Short video/talk by Jason M. Lemkin arguing that switching customers to annual contracts is bad advice. Lemkin warns VCs often recommend annual billing because it looks better on spreadsheets, but product teams should align payment options with customer preferences (monthly vs annual) and let customers choose—especially since individuals prefer monthly trials while large companies may prefer annual procurement.
Be careful. The advice you get, be careful. The short term advice. For example, another related terrible piece of advice VCs give you is switch to annual contracts. This is terrible advice. Terrible advice, Lenny. Terrible advice from people who've never built products and aren't in the field. Going to annual contracts on a spreadsheet looks great. On a spreadsheet, it looks great. You know what's better? Letting customers pay. They want to pay. If it's you or me buying for ourselves, Lenny, you know, we're still going to put it on a credit card, aren't we? If it's our own personal. And we want to pay monthly, usually we don't know. Even if it's. We usually want to just try it monthly. Big companies want to pay annually because they have procurement departments. Why force people to go the way they don't want to go? So just start. This is, this is a product audience. Product needs to be the voice of the customer. It's not so much customer success as it used to be.
