Ben and Jazz critique Vercel's seat-based billing model, arguing it doesn't fit a platform where teams automate deployments and need few or no seats. They suggest the $20/month seat charge is misaligned with actual value and may be an afterthought to capture payments.
Chapters
Ben, I want to ask you for your reflection on what you like about their pricing page as well as anything you feel like is kind of a potential opportunity. You know, it would serve you even better than their current pricing does.
Yeah, for me, I think like the real elephant in the room here is, I mean, this screen, I do find it a little bit strange for, you know, I would call for sale like a pass. A platform as a service, like, um, having your leading kind of a summary of your pricing be seat-based is a little strange, right? In Vercel, it's kind of hard to imagine. It just seems very counterintuitive to do seat-based pricing to me. Um, and it's like a, a very lead-bearing thing in my mind because, um, at the beginning, right? Like you don't pay much for Vercel, like Jazz was saying, like it's cheap, easy to get started on, and then as you scale, like you might start incurring more of these usage-based costs, which means like probably not a lot of people are paying mostly seat-based pricing. And then as you get bigger, like you're probably automating your Vercel deployments in a way where maybe you don't even need that many seats. Um, in our case, we only, we are a Vercel customer and we only use Vercel for fairly simple frontend parts of our stack. And so we actually do basically just pay for seats. So it's a little bit of a strange billing model for people in our situation specifically. Unclear to me how many people are in that type of situation. But either way, it seems like an odd thing to lead with to me.
Is it, is it, is it odd because it leaves money on the table for them or because it doesn't feel sort of aligned with the value that we're getting from the, from the product?
Um, it's in our case, it's definitely unaligned, right? Because, um, I don't think there's much connection between the number of developers we have on our team and the value we get from Vercel in order to charge like this, right? I mean, and obviously they are contributing a lot to Next.js being so popular and benefiting from that. So that's, I think, totally inextricable from their brand as well.
Jazz, what do you think about sort of the seat-based billing metric for the earlier stage company being misaligned with the value that company's getting? Is this something— let's assume that's true. Is this something that they likely know and it's all about adoption pricing to just get more and more people in the door, or are they considering this from a different angle?
Um, I don't know. I mean, like, it's a good, it's a good question on the seat-based stuff. I, it, you know, it's funny because when you said the seat-based stuff, I actually just like when, you know, I was reviewing this and I, you know, when I was going to our account, like, I just did— it didn't even occur to me that was fee-based, actually. It's like such an afterthought here. Um, I don't know. I mean, I wonder if they just like want to get a credit card and it's like one way to charge people like that aren't using the product that much. Um, like, I can't imagine this is like any meaningful percentage of their revenue, right? And so like, I don't really know why they do that. Um, I agree, it's like for an infrastructure type service seems super misaligned with the value they deliver. And given kind of what Ben was saying, like when you automate deployments from GitHub, et cetera, like how many people are actually logging into Vercel? Like I don't even log into Vercel more than like once every like quarter to, and I'm, and like there's no reason I do it. Just, I do it just to like confirm a build has like happened. And so like it just doesn't really make sense why they charge. Seats. I feel like they could get rid of it and like probably make a lot of people happy. The only other reason they might be doing it is to differentiate between hobby and pro, um, right? Like if you are below their usage limits, um, there is no other differentiation, um, and they'd have to collapse into kind of like just a hobby tier.
Yeah, I would imagine they have a lot of people that are paying them $20 a month.
That's it.
Yeah, you know, essentially hobbyists, but one seat and they're below the free tiers for every usage.
