Fynn GloverCo-Founder & CEO, Schematic · Co-founder & CEO of Schematic | Runtime monetization infrastructure for SaaS & AI companies

Startup pricing & packaging decisions with Drymerge founder/ceo Edward Frazier #pricingtips #saas

13 Dec 2024 · 1 min

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1:08

In this interview segment, Edward Frazier, founder and CEO of Drymerge, discusses two major pricing challenges his startup faced. First, the team chose to launch a very generous free tier despite the product being immature; the heavy usage data collected from this tier proved crucial for rapid product improvement. Second, as they began pursuing larger enterprise deals, they struggled with how to price and negotiate. Initially they would propose a number and adjust up or down, but they soon realized they needed a more structured approach. By asking prospective customers detailed questions about the hours spent, team size, and roles involved, they could craft more accurate initial quotes, which helped build trust with bigger clients.

Chapters

founders often struggle with pricing. I'm curious if that has felt true for you personally. It was and is a struggle, right? It was definitely more of a struggle before. One thing that was really hard for us was basically making the decision to go for a free tier and like a super, super generous free tier. And the reason I think it was the right decision was the information we got from basically seeing heavy usage of a product that wasn't great was really important in improving the product pretty fast. That was, that was the initial struggle. The second one was when we started negotiating bigger deals. How do you go into a conversation like that? That wasn't something we had done really before. And so, you know, initially we just throw out a number. It's like, okay, how about this? And it's like, okay, that's a little too high. It's a little too low. And then we were like, okay, how do people like validate this themselves? And so that, you know, kind of got us to asking questions about, you know, how many hours do you actually spend on this? Right? How many people on your team are doing this? You know, what do they make? And I think that leads to a way better first quote, um, that has been helpful in building trust, especially with, you know, our bigger customers.