Comment by xpe

To think about pricing, it helps to think about:

1. How much signal do you get from pricing? For example, how much customer commitment do certain price points bring? How much does real world usage help? Strike a balance.

2. You want to attract early adopters. What pricing models are worth trying? How important is offsetting costs right now? Is traction and adoption more important, and if so, how much more? What metrics can help measure how to balance these goals?

3. How can you handle the scenario where you are lucky enough to get a lot of interest? How do last long enough to test your business without going bust? Your pricing model should be driven by these scenarios and your risk preference.

4. Leave yourself ways to adjust pricing without pissing people off. So if your initial pricing is tentative, be clear on that. Or let people lock in a monthly rate now in case it goes up later.

5. Create an internal quantitative model that predicts your expenses across some likely future scenarios. Tie your pricing model to some multiple of that. This can double as smart business planning to think about risk and what it takes to reach your goals.

6. Consider adjusting pricing based on how intensively someone uses your service, not simply based on search quantity, but your end-to-end cost. Recall that Twitter’s infrastructure costs are dramatically driven by a relatively small number of users with high fan out. What aspects of your offering are the most expensive? How can you mitigate these costs? How can you map these pricing differences to features that customers care about?

(Last edits: 12:31 pm EDT)

P.S. I created a search engine that never took off about 10 years ago. These questions would have helped me.