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Reading: Greg Isenberg Predicts Why “Pay What You Want” is the Future of SaaS
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SaaS

Greg Isenberg Predicts Why “Pay What You Want” is the Future of SaaS

Greg Isenberg
Last updated: July 10, 2024 2:53 am
Greg Isenberg
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3 Min Read
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Greg Isenberg is a multi-exit Silicon Valley entrepreneur and owner of Late Checkout product studio. He has:
- Headed Product Strategy at WeWork
- Been an advisor to Reddit
- Founded a startup, Islands, which was sold to WeWork
- Founded 5by, which was sold to StumbleUpon
Guest Author: Greg Isenberg

People are in subscription hell. They probably don’t want to pay for another SaaS subscription.

New trend: “pay what you want” software

I’m seeing it pop up almost every week on new projects. And I wouldn’t be surprised if people saw conversion rates 2-3x when they switch from “pay monthly” to “pay what you want”.

Adds a ton of goodwill. It reminds me of Radiohead’s 2007 experiment with their album “in rainbows”.

They did something BRILLIANT. Instead of selling the album, they did a pay as you want and even included in option to pay $0.

At the time, it was unheard of. But the bet paid off big time.

Over 1.2 million people downloaded it in the first month and they made WAY more money than their previous album.

Sure, a bunch of people paid $0. And Radiohead needed to have zero ego about that. But it was worth it.

Now we’re applying that model to software businesses. Pay as you want is definitely more risk, but probably worth it for many high margin businesses.

And occasionally you’ll see a whale give you an wild amount for your product.

People are probably paying for $1000 for Sublime. God bless ’em.

I think you’re going to see a lot of indiehackers/solopreneurs use this model. Especially as AI drives the cost of building software business so down.

The way to do it (you can bookmark this):

1. Launch new product

2. For beta release make it pay as you want

3. Drive buzz

4. Print So, this way, you’ve creating scarcity for people to try the product. And that’s exactly what you want in a beta period.

You can keep pay as you want as your business model, or move to traditional monthly subscriptions once you’re out of beta.

Win-win. It would be cool if the big tech players will play catch up on this model.

Imagine if Figma or Notion or even Google launch a product that would be pay what you want? I’d say sign me up, pal.

What do you think of “pay what you want”?

Check out the original tweet here.

TAGGED:div5

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