The first pricing decisions for a new SaaS

The unit matters more than the number

You can change a price. Changing what you charge for means rebuilding billing, rewriting the pricing page and renegotiating with existing customers. Spend the time on the unit.

A good unit rises as the customer gets more out of the product. Seats work when more people using it means more value. Volume works when usage tracks outcomes. Charging for something that only reflects your own cost, like storage or compute, puts you in an argument about your margins rather than their results.

Have a free tier only if it does a job

A free tier is worth its cost when it removes a real barrier to trying, or when free users make the product better for paying ones. If it does neither, it is a discount to people who were never going to pay, funded by the people who do.

Three practical rules

Make the upgrade trigger obvious. Users should be able to predict what will push them into the next tier. Surprise bills produce churn and complaints.

Do not price your only differentiator into the top tier alone. If the reason to choose you is invisible until someone pays the most, most people never see it.

Write down what a tier includes before you name it. Naming tiers first tends to produce boundaries that make sense to you and not to buyers.

Revisit once you have real usage

Early pricing is a hypothesis. After a few months of real accounts you will see which customers get the most value and whether your unit tracks it. That is the moment to adjust, while the number of affected customers is still small.