Pricing

Pricing is a function of positioning and value capture, not cost-plus accounting. The most consequential lever in software economics is the value metric: charging in alignment with how the customer derives value creates an automatic expansion loop as they grow.

1. Value Metric Decision Tree

Choose a value metric that scales with customer usage without punishing adoption:

• Per-Seat / Per-User: Best when collaboration is the primary product value (e.g. Slack, Figma). Anti-pattern when single users share credentials; avoid if account sharing throttles adoption.
• Usage / Consumption-Based: Best when value correlates directly with discrete units (API requests, compute minutes, GB stored, emails sent). Ensure customers can set spend caps and alerts to prevent bill shock.
• Outcome / Value-Shared: Best when attribution is clean and deterministic (percentage of payments processed, percentage of ad spend managed).
• Feature-Gated Tiered: Best when customer segments have distinct feature requirements (individuals vs teams vs enterprise security/compliance).

2. Trial vs. Freemium Framework