Monetizing SaaS: Episode 8 with Pat Doran, Head of Revenue at PriceIntelligently by Paddle

In this conversation, Fynn and Pat Doran discuss the complexities of pricing and packaging in the software industry. Pat shares his insights from working with numerous SaaS companies and highlights the common mistakes made at different stages of growth. They also touch on the importance of data-driven decision-making and the need for a consistent pricing committee. Pat emphasizes the value of building a sound tech stack to support flexible control over pricing & packaging as a company evolves and and recommends quarterly evaluations to continually improve pricing strategies.
Takeaways
- Pricing and packaging in the software industry can be complex due to the many levers to pull and vectors of value to consider.
- Early-stage companies often make the mistake of not focusing enough on pricing and undervaluing their products, leaving money on the table and conditioning buyers to expect more for less.
- Growth-stage companies face challenges such as internal inertia, complexity, and the need to cut through the noise of multiple opinions.
- Data-driven decision-making is crucial at this stage.
- To continually improve pricing and packaging, companies should invest in a sound tech stack, establish a consistent pricing committee, and conduct quarterly evaluations.
- Building a pricing committee and having a consistent meeting cadence can help ensure that pricing decisions are made with input from various stakeholders and reflect the value of the business.
Sound Bites
"If you're not waking up every day, cold sweats, thinking about AI and how it's going to disrupt your business or how you'll use it to disrupt someone else, you're probably shot."
"If you don't have an eye towards profitability, you're also probably behind the eight ball."
"The most common value metrics we see are per seat, per user, and usage levels such as number of gigs, videos, or projects."
Chapters
00:00
Introduction and Recording
03:20
Market Inflections and Trends
06:12
Monetizing Software: Operational Complexity
09:00
Value Metrics and Pricing Models
10:45
Difference Between Pricing and Packaging
15:01
Common Mistakes in Pricing and Packaging
20:49
Mistakes and Misconceptions in Pricing
24:10
Closing Remarks and Contact Information