This is the (evolving) new design. What do you think?
This is the (evolving) mood board. What do you think?
Conventional wisdom says SaaS apps should have three pricing plans. You should raise prices until you find a price the market can bear and then stick with it… I tried that. It didn’t work out.
I then tried a different experiment. I segmented my site into three separate marketing sites each with its own Plans and Pricing. As a result, I saw signups for higher plans skyrocket.
My Plans and Pricing Sucked
I was lucky enough to be invited to speak at Microconf 2011. On the second day of Microconf, just after I had spoken, I ended up having lunch at a table with Hiten Shah and Ramit Sethi. Our conversation was immediately focused on Pluggio. To my surprise, both Hiten and Ramit felt my Plans and Pricing were completely wrong.
The thinking at the lunch table went like this:
We (Hiten and Ramit) only have one Twitter account yet we are power users with large followings. We can sign up and get huge value from your product at a price point of $9.95. That’s crazy because power users like us should be at a much higher price point! At that time my Plans and Pricing looked like this:
Time for a New “Magic Lever”
As always, I spoke about my problem to my trusted network on StartupGuild and discussed it with Jason Roberts on Techzing. During a few of those discussions some people suggested I needed a new metric. A way to determine a user’s level of success on Twitter, “something like number of followers”. Hmm, but how could I determine someone’s level of success on Twitter? I thought long and hard about it. Hmm. “Something like number of followers”. What could that be?
Holy sh*t! It could be number of followers!
What a great metric! I could make a low price plan for someone with less than 500 followers and high price plan for someone with more than 25,000 followers. And I could give both of them access to the same power features.
After an even deeper look, I discovered a few more possible pricing levers:
- Number of buffered/scheduled messages
- Number of automated RSS feeds
- Grow your following – YES/NO
- Spreadsheet scheduling – YES/NO
- Post to Facebook – YES/NO
- Local Search – YES/NO
Find out What Your Customers Need
During the same Microconf lunch, Hiten and Ramit advised me to use survey.io to get a clearer idea of what my customers need from Pluggio and price accordingly.
The survey results were confusing. One of the most important sections asks – “What is the primary benefit that you have received from Pluggio?” – the answers varied widely. Here are some examples:
- “Even flow of tweets on my power tweeting account.”
- “Manage all of my client accounts perfectly!!”
- “Web based. Nothing to download, therefore nothing to slow my machine down.”
In short, 72 survey responses seemed to describe four completely different products.
Too Many Products, Too Many Levers, Too Few Plans
This left me in the rather unfortunate position of having four products, eight pricing levers, and only four plans to make it all fit.
In another brain storming session with Jason Roberts he suggested the idea of splitting the Pluggio home page by user type, “the way Dell does it”. (When you hit the Dell landing page, you need to specify what kind of user you are: Home, Business, Public or Enterprise. After your initial choice the site remains segmented to your market from that point forward.)
Jason asked if I had any such user types.
“As a matter of fact I do,” I responded. “I have Power Users, Business & Agencies.”
This meant I could split the marketing site into three different perspectives. Even better, I could architect each version of Plans and Pricing to be perfectly relevant for each user type rather than having to knock square pegs into round holes.
Three Dimensional Plans and Pricing
I had an epiphany. If I could think of a way to make it easy for users to flip between each “user type” of Plans and Pricing it could create a new type of vector. User type itself could become a magic lever.
I quickly mocked up a page with three simple links above the Plans and Pricing matrix to make it easy to flip between them.
Now, instead of trying to think of each user type’s Plans and Pricing as its own page, I began to think of three intertwined Plans and Pricing pages as part of a larger three dimensional matrix.
This is what I came up with:
This gives the user a new axis of upgrade possibility. A vertical axis to jump from one user type to another.
The low-end upgrade path has been calculated to move from $9 -> $19 -> $29 -> both horizontally (within a user type) and vertically (jumping between user types). The plans also jump in increments of 10, 20 and 30 in each direction. So which ever way you look at it, it feels like a natural upgrade path.
The chart below is a breakdown of new Pluggio signups for the past ten months (I introduced the new plans from 9th September onward).
|$9 pricepoint||$19+ pricepoint||Paid Signups|
|Mar||41% / $298||58% / $429||48|
|Apr||47% / $298||53% / $349||47|
|May||49% / $308||51% / $319||45|
|Jun||40% / $218||60% / $329||38|
|Jul||36% / $99||64% / $179||20|
|Aug||36% / $89||64% / $219||33|
|Sep 1st-8th||44% / $79||56% / $99||12|
||15% / $81||85% / $461||28|
|Oct||31% / $144||69% / $318||30|
|Nov||18% / $90||82% / $405||27|
|Dec||12% / $81||88% / $602||27|
(Please allow for a small margin of error due to rounding and plans prior to September 9th being $9.95 versus $9.)
Overall revenue is better in recent months, however in earlier months revenue was also good due to the product being shiny and new. The main goal was to get the product out of the revenue slump n July & August which seems to have been achieved.
Here is the “Mood Board” for AnyFu that outlines the basic concept of the brand.
We’re very happy with this working version of the logo. The orange circle is an asterisk. In coding this is a wildcard and means the same as any.
If you’ve been listening to TechZing you’ll know that I’m starting a new company with Jason Roberts called AnyFu.
We just got our finalized character created by the magical genius of Scotty.
We’re stoked about this awesome artwork!
I was rummaging around my Hard Disk and found this song. It’s the last full song that I wrote and recorded before I gave up trying to be a professional musician. It makes me think that one day, if I can get some free time, I’ll make “that album” that I’ve always wanted to make. One day…
Shine (Needs a decent set of headphones to be heard as intended.)
When someone calls and leaves me a message, Vonage tries to transcribe it… and then emails it to me. Here’s one I got today:
Hello this message is for Justin Benson, this is leave it out I’ve been on the eighth seminar from putting shelves in the school. I just called to remind your appointment for today at 145. I’ll do your home 212, 3B Star rolls of how the height, 2123 at least I will know how the heights. Please call me at xxx-xxx and this is for your birthday Michelle, it’s Sharon blood in her urine testing. Okay thank you. bye bye
I never thought I would see the day that Internet Explorer had less than a 10% browser share for any web property I built.
I assumed it wouldn’t be possible for the other browsers to to topple such a large market share.
I was wrong.
CiviliNation’s mission is to foster an online culture where individuals can fully engage and contribute without fear or threat of abuse.
I am no stranger to this issue and created my “I’m A Real Person” page specifically to deal with this.
I encourage you to check out CiviliNation and support the cause if you feel inclined. It’s one of the few internet causes that can actually have an effect because it is trying to change the internet – not the real world.
Start Small, Get Big – No Investment Required
When I posted I had no idea the amount of interest it would generate. Viewed over 50,000 times, I received a flood of emails from people supporting the main thesis and calling for action.
The massive interest in the post served to solidify in my mind that there is need for one (or more) systems that can facilitate many thousands of entrepreneurs to “start small, get big” without the requirement to chase limited VC funding or incubator placements.
My idea is to create a system called The Startup Guild that is somewhat like a distributed and virtual version of YCombinator. The Startup Guild would use game mechanics to help track and match up participants into self supporting mastermind groups. As an analogy, if YCombinator were client-server, the Startup Guild would be a torrent tracker.
The main premise of the guild would be to help entrepreneurs build their first profitable business via the unfunded route of bootstrapping, however there would be nothing about the guild to exclude participants from seeking funding or placement at an incubator.
Problems The Guild Would Try To Solve
- How can I build a start-up with no investment?
- How can I meet like minded entrepreneurs to bounce ideas off?
- How can I keep motivated and be held accountable?
- How can I find a business partner?
- How can I build a startup if I’m not based in Silicon Valley?
The Startup Guild – Potential Components
news.startupguild.net – A reddit style link rating & comment system dedicated to articles related to “no-investment, start small, get big”
blog.startupguild.net – A “guest post” blog with articles from people who have had success with “start small, get big” approach
toolkit.startupguild.net – A toolkit with information & resources about “start small, get big”
tracker.startupguild.net – A system to publicly track entrepreneurs progress and match up mastermind groups
In my mind the key to making a distributed human network like this become successful would be to facilitate the creation of self supporting micro-groups. Mastermind groups.
The entrepreneur tracker would use game mechanics to match up mastermind groups and ensure that each group had a spread of experience. For example, it wouldn’t make sense for a group to consist of 1 person making $100k/month and 6 others just starting out. I had in mind the idea of each person within the system having a current status badge. Using game mechanics the system could also encourage competition between mastermind groups and individual entrepreneurs.
Here is a very rough example of what I’m talking about:
- Apprentice – Just starting out (A1)
- Novice – Have 100 registered users (N1)
- Mentor Level 1 – Already earning $1000/month (ML1)
- Mentor Level 2 – Already earning $5000/month (Ml2)
The tracker would match up a group like: A1, A1, A1, N1, N1, ML1 – The group might then be called “The Big Lebowski” and be tracked against performance. Think baseball league.
If you would like to follow the progress of the Startup Guild as it pops into existence sign-up to this mailing list. If you would like to help build the tracker or curate the toolkit please send me your ideas, passion level, commitment level & experience.