[voisin]

Pay as you Go scales until there is enough loyalty and demand that your users opt for a monthly fee to save money. By forcing everyone to a monthly fee you alienate a ton of users that want to use your service but not enough to need a subscription.

[nojito]

Again this isn’t true.

Pay as you go is a terrible decision to make and you see you all the time you it’s VC backed startups.

They are often forced to revamp their offerings down the line to a monthly fee.

[melony]

The only ones you alienate are penny pinching HN users.

[voisin]

I hope you are being sarcastic. I’ll give two examples: about twice a year I need to (a) send something for signature digitally or (b) send something digitally to a fax number. If I can pay $2-10 for this, I will in a heartbeat and move forward. But it seems every provider wants me to sign up for a monthly plan as if these irregular needs will magically become regular. So instead I waste a ton of time driving to the library to use their fax machine or mailing a paper copy of my signature to someone. I would rather pay a premium to use something every now and then, but I won’t agree to subscribe. If these ever became more than irregular needs I would gladly subscribe to get a lower price per use.

I bet there are orders of magnitude more users like me, the sum of which would be a sizeable market. But instead every SAAS provider is focused only on regular monthly users, ignoring this shadow market. But it is a false dichotomy. Make it highly profitable but not scalable to do Pay as you Go, and then less profitable but scalable to go monthly. Do both.