Damien Fuentes

Bay Area, CA Consultant to Startups Joined over 6 years ago

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  • Posted to AMA: Figma's New Pricing Model, Apr 06, 2017

    While I don't disagree with your need to start monetizing. I humbly suggest you revisit your pricing for the paid functions. I would also suggest you go back and conduct some multi-variate testing on pricing.

    Insofar as your web application or SaaS business model suggests, you have a few levers to push and pull when trying to make the transition to that altogether important user-paid model.

    You probably don't know your LTV yet, but at this point, you should be able to start honing your CAC and the channels driving the most signups as well as Churn.

    I see the biggest issue with your new announced pricing as the cost of product either in a MRR assessment or as YRR as not very price-competitive with other tools, such as Sketch plus other online collab/commenting tools (Easier.cc, InVision, Marvel,...). These other tools are, to some extent, more mature, and provide an excellent extended ecosystem. In short, you may consider revising that $12 or $15/mo to $7 or $8/mo with at least 3 team members. Adding additional capabilities that you charge for later. Show your investors that first: you can derive revenue. Second: you can optimize and increase the revenue over time by being a core tool.

    By lowering your price, you'll set a $21 threshhold in MRR and you'll appear competitive against Sketch. You'll entice existing users of AdobeCC to add to their toolset. And you'll make it feel trivial for a small design shops to add clients as (paid) team members on new projects at a higher per person price point (e.g., $12), increasing your incremental revenue at no cost.

    Netsuite's CFO has written extensively about the rationale to license on yearly basis, lowering CAC (unfortunately negatively impacting conversion a bit) with mid-year add-ons at higher cost versus monthly. These are all strategies that lead to an increasing path to profitability.

    Having been at Macromedia during its formative years of Freehand, Dreamweaver, and later building other web-based companies I've seen the impact of decisions like this on the platform (pricing, 3rd party extensions, partner pricing, and channels) increase or diminish the widespread adoption of an otherwise excellent product.

    What were the factors that influenced your decision on the pricing you came up with?

    4 points
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