SaaS Pricing Basics for First-Time Founders
Good SaaS pricing starts with a value metric — the thing that grows as a customer gets more value. Pick that first, then build two or three tiers around it. Most first-time founders underprice, which starves support, marketing, and the product itself.
Price is the fastest lever in software and the one founders touch last. Get it roughly right early; you can refine it forever.
Start with the value metric
The value metric is what you charge by: seats, projects, contacts, transactions, reports. A good one grows as the customer succeeds, is easy to predict, and is easy to explain in one line.
Two or three tiers, not seven
| Tier | Job | Common mistake |
|---|---|---|
| Entry | Remove the risk of trying | So limited it proves nothing |
| Core | Where most customers land | Hidden behind the top tier |
| Scale | Capture larger accounts | No real reason to upgrade |
Free plan or free trial?
- Free trial: better when value appears quickly and support costs money.
- Free plan: better when usage creates network value or content that attracts more users.
- Neither: fine for expensive, high-touch products with a clear buyer.
Why underpricing hurts
A low price attracts the customers who complain most and pay least, and it leaves nothing to fund support or marketing. Raising a price on existing customers is far harder than starting higher and discounting.
Check churn before you optimise price
Price changes cannot fix a retention problem. If customers leave in month two, the product has not earned its place yet — see the product-market fit signals that tell you when it has.
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