The pricing strategy that added $1.5m in 12 months

Hello and welcome to 1,2,3 Product Weekly - read by startup founders, creators, and product marketers looking to constantly learn. Support on Patreon and get weekly resources directly in your inbox.

To new subscribers, welcome onboard, and thank you.

Here is what to expect in this Saturday’s newsletter:

• Dreamdata’s genius pricing

• Power of strong customer relationships

• Hubstaff, Coro, Gellify

1/

Dreamdata’s pricing strategy added $1.5m in 12 months

Over the past two months, have been looking at almost a hundred pricing pages across different SaaS categories for a startup we are working on with my business partners.

One key metric keeps cropping up from the research - your pricing is correlative to your revenue and its growth.

Picking your startup pricing model can build or break your startup in the long run. However, the underlying strategy is that it should be dynamic through constant experimentation.

Yesterday I was listening to Nathan Latka interviewing Lars Gronnegard - co-founder of Dreamdata, and my takeaway is their genius pricing strategy.

In fact, their complex pricing ( landing page below) has added $1.5m in ARR over the last 12 months - a 100% YoY growth from last year.

Using the Wayback machine, here is Dreamdata’s pricing page in 2022.

When you compare with the latest pricing page, you will notice, a couple of changes;

• More features

• Add ons

• Reduced TEAM pricing

• CTA changes to Get a Demo

Note: Lars mentioned in the call with Nathan that the above pricing upgrades are focused on MTUs (monthly tracked users) with a combination of the number of seats. Lars emphasizes pricing to extract value for customers.

Additionally, Dreamdata has an internal pricing calculator for customers that to track their upgrades, for the business - to get insights for upsellings.

2/

When strong customer relationships scale to $15m ARR

The CEO and co-founder of Text Request; Brian Elrod recently hopped on an episode on SaaS Club to share how they built the text messaging and management software to $15m over the last decade.

Brain shared several insights on the importance of hiring the right CTO when launching.

Additionally, what stood out for me was the customer relationships that scaled them from a stagnating $3m in 2020 to $15m in record time( slightly over 2 years). Here is how it went down;

Zipwip was acquired by Twilio in May 2021, and since Text Request had them as a customer, it gave them a huge boost when Twilio recommended Zipwip’s existing customers as it was shutting down its texting service.

Note: I guess they got lucky in that sense, but in the background, building strong customer relationships was key.

Product-led growth with Chrome Extension

T.LY CEO Tim Leland the Link management service URL Shortener turned down a $60k offer but built it $40k MRR with the Chrome extension.

From the discussion with Nathan Latka, another thing that stood out for me is the pricing aspect that Tim mentioned.

Tim admits that many people starting don't charge enough. Now, his startup has three tiers, the highest priced at $50/mo.
My simple takes from Tim's conversations are;

• Build a Chrome extension for your SaaS startup (it depends on your category though)

• Experiment with pricing - constantly until you reach the sweet spot.

3/

Coro

The CEO of Coro (All-in-one cyber protection software) Dror Liwer shared how they scaled to $25m ARR with strategic partnerships like master agents in their industry and becoming the cyber security provider for adjacent companies in the market) e.g. Comply Auto.

Gellify

The SaaS company doing $50m ARR with 100% YoY growth hit its first $1m in revenue by the founder making a few calls and emails. The founder of this software supporting corporate innovations built solid relationships from their previous $100m exit and the next startup growth is evident. LinkedIn post

Hubstaff

I was listening to Jared Brown, CEO of Hubstaff ( workforce management software) share growth insights. Here are my key takeaways from the $22m ARR Saas company;

1/ Heavy investment in SEO after noticing it was a 99% growth driver early on.
2/Rapid iteration and testing with experimental tools like Mixpanel.
3/Integrating product-led growth into their product roadmap like giving away the product to allow customers to invite their team members and try it out.

Thank you for reading!

God’s speed.

Okerosi