Pay What You Want Pricing

By Bjarni Rúnar 2012-04-15, 14:51

Today we launch our new pricing scheme, Pay What You Want. Highlights:

• The suggested price for basic service is: $3 USD/month
• There is a limited free option for non-commercial users
• Transfer quota (bandwidth) is now very cheap

There are also some new restrictions:

• Accounts are renewed on a monthly basis (multiple months can be purchased up-front)
• There is a limit on how many simultaneous PageKite connections can be active for each account

Over the course of the next few days we will be migrating our existing users to the new scheme, which means we will be adding (generous!) time limits to all accounts and increasing the transfer quotas for all paying customers to match our new rates. We will e-mail every affected user a description of what has changed.

We are also working on updating our FAQ pages and on-line documentation.

Why the change?

Starting a new business and providing a new kind of service is an ongoing learning experience.

One of the things we have learned during the past few months, is that the value of the PageKite service varies greatly from person to person. For some, it is just a toy. For many, it has become a critical part of how they do their jobs. For others, it is somewhere in between. By letting you Pay What You Want, we are letting you tell us how much it is worth to you. We trust our users and know they will fairly compensate us for our work.

But that's not all... we also came to realize that our old pricing had some pretty fundamental flaws.

In case you are new here, the old scheme was like this: you bought a fixed amount of transfer quota (bandwidth) and used PageKite until it ran out. Then you bought more. Simple, right?

As it turns out, the old pricing was actually horribly complicated in practice. The fact is, very few people really know how much traffic their websites generate. Even worse, for some sites it may not even be under the owner's control. This made the cost of using PageKite very unpredictable, even though it was quite cheap for most people. By dramatically increasing the bandwidth allocations and instead charging money for a more traditional monthly subscription model, this uncertainty should be eliminated.

We also considered it a flaw that PageKite bandwidth was too expensive to allow for innovative applications such as audio streaming or personal cloud storage. The new pricing fixes that - clever hackers should now (for a modest price) be able to stream audio over PageKite from home to wherever they have an Internet connection!

Here are a few other things we hope to fix:

• The monthly bandwidth overhead was confusing.
• The trial period was (in practice) far too long.
• Managing pay-as-you-go accounts for a whole team of developers was not very convenient for businesses.

The Pay What You Want model addresses most of these issues. The final point, the needs of our professional users, will be addressed by the second phase of pricing changes: on May 1st we will launch our Group and Embedded Subscription plans.

Making it work: making it fun?

Once we realized that our prices needed to change, well, then it was just a matter of getting it done!

Unfortunately, that was not only complicated due to some technical debt we had to sort out first, but it was also really quite boring. When things are boring, it can be hard to build up the momentum needed to get them finished. Pricing felt boring.

As a result, development went very slowly. We paid our technical debt, redid the user account pages, laid the groundwork for the necessary changes... but the whole project just seemed to be taking forever. Then, a couple of weeks ago, we thought of representing the Pay What You Want scheme with a slider and connecting that with with two dynamically updated columns for stuff you get vs. stuff we get. Our mood changed. Suddenly it wasn't just a pricing page. It was a game.

Not boring!

Ewelina dived into improving her gimp skills and editing the we get pictures (almost all the images are either from our own private photo album or taken from Public Domain sources online). Meanwhile, I hammered out code and together we talked to friends and customers and brainstormed about price points and prizes. We even celebrated the holidays by adding an Easter Egg to the slider!

We're inordinately happy with the result and I keep having to resist the urge to go back and play with the slider and chuckle at our little jokes.

It's not all fun and games though, the we get column in particular does serve a purpose - selling intangible services over the Internet can be quite difficult. People are so used to ads paying for everything they do online, that virtually everyone has internalized the message that online = free. We are hoping that relating our prices to actual items that people buy on a daily basis will counteract that somewhat. Maybe it will even encourage people to not just opt for the cheapest plan possible.

We'll see how that goes! But even if it fails, at least it's not boring.

Another fun, but experimental, aspect of this is the free option. Old-timers (like me) may remember the early and pre-Internet days of consumer software, when many indie developers distributed their wares as shareware: it was free of charge and free to copy, but the authors made money by appealing to people's honesty. It was in many ways a nice and friendly way to sell and buy software. The new Feeling Broke? option harkens back to those ideas, but with a modern twist: if people don't want to pay, for whatever reason, we ask them to instead leave us a friendly message.

Of course, if everyone chooses the free option, we may have to come up with some other solution. But for now we're optimistic that won't be a problem and are looking forward to reading our "freemail".

We figure we'll give it the summer and see how it all works out.

But what do you think? Please feel free to discuss the changes on Hacker News or in the comments below.