This is a question that we sometimes get asked, so we decided to explain the logic behind our pricing policy for InfraNodus. There are mainly three reasons.
First, we are sure that InfraNodus can bring you at least a 10x return on your investment every month (we won't go into detail here as the whole landing page of InfraNodus is dedicated to showing why it's the case).
Second, running a free service from the beginning would require us to become a venture-backed startup. That would change the product and the company in the direction that we don't want.
Finally, if somebody finds our product valuable, they will probably spend quite some time with it every month. In most cases, time is money, so €5 or €15 would only make a fractional difference to the actual contribution our users make when using our product. But for us, this is a difference between being able to maintain and develop the product or dying out.
More on the two latter points below:
Venture Capital and Incentives to Grow
Many software tools are offered for free because their main objective is to grow their user base as fast as possible in order to sell the company in the future. These are usually B2C companies backed by venture capitalists, so they can afford it. If an investor puts $10 million into a company that has 1000 users, then a difference of €15 per month is not going to make a huge difference to them (2% of recurring annual revenue). However, for a company like InfraNodus, which is not backed by investors, this extra €15 can decide whether the company survives or fails (€180 a year x 1000 is €18000, which can pay for 2 developers).
Another important aspect is that a company that is not backed by venture capital has completely different economic incentives, which also reflect in the product and affect users directly, even if they don't know it. For example, venture capital firms might invest in 10 companies, fully aware that 9 out of 10 might fail and the remaining one will grow so quickly that it will cover the costs of all the investments and provide an outsized return on the investment. What does it mean for the users?
First, 10 out of 10 companies backed by VCs will have to grow as much as possible as quickly as possible. That means that they will usually have to pivot to a single use case that brings the most money and has the least churn. In the case of InfraNodus, it would be marketing applications. While we love using InfraNodus for marketing, we believe that it's also very valuable as a tool for thinking, ideation, and research.
Unfortunately, these other use cases are harder to perfect for multiple reasons, mainly because the users are less patient. If you're a marketer, you can put up with a slightly complex interface, because you know that you're going to make a lot of money on that extra effort (just look at the SEO tools or the PowerBi interface that is still stuck in the 90s). This is not the case with consumer tools, where users have a much shorter attention span and many more incentives to procrastinate and avoid using something too complex. While we do our best to make our tool simple to use, it's a complex task, so if we receive funds from VCs, the "right" thing to do would be to focus on the marketing application first and not cater to other users. We don't want that to happen to our product, so this makes it harder (if not impossible) for us to get any external funding.
Another reason why we don't need the funding is because we don't like the culture that comes with it. We don't want to "disrupt the world" and grow 10x into a multibillion-dollar company that "captures the market." We are not in it for a crusade. The idea is to build a great product that people want but at an ecological pace that also leaves space for research and pleasure.
Finally, InfraNodus is an experiment in bootstrapping a company using the contributions from the subscribers only (we call it crowd-sourced software). We are interested in creating a story where this has worked out, and we are aware it might take longer than it would (or should), but that's part of running a more traditional business that is sustainable in the long term. Startups are caught in a game where the company has to be sold multiple times to other investors to make money. It has to grow fast and capture the market. Competition has to be dead. We prefer another setup where multiple companies in the market compete and continuously improve the product. It's not the "winner takes all" mentality, but, rather, the "there is a space for everybody" mentality, which also implies a degree of healthy competition and mutual inspiration. This has to be great for users because not only do they get a better, more versatile product. But they also have multiple alternatives in case one company goes bust, so it's a more resilient system.
Users' Time is (Already) Money
Another important aspect is the users' time, the value they get out of the product, and their readiness to pay for it. We consider InfraNodus useful if people actually use it for a few hours every month. In most Western countries (where a majority of our users come from), the hourly fee of a typical user of our product is somewhere in the range of €30 to €60 per hour. If they use InfraNodus for, say, almost 3 hours a month (2x20 minutes every week), that would cost them about €90-€180 in their time. The subscription fee difference of €5 or €15 should not make a huge difference to them, because it's just 5%-10% of what they are already spending (their time). However, for us, it's a big deal because with the scale we get the resources we need to develop the product, maintain the servers, and pay the people who are working to make InfraNodus better.
That is why we believe that if the users find the product valuable enough to put a few hours into it, then a small monthly amount that is the same as the price of one meal should not be a deterrent for them.
FAQ: Why Not Offer Free Accounts?
In fact, we do offer a free trial. When you create an InfraNodus account, you can use it for 2 weeks for free before you are charged. You can cancel your subscription beforehand and then you won't have to pay anything.
The reason why we require the credit card details is that we've A/B tested various subscription models and found that the one that we currently have leads to the highest retention. We want users who get value from our product because we are constantly listening to their wishes to make the product better for them. If there's a disproportionate number of free users, they have different incentives and may influence the product in a direction that will be detrimental to paid users' experience.
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