[ad404b8a372f2b9]

Not related to the buyback but more generally to Readlang, how did you select the pricing?

I've noticed a sort of bimodal distribution of prices in language companies with the sleek/modern looking ones centering around 5$/month, and more traditional companies going for 20$/month for seemingly the same service (so the latter not presented as a luxury alternative to the former). Wondering if you did any A/B testing or generally what your methodology was if you don't mind sharing.

[steveridout]

Not a ton of methodology behind it!

I started at $10 per year, then gradually raised prices as the product got better, always keeping existing subscribers happy by grandfathering them. At one point it was $4.99 every 3 months, which is the plan my mum is still on :-) For a brief time I offered a lifetime subscription for $100 and sold a few but felt uncomfortable offering to keep the service running forever with no further payments so killed it.

I ended up at $5 / month or $48 / year. It's possible I might increase it a bit more in future but for now I think it's better to keep these prices and try to grow user numbers instead.

One thing I noticed with some companies was that the yearly plan was very heavily discounted compared to the monthly one. To me that gave the impression of lacking confidence that monthly users will stick around long term, so I didn't want to do that.

Yeah I think it's true that popular mainstream consumer products tend to be cheap and highly polished, and that more niche products tend to be higher priced and less polished.

[robocat]

The yearly plan is discounted because it allows self-funding and retains control, versus VC dilution. Explained here: https://youtube.com/watch?v=otbnC2zE2rw (I am not working at present, but I rewatch this every once-in-a-while because it is an amazing talk!)

[vidarh]

> One thing I noticed with some companies was that the yearly plan was very heavily discounted compared to the monthly one. To me that gave the impression of lacking confidence that monthly users will stick around long term, so I didn't want to do that.

It probably reflects reality, but I can see the point of showing lack of confidence in the product.

Not a language product, but Bumble (the dating app) at one point -- no idea if they still do it -- offered a lifetime membership priced at around 6 months of monthly subscriptions. I find looking for that kind of pricing can be highly instructive about a business and their competitive landscape, because presumably they'll have run their numbers and are expecting to earn more that way.

So it's not just signalling lack of confidence, but also giving away a very strong signal about the lifetime value of their customers.

[conradfr]

At one point my gym offered (out of the blue and only by text) lifetime membership for something like a year or two of the regular monthly price.

They folded nationwide less than ten months later.

[vidarh]

That's a good exception - if someone put of the blue appears to push a big discount, it can reflect a high cost of raising capital.

[mokkol]

I think it slightly works different with a dating app. In theory, if the app works you don’t need it anymore. So in their case, it is confident to offer a big discount.

[vidarh]

In terms of the specific, very low, multiple you're of course right - a dating app is an extreme.

But the overall principle that you should expect the discount to reflect their estimated lifetime value of a customer unless the amount is high enough that the investment return can exceed the regular income. With the exception, as noted by conradfr, that if someone suddenly offers a steep discount it could reflect an attempt to raise expensive capital fast

Assuming you're aware of those factors, it's a useful way of gaining insight into customer retention (assuming they're competent enough to run the numbers...)

[nextaccountic]

Highly polished it depends, but mainstream products certainly won't cater to the long tail of niches. Some niches are still large enough to be profitable for a smaller product, others aren't (and will hardly be supported by any product at all)