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0 pointstarr1112y ago0 comments

I guess I have 6 months to figure out what to do. This kind of sucks for me.

I really like intercom. But i guess I am not the target customer for my startup because the economics don't make as much sense unless I can change my conversion dynamics before January.

The new pricing punishes small, bootstrapped businesses who have a free tier in their product, because of how they've defined an "active" user.

"An active user is defined as having used your product in the last 30 days"

https://www.intercom.io/pricing

Let's say you have 1% conversion from free to paid. Some larger percent use your free tier.

Because these free users are "active users", you have to pay effectively 4.4 cents a month ($11 / 250) per user.

The problem here is that if you got a big push of "free tier" users who may not be qualified, it can cost you a lot of money. Ie, 1000 users signup because of some promotion, but let's say they came from TechCrunch and didn't convert. You still have to pay $40 to intercom for the privilege of hosting these free users.

This also happens with email announcements (new product features, content, etc) that can drive some percentage of users back to the site. So, if I activate a few hundred dormant users with an email (who use the site, but don't upgrade), it will cost me a lot of money.

So, unless you have a big enough premium user base to subsidize the free users, this is going to be prohibitive.

0 comments

aquark12y ago

Totally agree -- my pricing can't sustain the cost per-user in this model. Any my site's usage is very seasonal, easily up to 10x at different times of year, and it isn't clear how dynamic the plans are.

Possibly my pricing is wrong, but simply per-user seems like a very blunt instrument. Not sure what a better way of measuring the 'value' here is though. Ideally % of total hosting bill would seem 'fair', but if a service is going to cost 30-50% of the hosting costs then it needs to provide an awful lot.

dmcy2212y ago

Same here. The majority of our SaaS users are non-paying (and will never pay because of their user role). With the new plans, we would immediate go from $50/month to $400+/month. That's a lot for a bootstrapped startup and would be one of our most expenses services we pay for.

We would be happy to pay even $99 or $149 a month, but increasing the price 8-9x is a big jump, as great as the product is.

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