Comment by wadefletch
19 hours ago
flip-flopping on pricing has led users to feel nickel-and-dimed
i like cursor fine, but check out the forum/subreddit to see people talking like addicts, pissed their fix is getting more expensive
i think this aggressive reaction is more pronounced for non-programmers who are making things for the first time. they tasted a new power and they don't want it taken away.
I agree with your take, but I still don't excuse anti consumer practices like that. It annoys me because this is a repeat problem in this space, where these companies don't take into account the market dynamics, or costs of their service. From the start I've been looking at these $20.00 subscriptions, and then my own personal api per token costs and been wondering how they aren't all bankrupt.
Look no further than founders in the sports betting space, like the fanduel founders. Borrow a bunch of money at huge valuations because of hype and ignore the fact, that despite it being exciting and popular, the margins are like <5%. Fanduel founders sold for 400 something million, walked away with nothing. Its now a multibillion dollar company when the new owners realized the product was marketing, not the vig. These AI companies are shifting towards their "marketing" eras.
I think any "value add" business that has a primary product built on top of another larger business' non-commodity service(s) runs the risk of having to re-do their pricing in ways that are outside their control.
This is nothing new. I'm not sure if it's "anti-consumer" as much as it's just a risky play from a brand and customer happiness viewpoint. Because your prices can be forced up by your supplier, and your customers will be mad at you, not at your supplier.
I do also think it is on consumers - in some part - to go into it with eyes open and do their research.
Thankfully a product like Cursor is a monthly sub and not a big up-front investment so if you don't like - or can't afford - the new pricing, you can just stop paying.
If the people are still paying the increased prices, it's a success. Rugpulling literal addicts is a great business model. Remember that business profits are primary, not consumer opinion.
What surprises me is just how much they've missed the mark.
I'm not an extreme user of Cursor. It has become an essential part of my workflow, but I also probably on the lower/medium section of users. I know that a lot of my friends were spending $XXX amounts/month on extra usage with them, while I've never gone beyond 50% included premium credits usage.
After their changes I'm getting hit with throttling multiple times a day, which likely means that the same thing happens to almost every Cursor user. So that means one or more of:
- They are jacking up the prices, to squeeze out more profit, so it looks good in the VC game
- They had to jack up the prices, so that they aren't running at a loss anymore (that would be a bad indicator regarding profitability for the whole field)
- They are really incompetent about simulating/estimating the impact of their pricing decisions, which also isn't a good future indicator for their customers
My guess is that it's your second scenario there (avoid running at a loss). In the start-up game scale/growth is the most important thing and profits really aren't that important. you want to show to later stage VCs that your idea has traction and there's a large addressable market.
Whilst profits aren't important you also can't burn all your current capital, so if the burn rate gets too high you have to put up prices, which seems likely to be what Cursor is doing.
I want that entitled attitude to spread. Destroy profitability.
That's where the real test lies for Cursor and programming LLMs.
Will users feel that a $200 subscription is worth it or not?
I think what everyone, including those programmers advocating coding agents, are forgetting is that if you can have a full time programmer for $200/m, then that becomes the new value of programming labour in the open market.
IOW, the market will slowly but surely drive the labour rate for programming down to the cost of the cheapest coding agent.
So, sure, boasting about a 10x speedo on boilerplate has good metrics, but let's not delude ourselves that programmers are going to be paid enough to afford the $200/m coding agent in the future.
No I’m a programmer and I’m better about the rug pull also.