Modern Pricing Plans with Dor Sasson, CEO Stigg
Most companies aren't in the billing space, yet they need to deal with pricing and billing as a core piece of technology, whether they want to or not. Stigg is an easy to implement, headless pricing and packaging platform that takes a lot of the hassle out of pricing and billing for your SaaS applications.
Stripe integrations just don't give you what you need for modern SaaS application subscription management.
Today on Modern Digital Business
Thank you for tuning in to Modern Digital Business. We typically release new episodes on Thursdays. We also occasionally release short-topic episodes on Tuesdays, which we call Tech Tapas Tuesdays.
If you enjoy what you hear, will you please leave a review on Apple Podcasts, Podchaser, or directly on our website at mdb.fm/reviews?
If you'd like to suggest a topic for an episode or you are interested in being a guest, please contact me directly by sending me a message at mdb.fm/contact.
And if you’d like to record a quick question or comment, click the microphone icon in the lower right-hand corner of our website. Your recording might be featured on a future episode!
To ensure you get every new episode when they become available, please subscribe from your favorite podcast player. If you want to learn more from me, then check out one of my books, courses, or articles by going to leeatchison.com.
Thank you for listening, and welcome to the modern world of the modern digital business!
Useful Links
About Lee
Lee Atchison is a software architect, author, public speaker, and recognized thought leader on cloud computing and application modernization. His most recent book, Architecting for Scale (O’Reilly Media), is an essential resource for technical teams looking to maintain high availability and manage risk in their cloud environments. Lee has been widely quoted in multiple technology publications, including InfoWorld, Diginomica, IT Brief, Programmable Web, CIO Review, and DZone, and has been a featured speaker at events across the globe.
Take a look at Lee's many books, courses, and articles by going to leeatchison.com.
Looking to modernize your application organization?
Check out Architecting for Scale. Currently in it's second edition, this book, written by Lee Atchison, and published by O'Reilly Media, will help you build high scale, highly available web applications, or modernize your existing applications. Check it out! Available in paperback or on Kindle from Amazon.com or other retailers.
Don't Miss Out!
Subscribe here to catch each new episode as it becomes available.
Want more from Lee? Click here to sign up for our newsletter. You'll receive information about new episodes, new articles, new books, and courses from Lee. Don't worry, we won't send you spam, and you can unsubscribe anytime.
Mentioned in this episode:
Atchison Academy
What do 100,000 of your peers have in common? They've all boosted their skill set and career prospects by taking one of my online courses. https://mdb.fm/courses
Architecting for Scale
What does it take to operate a modern organization running a modern digital application? Read more in my O’Reilly Media book Architecting for Scale, now in its second edition. Go to: leeatchison.com/books or mdb.fm/afs.
Lee Atchison:
Most companies aren't in the billing space, yet
Lee Atchison:
they need to deal with pricing and billing as a core piece of
Lee Atchison:
technology. Whether they want to or not. Stiggs is an easy to
Lee Atchison:
implement headless pricing and packaging platform that takes a
Lee Atchison:
lot of the hassle out of pricing and billing for your SaaS
Lee Atchison:
application.
Voiceover:
This is the modern digital business podcast, the
Voiceover:
technical Leaders Guide to modernizing your applications
Voiceover:
and digital business. Whether you're a business technology
Voiceover:
leader, or a small business innovator, keeping up with the
Voiceover:
Digital Business Revolution is a must here to help make it easier
Voiceover:
with actionable insights and recommendations. As well as
Voiceover:
thoughtful interviews with industry experts, Lee Atchison
Lee Atchison:
Stiggs is an easy to implement headless pricing
Lee Atchison:
and packaging platform that takes a lot of the hassle out of
Lee Atchison:
pricing and billing for your SaaS application.
Lee Atchison:
Their API's help developers launch new pricing plans faster,
Lee Atchison:
that lead to better customer buying experiences. Doris Hassan
Lee Atchison:
is the co founder and CEO of stake and he's my guest today,
Lee Atchison:
dar Welcome to modern digital business podcast.
Guest:
Hey, Lee, great to be here. Thank you for having me.
Lee Atchison:
Of course, I'm so glad you're here. And I have to
Lee Atchison:
tell you, I'm I'm envious. Okay, and the reason why is, I often
Lee Atchison:
thought that what the SAS world needed was a platform that
Lee Atchison:
handled the standardized pricing and billing logic that every
Lee Atchison:
application has to build, you know, I'm talking about
Lee Atchison:
something more involved than just a simple stripe
Lee Atchison:
integration, that includes all of the, you know, the pricing
Lee Atchison:
strategies, and all that sort of stuff. And now you've gone ahead
Lee Atchison:
and created it, you've taken my idea. Now, if you take any run
Lee Atchison:
with it, I'm just I think it's great. And so tell me, like you
Lee Atchison:
to create steak.
Guest:
Hey, Lee , that was a really good way to get started
Guest:
the conversation, by the way, we're still hiring. So we should
Guest:
talk after the show. You want to opt in? I'm already excited. So
Guest:
how do we begin? So so a lot of folks that we we've talked to
Guest:
early on and still chat with today and work with today,
Guest:
whether their customers are part of our community, or folks that
Guest:
we can help think through their pricing and packaging
Guest:
strategies, they share the same emotion that you just described
Guest:
that it doesn't and it didn't made sense that there wasn't any
Guest:
off the shelf SAS infrastructure to solve this problem. Many,
Guest:
we're still used to think about pricing and packaging is a
Guest:
problem that comes in from the billing fraud from the
Guest:
financial, front of the company, where billing, and you know, and
Guest:
collection and payments and reporting. And all of that is,
Guest:
is something that financial teams should or revenue teams
Guest:
should be concerned about, or think about, and find ways to to
Guest:
solve that efficiently. And I think, with many interesting
Guest:
trends that are happening nowadays in SAS, it's becoming
Guest:
more and more evident that pricing and packaging is an
Guest:
experience. And so because it's an experience, it becomes more
Guest:
and more a product and r&d problem. And as such as
Guest:
developers and as product, people, we need a new point of
Guest:
view and new refreshed way to approach pricing and packaging
Guest:
that fits the way we think about this problem. And that includes
Guest:
flexibility and nimbleness agility, and many, many ways
Guest:
that developers are now nowadays developers, engineers, product
Guest:
managers have nowadays standardized how we build
Guest:
software, and we want to bring a lot of that way of thinking and
Guest:
way of being into pricing and packaging.
Lee Atchison:
So that's great. That's that's a good description
Lee Atchison:
of what you're doing. But why did you start this? What Why
Lee Atchison:
What was your motivation to get into this space?
Guest:
Yes, so So I used to be a product person at New Relic I've
Guest:
joined in after New Relic acquired my previous startup
Guest:
signify we used to build AI ml models for the observability and
Guest:
production environment space. We basically helped SRE teams and
Guest:
development teams deal better with the alert fatigue and noise
Guest:
reduction and we've put the work different practices of machine
Guest:
learning in AI to help deal with immense load of alerts. And it
Guest:
was after that New Relic acquired signify that I became
Guest:
more and more aware to the concerns and the and way of
Guest:
thinking related to pricing and packaging and SAS more more
Guest:
specific we were how Having a lot of major organizational
Guest:
change at the time that I was part of the company, and we had
Guest:
new leadership basically coming in and wanting to go in all the
Guest:
way on product, led motion, user led motion. And as part of that,
Guest:
scrutinizing and honing our pricing and packaging strategy
Guest:
towards the usage based and pay as you go motion. And as an
Guest:
organization, you know, cutting edge technology, and you really
Guest:
are some of the best engineers, best architects, you know, GTM,
Guest:
teams technologist, you know, at the forefront of building
Guest:
software, you know, as a new, you know, freshman product
Guest:
person didn't just join the team, I expected this, oh, this
Guest:
is going to be like an easy peasy, right? Like, it's gonna
Guest:
be a walk in the park to do this, to this overhaul. Little
Guest:
did I know that it's going to be almost a year until we are in a
Guest:
in a position where we're able to launch. And it touched upon
Guest:
every single function and department in the organization,
Guest:
everyone had to figure out how their things or their products
Guest:
or their features are going to live in the new world. And I
Guest:
think my very first moment that I said, this should be software
Guest:
like this should not you know, what we're doing this there
Guest:
gotta be another way was when I got an email with a spreadsheet
Guest:
that said, entitlements. And under this spreadsheet, I was
Guest:
supposed to list the features that I was responsible on the
Guest:
NDAA group, and I was supposed to identify them as
Guest:
entitlements, so that we can go to market and sell them in an
Guest:
appropriate way that fits the organization strategy. And when
Guest:
I saw this huge spreadsheet with all the information with all the
Guest:
different entitlements, I was like, this cannot be managed in
Guest:
spreadsheet. What if we want to change? Like, I started to ask
Guest:
all these questions, what happens if we're wrong? Like
Guest:
what? What happens if the way I'm, you know, I'm configuring
Guest:
our entitlements right now for our group is going to be wrong
Guest:
next quarter, and we're going to need to change it. Where are we
Guest:
changing? Like, I started to have, like, so many questions.
Guest:
But this was one of my early moments, like very early
Guest:
moments, though, it came aware to the concept of entitlements.
Guest:
And I began to be more and more convinced that this should be an
Guest:
infrastructure, and this is a big problem across the entire
Guest:
industry.
Lee Atchison:
Yeah, it's, it's funny is, so I was involved with
Lee Atchison:
new relics. Back end pricing engine for a while too before, I
Lee Atchison:
think before you joined the company, I was back when we were
Lee Atchison:
still, you know, virtually 100% appeal G driven company, give us
Lee Atchison:
your credit card, we'll go from there, you'd have to do the free
Lee Atchison:
trial, right? Or the free free tier. And, and we just started
Lee Atchison:
moving into an SL G's model for enterprise customers, and added
Lee Atchison:
all that complexity, and then started the process of going
Lee Atchison:
public. And everything was up in the air and changed and the
Lee Atchison:
pricing model was just in horrible shape at the time, I
Lee Atchison:
mean, I'm not talking anything bad that was customer facing or
Lee Atchison:
anything, but the system itself was just a hard mess, to try and
Lee Atchison:
deal with. And we were doing, trying to do simple things. And
Lee Atchison:
trying to, to, to turn it into a system that could easily add new
Lee Atchison:
capabilities and features as we went along. And quite frankly, I
Lee Atchison:
think we failed at that. I mean, we it just it was such a complex
Lee Atchison:
system, we just couldn't make anything happen. And so your
Lee Atchison:
whole mindset that say it took a year for you to launch because
Lee Atchison:
of pricing. I buy that I absolutely see that. And you're
Lee Atchison:
right, you know, then, you know, I've that was probably the first
Lee Atchison:
time I saw it a little bit, I guess at Amazon, but you were
Lee Atchison:
dealing with customers at Amazon, but not that much. But I
Lee Atchison:
saw it in spades and New Relic. And then after that when I
Lee Atchison:
started talking to customers, and you know, when I after my
Lee Atchison:
book and all that sort of stuff, when I started going out and
Lee Atchison:
talking to customers, then I started hearing that issue was
Lee Atchison:
really common and really prevalent. And so I absolutely
Lee Atchison:
understand and can hear where you're coming from here. This is
Lee Atchison:
a huge issue. But but let's let's get into a little bit more
Lee Atchison:
of the specifics here. Let's, let's make sure that people you
Lee Atchison:
know, we level set exactly what we're talking about here. And so
Lee Atchison:
let's talk you know, ask the basic question that some people
Lee Atchison:
listen to this are going to be asking now and that is why can't
Lee Atchison:
I just integrate with stripe? What's wrong with that and what
Lee Atchison:
am I missing from stakes by if I just integrate with stripe? What
Lee Atchison:
else is there?
Guest:
Okay, so first For most stripe is by far one of the
Guest:
most, you know, advanced and complete solutions out there.
Guest:
When it comes to Billing payments and whatnot, I think I
Guest:
have plenty to say about how pioneering their way both in the
Guest:
way they went to market as well as the way they structured their
Guest:
product and their infrastructure and etc. I think what is change
Guest:
is not necessarily tied to just stripe, I think there's a couple
Guest:
of other things that may help shine some light into why this
Guest:
is so important. And what becomes so difficult. So, stripe
Guest:
is became almost a synonym for developers to we need to charge
Guest:
for this thing. Whenever you know, whether you are an early
Guest:
stage or even you know, as your grow, if you you know, if
Guest:
somebody from the business side, or the leadership comes in and
Guest:
say, Hey, we need to be able to charge and they would come with
Guest:
this, you know, let's call it like problem statement, do r&d,
Guest:
the almost immediate response will be okay, let's, you know,
Guest:
let's enter stripe. And the main reason is because stripe did an
Guest:
amazing work in making themselves almost synonym to
Guest:
charging an ends in internet. The problem is, or the problem
Guest:
begins, where you don't need to just charge. So if you were an E
Guest:
commerce, business or company and you're selling something on
Guest:
a shop, or you know in Shopify, or on the internet somewhere,
Guest:
yeah, you probably just need to charge. But SAS is SAS really
Guest:
about just charging? The answer is almost never know. Because
Guest:
value adoption and pricing in SAS and the customer journey,
Guest:
it's not just about the checkout, it's not just about
Guest:
the elements in the code, the stripe elements that allow you
Guest:
to safely and securely insert credit card details and close
Guest:
the transaction. There's so many before that in between and
Guest:
afterwards, that is not covered by the stripes of the world,
Guest:
that it's just literally scratching the surface. And now
Guest:
it plg motion and user led motion. It's even becoming more
Guest:
and more evident. How far are we from software that solves this
Guest:
the right way. Stripe gives you powerful solutions all across
Guest:
the board on all those fronts billing, you know, subscription
Guest:
management quotes, ability to charge payments, Dunning and
Guest:
etc. But when you think about pricing and packaging, a lot of
Guest:
these things actually fall between the cracks of how the
Guest:
founders of stripe, thought of stripe, when stripe begin, it
Guest:
was all about the ability to monetize in charge and the
Guest:
Internet and they solve payment gateways really well. And they
Guest:
solve checkout really well. And they solve, you know with
Guest:
collecting payments and doing subscription. But they they had
Guest:
mostly retailers and commerce in mind when they started, they did
Guest:
shifted and invested later downstream in SAS, but some of
Guest:
it is still very much behind to what the industry require. And
Guest:
this is where companies like Stig are developing into solving
Guest:
these set of problems that are becoming more and more and more,
Guest:
you know, painful. So just by by a few examples. So implementing
Guest:
trials, how do you implement trials in the right way?
Guest:
Nowadays, people think about reverse trials, quota based
Guest:
trials, not just time based trials, do you insert credit
Guest:
card before the trial? Or you don't have to, you know that to
Guest:
begin the trial? So all these things are just trial, right?
Guest:
The the banner inside your web application, the email
Guest:
automation around the trial behavior, automation? And how do
Guest:
you let GTM teams know about the trial progress is the customer
Guest:
in the right direction within the lenses of the trial. So all
Guest:
those things are just trials in stripe, many of the things I
Guest:
just listed, they don't they don't really, you know, support
Guest:
or solve all of them out of the box. And, and this is just you
Guest:
know, a small, typical use case that comes to mind. But even
Guest:
more so like if you take it even to a more simple use cases,
Guest:
right? So when you think about pricing and packaging in
Guest:
general, the conversation doesn't begin with the ability
Guest:
to charge you first need to understand what are you charging
Guest:
for? What is your strategy, what is the value prop? What are the
Guest:
benefits of using your software versus the alternative? And all
Guest:
these questions are not, you know, payment questions or
Guest:
necessarily billing questions. These are strategy questions
Guest:
product Questions experience questions? Do we go cell
Guest:
service? Or do we do SL G? You know, do we allow in app
Guest:
upgrades and downgrades? Are you? Do you have to contact
Guest:
sales for that? Will we monetize over seats? Or over a platform
Guest:
for you and add ons? You know, how will we basically package
Guest:
our software? All these conversations are much, you
Guest:
know, ahead of thinking of how will how, let's let's go in and
Guest:
integrate stripe, typically integrating stripe and what
Guest:
comes after we made those decisions that we made some
Guest:
bets. I don't know if that was helpful, by the way, leave and
Guest:
I'm happy to kind of elaborate more into that.
Lee Atchison:
It absolutely does. And, you know, if I could
Lee Atchison:
maybe try and put a, you know, just a 10 or 20 or 100. word
Lee Atchison:
summary, on, on on what you're saying is, you provide a layer
Lee Atchison:
on top of stripe, that handles things like entitlements,
Lee Atchison:
resources, but also the the different motions for how you
Lee Atchison:
convert people into real customers. You know, Stripe does
Lee Atchison:
simple trial models, but there's 100 different ways to do trial
Lee Atchison:
models, 100 different ways to do things like free tiers and
Lee Atchison:
resource allocation limits and soft limits versus hard limits.
Lee Atchison:
And, and you know, when do you call the customer? When do you
Lee Atchison:
email the customer? When do you stop the customer cold? Those
Lee Atchison:
sorts of decisions are all part of a layer that's well above
Lee Atchison:
stripe, and it's in this area of entitlement management layer. So
Lee Atchison:
you provide that so that a application just has to do
Lee Atchison:
things like, Well, I just use 10 megabytes of the user space. I
Lee Atchison:
don't know if he's, if he's got it or not you take care of it.
Lee Atchison:
Oh, does he have it? Yes, he does fine. No problem. You know,
Lee Atchison:
and that sort of thing is all the application has to deal
Lee Atchison:
with. And what that means is, are all things that you deal
Lee Atchison:
with?
Guest:
Yeah, I think you you've nailed it. Even piggyback on
Guest:
that. And I know, and I'll say there are two basic main ways to
Guest:
think about steak one way is the engineering standpoint, and the
Guest:
other is the business standpoint, from the engineering
Guest:
and architectural standpoint. Yes, it's by its score, and
Guest:
entitlement. We like to think about ourselves as like an API
Guest:
for pricing and packaging includes endpoint for
Guest:
entitlements the SDK is the widgets library includes a lot
Guest:
of things that are helping you basically launch faster and you
Guest:
know, build without writing a lot of code to build that pieces
Guest:
of your software. The, if you were not using something like
Guest:
steak, and you were going all the way just directly
Guest:
integrating with stripe, you would have to build this piece
Guest:
of your software yourself. So it's important to call out that
Guest:
it's not like we are like, sprinkle on top right? If you
Guest:
want to integrate stripe in 2023, and you want to go to
Guest:
market in the SAS world, whether you're doing self service
Guest:
trials, usage based pricing, subscription model platform fee,
Guest:
no matter the way you're going to market. It's either you're
Guest:
building it yourself, or you're taking an off the shelf
Guest:
solution. But it's not being solved by stripe in any way. You
Guest:
don't have entitlement management, in stripe,
Guest:
everything that it is related to usage based ingestion, real time
Guest:
event, streaming, everything that is related to aggregations,
Guest:
and you know, basically reporting usage for billing
Guest:
purposes. All these things are not being solved today by the
Guest:
stripes of the world. And so stick is essentially an API that
Guest:
sits between your web application and the business
Guest:
application. And it helps you manage all that. And by the way,
Guest:
it's thing is not just working, integrating once, right, like we
Guest:
do either billing solutions as well. When it comes to going to
Guest:
market, you want to have more options, your customers wants
Guest:
want more options. And so if you're locked to what the
Guest:
current billing setup allows you that it's going to be extremely
Guest:
painful to be nimble and move. For instance, if if you're going
Guest:
to market in a subscription model, and you have a really
Guest:
strong competition coming into the market with a usage based
Guest:
and you're locked to a billing solution that doesn't allow
Guest:
usage based model. Now you have a real problem in your end,
Guest:
because you might be losing and bleeding out customers to
Guest:
competition based on a GTM model. So that's that's a big
Guest:
deal. And yeah, and so stick basically allows you that
Guest:
nimbleness and speed in that in that regard.
Lee Atchison:
And I think that's actually you hit the nail on the
Lee Atchison:
head of the problem that you and I were both facing at New Relic
Lee Atchison:
is that the nimbleness wasn't there in the system, this system
Lee Atchison:
worked fine, but when we wanted to change the model, to in my
Lee Atchison:
case to add new sales motions and to get ready for going
Lee Atchison:
public and in your case, when you're a new product Offering
Lee Atchison:
was added into the mix. It just wasn't designed to be extended.
Lee Atchison:
And so it was built for what it was designed to do, and nothing
Lee Atchison:
more. And it wasn't designed to be extended. Now something like
Lee Atchison:
steaks. You know, it's I don't want to oversimplify it. But
Lee Atchison:
it's, it's a configuration change to change price.
Guest:
No, no oversimplify actually.
Lee Atchison:
What it is, yeah,
Guest:
that's what it is. That's, that's what it isn't
Guest:
actually like oversimplifying because I like to be very, you
Guest:
know, very specific about what we do. But the end of the day
Guest:
entitlements is, is a configuration we want. There are
Guest:
ways and faster ways to control that configuration. We want
Guest:
observability we want auditing tools, we want the ability to
Guest:
control safely how we enable more, we want to be flexible.
Guest:
And we want to remove a lot of this work from our engineering
Guest:
teams, so they can focus on creating high value. So so so
Guest:
yes, 100%. Exactly that.
Lee Atchison:
I imagine there are hundreds of different
Lee Atchison:
pricing models. Certainly, I've seen hundreds of different
Lee Atchison:
pricing models across the internet, I'm sure you have to
Lee Atchison:
there's there's a lot of different ways to do pricing and
Lee Atchison:
packaging for SaaS applications that you just boggles the mind
Lee Atchison:
the number of variations and creativity that people have. I
Lee Atchison:
think everybody, but I get your point there. Yeah. But what do
Lee Atchison:
you find is, in the world of the customers, you've talked to you
Lee Atchison:
what's the most common or the most used? What's the most
Lee Atchison:
prevalent types of pricing models in the industry today?
Lee Atchison:
And how do you think that's changed?
Guest:
Okay, cool. So, by the way, as a side sidebar
Guest:
conversation, we actually released two completely free
Guest:
completely open data applications that you can opt
Guest:
into to actually learn more about the exact question, one we
Guest:
call pricing dot quest. So if you hit pricing dot quest, we
Guest:
basically captured all the pricing changes and pricing
Guest:
pages that some of the top Sass companies out there has done
Guest:
including the actual historical pricing pages. And we've
Guest:
analyzed that in in comparison to ARL and, and the speed of
Guest:
changes. And basically, like we've took all the ones that
Guest:
made the most changes, the faster cadence like faster is
Guest:
faster intervals. So check it out, it's very helpful. And the
Guest:
secondary source is GTM. We call it GTM. Explorer. Honestly, it's
Guest:
an air table. But that airtable is pretty neat. Because early
Guest:
days in when we started to build stick, we basically research, I
Guest:
think it was like 137, or something like that. pricing
Guest:
pages all across the industry of all of all stages, SAS companies
Guest:
at various stages. And it's like a summarized aggregated
Guest:
information on what did we learn on pricing, among others? How do
Guest:
people go to market and etc. Now,
Lee Atchison:
I'll put those links into the show notes too.
Lee Atchison:
So if you Yeah, listen to this podcast, check out the show
Lee Atchison:
notes. And you can click the links there.
Guest:
So now to your question. So it depending if you ask the
Guest:
founders, so you ask the VCs, and I'll explain. So VCs will
Guest:
tell you that usage based model is the most prominent nowadays
Guest:
and everyone are all about usage base and like subscription
Guest:
minute you know, subscription model is dead, long live the new
Guest:
king Long live, you know, usage based not. If you ask founders,
Guest:
I think you will hear something a little bit different. And if
Guest:
you ask bias, you're able to hear something completely
Guest:
different. What I mean by that is the industry is definitely
Guest:
making a push towards usage based model. The problem is that
Guest:
if you ask folks what is usage based model to them, you will
Guest:
you will hear folks saying that slack is usage based model AWS
Guest:
is usage based model Algolia is usage based model and data dog
Guest:
is usage based model. And the problem is each one of the
Guest:
companies I just described are completely something different.
Guest:
And so the thing is, you know, if you go back into the theory
Guest:
into the academy books, right, go back into the pricing
Guest:
conversation. When you build packaging, and you build
Guest:
pricing, one of the early things to think about is what is the
Guest:
value metric? What is the thing that I'm trying charging for it
Guest:
has to be like, like a variable that I can monetize on. And so
Guest:
almost every pricing, even in the subscription world, even in
Guest:
the Zuora world, there was always some variable. It could
Guest:
be seats, it could be storage units, it could be something
Guest:
else but there was always a valuable and so calling these
Guest:
things usage based is less saying everything is usage
Guest:
based. So it's like saying everything and nothing all at
Guest:
the same time. And so I would say this Do you definitely see
Guest:
the developer tools and infrastructure solutions or
Guest:
paths or Yes, they will incline towards the Pay As You Go model,
Guest:
which is what I would call, you know, usage based model like pay
Guest:
as you go where AWS being a typical, exactly, exactly. And
Guest:
it makes sense why because there is tied directly to the cost. So
Guest:
there is a certain margin that you want to keep on top of the
Guest:
cost at all times. And this is why the Databricks is and the
Guest:
snowflakes and the AWS is of the world, you know, this model
Guest:
makes sense. And also for the customer, there is some logic
Guest:
that, you know, I'm paying from what I'm using, right? It's,
Guest:
it's an infrastructure, and even if you go early 2021, this model
Guest:
was sold to founders is like the silver bullet, it's always
Guest:
everything, you just do pay as you go, it's always everything.
Guest:
And you know, as everything in life, you know, it all matters
Guest:
of you know, you know, when you choose a framework, you need to
Guest:
you need to employ the framework in the right context in the
Guest:
right, you know, setup. And so, you know, you can just skip or
Guest:
short circuit, thinking about the basics, what is my business?
Guest:
What is the value? What is the willingness to pay? Have my ICP
Guest:
my ideal client profile? Who are the personas that you know, who
Guest:
is buying my software? Who is using my software? And so all
Guest:
these questions, all
Lee Atchison:
those are independent variables from Yes,
Guest:
yeah, yeah. Yeah. And you know, who is pulling, you know,
Guest:
but whose budget is this coming from? And all these questions
Guest:
will help, you know, will help you think about your pricing
Guest:
more so then, you know, one model over the other, and then
Guest:
you can start thinking about, Okay, this model fits more to
Guest:
what I'm trying to do. You know, my persona is not used to, you
Guest:
know, to buy software in a pay as you go model. So this will
Guest:
not work. So, what you end up with people saying they're going
Guest:
to market based on your usage base, but ultimately, when they
Guest:
close the deal, they give a regular subscription. So
Lee Atchison:
you look at the largest AWS enterprise deals,
Lee Atchison:
and the vast majority of the costs are prepaid expenses,
Lee Atchison:
prepaid commitments,
Guest:
even stripe, are doing pre, you know, I mean, they have
Guest:
their regular you know, pay as you go model where it's like
Guest:
part of the transaction, they'd have show model. With big deals,
Guest:
they don't do that they do. Pre commitments, they do SAS, they
Guest:
do other things. You need to be able to think about your pricing
Guest:
in a way that fits, who are you're selling to.
Lee Atchison:
That's great, I was actually a much better
Lee Atchison:
answer than I was expecting.
Guest:
Giving you a heads up, my team knows that that I can speak
Guest:
until it until eternity. So
Lee Atchison:
end up being a little bit longer episode, but I
Lee Atchison:
think it's definitely going to be worth it. Because that was a
Lee Atchison:
great answer. And I love that. So what a parallel question to
Lee Atchison:
you know, what's the most popular model is what's the most
Lee Atchison:
asked for change? What what do you hear the most from your
Lee Atchison:
customers? And this could be, you know, trends to the future.
Lee Atchison:
It could be just things you haven't done yet. That's fine.
Lee Atchison:
But But what do you hear from your customers the most as far
Lee Atchison:
as what they want to hear from you?
Guest:
Okay. So it varies between the different segments
Guest:
or split it into early stage, growth stage. And then, you
Guest:
know, let's call them like, later stage, which is like, pre
Guest:
post IPO. So, so you see different things. So. And also,
Guest:
by the way, it's very much tied to macro dynamics, like
Guest:
macroeconomics. So I'll give an example right after the
Guest:
downturn, right after the downturn, we've saw a wave, you
Guest:
know, folks knocking on our doors and say, Hey, door, we
Guest:
need to monetize tomorrow, especially like early stage
Guest:
companies. There was a lot of like a round sometimes even be
Guest:
around companies that they're still not monetizing yet, at the
Guest:
time. And they basically realize that revenue efficiencies King
Guest:
is the new king, and they need to monetize right away. So we
Guest:
saw a huge trend, away from plg motion, and away from freemium
Guest:
into the realm of sales, sales lead concepts. And that was
Guest:
interesting. 21 2000 that was, that was like June of two, I
Guest:
guess. Yeah. June to June 22. Yeah. Okay. Yeah. June 22. And
Guest:
their main reason was, like people went away from from some
Guest:
of those big motions is, they take they take, they require a
Guest:
lot of time and cost to build the right way. In terms of
Guest:
internal teams processes, how do you nail down your freemium
Guest:
strategy? How do you nail down you know, usage based models and
Guest:
so people just literally just went away from that because they
Guest:
needed to show revenue yesterday. So one of the major
Guest:
changes we saw in the early stages like, hey, we need to
Guest:
launch pricing, you need to be super simple needs to be
Guest:
tomorrow. And it needs to be all about revenue, like cells like
Guest:
ASBs, high ESPYS. We're dropping our plg is like something I've
Guest:
heard, like so many times in the last six months. The second
Guest:
thing I saw on the growth stages,
Lee Atchison:
you think it was all economy? Or do you think
Lee Atchison:
there was also the reengagement of the Salesforce post pandemic,
Lee Atchison:
there's now suddenly a Salesforce that's available that
Lee Atchison:
wasn't available during the pandemic. So
Guest:
it's interesting, you know, it's a good call out,
Guest:
maybe that's also related, I felt merely from my humble point
Guest:
of view, you know, based on the deals that I'm doing with steak,
Guest:
that we suddenly saw a car customers that were planning to
Guest:
do plg, they decided to drop it or deprioritize it, and
Guest:
customers that were already doing plg decided to move into
Guest:
sales, that motion book a demo, you know, hire sales team, and
Guest:
whatnot. And that was interesting, because I felt
Guest:
like, definitely we see how being agile and being nimble
Guest:
matters. Because you don't know what will happen. You need to be
Guest:
able to respond to buyers traits. And, you know, companies
Guest:
wanting more, you know, go to market with more options. So for
Guest:
us for Stig, it wasn't, it was a good surprise, in a sense,
Guest:
right? Because it proves your value statement. Yeah, that we
Guest:
always insisted that it's not about one size fits all, we
Guest:
always said that from the get go. It's all about flexibility,
Guest:
speed. And nimbleness always was the way we saw the market. So
Guest:
that was one thing. On the later stages, we were seeing a lot of
Guest:
will nowadays for international expansion. We also seeing like
Guest:
repackaging either existing products or new, new offers. So
Guest:
I'll give an example. Let's say you acquired a new company, and
Guest:
a company, or you you've been building some in new
Guest:
functionalities or capabilities in a certain space. So sometimes
Guest:
it makes sense to repackage the way you go to market with that
Guest:
new offer to introduce cross sell or upsell opportunities,
Guest:
and that's something that you see a lot on the ground and the
Guest:
growth stage. So we've seen a lot of that. What else? Yeah,
Guest:
there's always like the most common use case for us is like,
Guest:
hey, we want to do self service, or hey, we want to do freemium,
Guest:
and help us introduce that.
Lee Atchison:
There's Hassan is the co founder and CEO stake, an
Lee Atchison:
easy to implement headless pricing and packaging platform.
Lee Atchison:
Dora, thank you so much for joining me today on modern
Lee Atchison:
digital business.
Guest:
Thank you, Lee.
Lee Atchison:
Thank you for tuning in to modern digital
Lee Atchison:
business. This podcast exists because of the support of you,
Lee Atchison:
my listeners. If you enjoy what you hear, please, please leave a
Lee Atchison:
review on Apple podcasts, or directly in our website at
Lee Atchison:
mdb.fm/reviews. If you'd like to suggest a topic for an episode,
Lee Atchison:
or you're interested in becoming a guest, please contact me
Lee Atchison:
directly by sending me a message at mdb.fm/contact. And if you'd
Lee Atchison:
like to record a quick question or comment, click the Microphone
Lee Atchison:
icon in the lower right hand corner of our website. Your
Lee Atchison:
recording might be featured on a future episode. Make sure you
Lee Atchison:
get every new episode when they become available. Click
Lee Atchison:
subscribe and your favorite podcast player or check out our
Lee Atchison:
website@mdb.fm If you want to learn more from me to check out
Lee Atchison:
one of my books, courses or articles by going to Lee
Lee Atchison:
atchison.com. And all of these links are included in the show
Lee Atchison:
notes. Thank you for listening and welcome to the world of the
Dor Sasson
Co-founder & CEO
Dor is the Co-founder and CEO of Stigg, an easy-to-implement, headless pricing & packaging platform. Our APIs & SDKs help developers to launch pricing plans faster and to build better buying experiences. Prior to founding Stigg, he was a product manager at New Relic, and a product manager at SignifAI, building in the AI/ML space.
Listen On