the-own-lab/saas-pricing

SaaS Pricing

Pricing decisions for a solo founder shipping to real users. Not an academic model — a set of defaults that are usually right, with flags for when they're not.

The Four Questions

Answer these before touching numbers.

1. Who pays? — the user, their employer, or a third party?
2. What does a unit of value look like? — seat, workspace, API call, stored GB, project?
3. How often do they get value? — daily, weekly, monthly? This caps willingness to pay.
4. What's the next-best alternative, and what does it cost? — including DIY with ChatGPT.

Default Tier Structure

For most B2B SaaS under $1M ARR:

• Free / Trial — enough to feel the core value; not enough to live on
• Starter ($19–$49/mo) — a single person or tiny team; one-workspace feel
• Team ($99–$299/mo) — multi-user, admin controls, usually the biggest logo on the page
• Enterprise ("Contact us") — SSO, audit logs, custom terms

Three paid tiers is the sweet spot. Two is too few (no anchoring). Four+ confuses.

Pricing Model Choice

• Per-seat — default for collaboration tools; predictable revenue
• Per-usage — for API / compute / AI; aligns cost with value but makes revenue lumpy
• Flat — for single-user tools; simplest, leaves money on the table
• Hybrid (seat + usage overages) — common at $1M+ ARR; overkill for solo

The Anchor Rule

Your highest visible tier anchors the middle tier. If you want people to pick Team at $199, show a $499 plan above it. The $499 plan doesn't need to sell — it needs to exist.

The "Feels Underpriced" Rule

If no prospect has ever said "that's expensive," you're underpriced. Raise it.

Red Flags to Flag in Review

• Free tier that includes the main value prop → no upgrade pressure
• Pricing page explains infrastructure cost → users don't care
• All tiers feature-gated by arbitrary limits (500 vs 1000) → users see through it
• Hiding the price behind "contact us" below Enterprise → kills self-serve

Output Format

When invoked, produce:

1. Recommended tier names + prices
2. One-line justification per tier (who it's for)
3. The feature-cut between tiers (what's locked behind each upgrade)
4. 1–2 flags if you see red-flag patterns in the user's draft

Anti-patterns

• Modeling pricing from "cost + margin" — SaaS cost is dominated by fixed R&D; cost-plus gives absurdly low numbers
• Matching competitor prices exactly — you don't know their unit economics
• Over-engineering before traction — if you have fewer than 10 paying customers, just pick a price and ship

Philosophy

Pricing is a product decision, not a finance decision. The price shapes who shows up, which shapes what you build. Solo founders chronically underprice because they compare to their own walkaway value, not to the buyer's alternative.