Amy has lots of good points, but I'm of the opinion that her "$30x500" premise for building a SaaS ISV is backwards. You're often better off targeting "$500x30" instead.
* Most every place that publishes stats has shown that the higher-tier plans account for the lion's share of revenue.
* A good programmer values out at $20,000/mo or above. It is not hard to create $500/mo in value (~ half-time minimum wage!) on an ongoing basis. All you have to do is step away from the computer and start talking to real people who fit your target personna.
* With the reversed formula, you can get your first few customers by cold-calling and face-to-face sales if you have to. Ramen profitable is in the neighborhood of five customers, instead of over eighty.
* You can always backfill to a smaller plan if necessary. Even targeting $100/mo makes it far easier to get initial traction.
Don't make your main target the price-conscious end of the market!
The businesses you want to do business with (e.g. not lemonade stands) aren't even capable of differentiating price points $500 and under. Like, almost literally, you can give a number in that range and they'll just hear "pocket lint."
* Most every place that publishes stats has shown that the higher-tier plans account for the lion's share of revenue.
* A good programmer values out at $20,000/mo or above. It is not hard to create $500/mo in value (~ half-time minimum wage!) on an ongoing basis. All you have to do is step away from the computer and start talking to real people who fit your target personna.
* With the reversed formula, you can get your first few customers by cold-calling and face-to-face sales if you have to. Ramen profitable is in the neighborhood of five customers, instead of over eighty.
* You can always backfill to a smaller plan if necessary. Even targeting $100/mo makes it far easier to get initial traction.
Don't make your main target the price-conscious end of the market!