximize revenue.
$5/user/month looks good on paper, but I wouldn't necessarily assume that the perceived value scales with a flat-fee-per-user (no tiers) model. Example:
1. If my company has 10 people, sending iDoneThis $50 each month probably isn't a big deal.
2. If my company has 10 teams of 10 people, iDoneThis is now a $500/month expense. That's $6,000/year. I might not dispute that there's value to the service, but my perception and consideration of its value is likely to change as the total cost increases.
If your company has 10 teams of 10 people, your most important action is not saving $500 a month. You're (hopefully) earning a proportionally higher amount for your 100 people and you should continue to focus on that. If the software stack helps, don't fiddle with it to save a few bucks.
The challenge for iDoneThis is not to make it cheaper per user, it's to re-invest the highish costs in order to beat the competitor who is charging 50c per user. Make iDoneThis better at managing the ever-growing complexities of syncing information when you have 100/1000/10k staff members and you have no damned idea what they're doing.
Especially because quite a few hackers are thinking "you know, I could make that app and sell it for a few bucks less." Don't race them to the bottom, because Twitter is at the bottom at $0p/m.
> If your company has 10 teams of 10 people, your most important action is not saving $500 a month. You're (hopefully) earning a proportionally higher amount for your 100 people and you should continue to focus on that. If the software stack helps, don't fiddle with it to save a few bucks.
This type of thinking is prevalent on HN, but it's not always realistic. Most companies of a certain size have financial controls, and even if $500/month is not a lot of money in a relative sense, the number of $500/month line items for nice-to-have, this-helps-a-little products and services is reasonably limited.
Getting a budget for something that isn't in a "checklist cost" category can be a real headache, every vendor relationship has overhead, and instituting a new SaaS for 100 people (and getting them to actually use it) may have its own costs (staff time, etc.).
> Make iDoneThis better at managing the ever-growing complexities of syncing information when you have 100/1000/10k staff members and you have no damned idea what they're doing.
That's a fundamentally different product than what iDoneThis has today. To support development of that product, it will need substantially more than $1,000/month in recurring revenue, or it will need additional funding.
> Especially because quite a few hackers are thinking "you know, I could make that app and sell it for a few bucks less." Don't race them to the bottom, because Twitter is at the bottom at $0p/m.
If you build a business around a simple concept that requires limited functionality, you can refuse to engage in a race to the bottom, but it doesn't change the fact that you will almost certainly be undercut if others see a worthwhile opportunity.
In other words, iDoneThis can keep its $5/user/month price point, but if this is an appealing enough concept, it will have competition, and cheaper competition, before it ever obtains enough revenue to "re-invest the highish costs" as you have suggested.
Seconding this. In consulting or SAAS work I've done, the trend has been the same: low priced customers generate the highest levels of support, send the largest amount of unreasonable requests, and produce the most headaches.
None of this is a dig at the grandparent comment. Just a general tendency. Produce something of value, and people will pay and be glad to do it. The whiners will go elsewhere and you'll be better for it. (again, NOT a dig at the grandparent. There's an actual class of whiny users that vanishes when your don't pander to them)
With all due respect to louthy, making a decision to lower your prices based on the notion that a customer finds it to be a good use of their time to save $600 / year to build a copy of your service indicates that the amount of time it takes him to build it is worth less than $600.
If I were him, I wouldn't worry about 1 customer saying they'll build their own. My coworker (a PM, no less) decided, rather than Solr or ElasticSearch, to write his own search engine for a work project. He did it, and it obviously took 10 times longer than estimated and cost way more than was necessary. There will always be a proportion of customers who want it cheaper, but that doesn't mean you're priced wrong: it means they're not measuring value accurately.
For a good engineer, 600 dollars gets you something between 10 and 20 hours of work. To produce a polished project, start to finish, that's not going to happen.
'Less than $600 a year' is different to 'less than $600'.
If you plan to use it for 4 years (assuming team size remains constant), that's a potential saving of $2400.
I second the notion to not decrease your prices. There may be a few people that have the time and are willing to produce their own alternative product, but iDoneThis is definitely worth the cost (probably even more).
As with many subscription products, I feel that iDoneThis will become the product that business owners get used to paying each month.
Google has their own similar internal software called Snippets that instead of nightly sends out an email once a week, collects responses and sends out a digest along with a web app interface
some former google engineer rolled out an open source version of the software that with some factoring, nightly cron jobs instead of weekly and potentially a cleaner user interface for the web app could prolly fit your needs
FWIW, I've used http://www.snptz.com/ off and on since it debuted on HN some years ago for weekly snippets.
I've since developed my own daily forward-looking/backward-looking format, essentially a simple text-based mashup of David Seah's inspiring productivity forms:
http://weekdone.com/ is a service allowing this via web, mobile and e-mail as well. There's even a Google Snippets template.
(disclosure: I am a co-founder at Weekdone).
I can see both sides of this. Perhaps a solution is idonethis not charging per-user? $10/mo for a small team seems fine. $50/mo for a small 10-person business would certainly put me off if I had a team that size. $20/mo would compare more favourably.
As a point of comparison, I pay $600/yr (same amount @louthy pays for idonethis) for Xero which is my accounting system. It does reconciliation for multiple banks accounts, statements and invoicing with templates, handles payroll for up to 20 staff at that account level, enables remote and auditable participation from my bookkeeper and accountant, has extensive reporting, etc. I could not build even a simple replacement for all that functionality for less than a few years worth of $600/yr in time.
Your time must not be worth very much if you're really considering rolling your own. How long will it take you? A day? You might think so, but no. A weekend? Possibly, but you won't handle all of the corner cases. A week? Getting closer. How much would you pay yourself for a week of work?
I had the idea to build something very similar, but hoped to find a pre-existing solution. When I found idonethis, I found the cost prohibitive, so I built it myself.
It took me about a week, so that's fair, but that's to rebuild not just the core functionality, but also the multi-tenant SaaS part.
I have a 50 person team. So, I would've paid $250/mo, or $3k/year. So, I really invested $2k to develop my own version, which also has the potential to make money if people prefer paying $15 for a team of unlimited users.
So, no, I didn't find that a waste of time. Plus, I learned some new things along the way, and can fine tune the app as I see fit.
This is the risk of building a business around simple, contained functionality. They're easy to clone, and you better get the execution and pricing right, and figure out how to expand on the concept, or you'll be commoditized quickly.
I love that you displayed your "innovation accounting" here. I'm wondering, how do you account for ongoing cost for maintaining/updating the software? I've never seen software that didn't require some TLC over time...
I think a much better solution would be to not charge per user, and to make it tiered. This is the type of thing that could be useful to teams of different sizes, but it doesn't add more value for more users really. Paying $25 a month for 5 users seems ok. Paying $100 a month for 20 users seems absurd.
Just do 3 tiers for like 1-5, 5-20, > 20 users on the order of $19, $29, $49 or something.
If you have twenty users for this system, it is likely that "you" pay more than $50,000 every other Friday. (Substantially more if they're techies.) I say "you" in scare quotes because much like software payroll just comes out of a budget and isn't "your" money -- spend it or don't spend it, your call, but either way it isn't in your pocket. Your personal financial situation is influenced in a much sharper degree by whether your unit actually accomplishes business goals or not.
If you have 20 employees, many, many, MANY things with less certain value than this software cost you more than $100. Many of them are just costs of doing business which you ignore because $100 is chicken feed and moves no needle at the business.
> If you have 20 employees, many, many, MANY things with less certain value than this software cost you more than $100.
It seems like you're arguing that if you have 20 employees, you're probably wasting more than $100/month on other products and services, so spending another $100/month on iDoneThis isn't a big deal.
You might be right in certain cases. Some companies have tighter financial controls and are more thoughtful about managing expenses than others. But as valuable as it might be, iDoneThis is very limited in scope and, perhaps more importantly, is not a "checklist cost" that companies (justified or not) expect to have each month. As such, I think it's very precarious for iDoneThis to depend on the old "companies waste more money on other stuff" non-value proposition.
As I noted in another comment, I think it would be wise for iDoneThis to reconsider its pricing model as $5/user/month seems very likely to create agita as the number of users scales. As an example, consider that a Silver Github plan costs $50/month, and can easily support many companies with a 20 person development team.
A company that spends an human being's time on evaluating tiny expenditures is not being thoughtful; it's being wasteful. Your employees' time has value just like money does, and any appreciable amount of an employee's time is worth more than $100.
I reckon $1-2 per month is way too low if they already have paying users at the $5 per month rate. ...but perhaps they could offer discounted pricing of say $4 per user if it was paid annually ($48/user/year instead of $5/user/month).
For the people that are complaining about this point of view, remember that this is a PAYING customer who is currently $600 a year for the service. I assume that most people saying not to drop the price are not paying users of this service.
I agree that you should not take into account the fact that most people say taht software is too expensive, but I think that you should also take onto account when people would prefer to "roll their own" than pay for your services as it also demonstrates that you dont have a "lock in" effect and so cant charge a lot more than what the product is worth to a customer.
At $50/month, it would take you a year to recover the cost of building it yourself on your company's dime. A time cost you should be spending on something to increase your company's revenue, instead of trying to save them $600 a year.
"I wouldn't pay 2 Starbuck's coffees per month, but I'd pay the price of a cheap cup at the gas station"
C'mon, man - everything on the internet isn't free.
Is it not about value? If 50 bucks a month extra value isn't being earned / created by your team as a result of using it, then stop using it :) Or use a whiteboard.
I don't use your product, but I feel like the poster above doesn't apply the correct value to your product. You are helping 10 of their employees. 5$'s is a small fee, 2$ is a small fee. Neither breaks the bank. Set your price point at what you're conformable with. Not to the idle promise of "I can do this, so it should be cheaper". They're underestimating the work/effort of creating it and the value it provides.
You're right that it doesn't break the bank. It just feels overpriced.
I am not underestimating the work/effort that goes into creating it, I am very aware of the effort required. My primary motivation for using it in the first place was because I was too busy to write something like this myself, and for that the price is fair - my time is worth more right now.
But I don't think a system which sends out email reminders and logs daily text updates is $600 per year software, sorry.
The author is clearly perfectly entitled to keep the price at whatever level he likes, and I wish him all the luck in his endeavour.
I'm not asking for more features, because I like the fact it does one thing and does it well. I reckon it's probably a fair price around $1-$2 per user per month. I can't help but think you'd get more revenue overall with a lower price-tag.