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Estd 4.22.2023
Based on the insights shared in our saas pricing book, Price to Scale, the guidance is not to wait until you have a huge user base or have fully achieved viral growth before you start monetizing. Here are the key points:
• It’s important to introduce monetization early in the product’s lifecycle to validate that customers see enough value to pay
– Early on, while you may be offering many features for free, there’s nothing inherently wrong with charging for added value like implementation, onboarding, or additional services.
• Using early monetization helps set market expectations
– As our book illustrates, when we began charging fees for certain services, our customers didn’t push back because they had already come to expect that aspect of the offering.
• Allow time to gather usage data before major pricing changes
– We recommend a period—around six months to a year—of tracking user behavior and feeding that insight back into your pricing strategy before rolling out significant changes. This ensures that any adjustments to your paywalls or tiers are based on solid usage data, key to avoiding common issues like misfiring contracts or inaccurate revenue recognition.
In summary, for a product-led growth SaaS, it is generally advisable to start monetizing relatively early rather than waiting for a massive viral user base. Early introductions of paywalls or paid tiers not only capture revenue but also help in refining your pricing strategy based on real user interactions and expectations.