The Secret of Developer Pricing

Every startup goes through the debate of “How should we do developer pricing?”

The conversation normally goes something like this:

Person A: We need to come up a package that developers will buy!

Person B: Okay, what if we took the free version and added A, B, and C?

Person C: But developers don’t buy things!

Person A: Yes they do. They just hate sales people!

Person B: Okay, what if we took away B but added D?

Person C: But developers don’t buy things!

Person A: Don’t worry, we’ll make it self-service so they don’t have to talk to sales people!

Person B: Okay, what if we added B back in and kept D too?

Person C: This is a waste of time. Developers don’t buy things.

This goes round and round, filled with opinions, vague notions, concrete data, anecdotes, case studies, and everything in between. The conversations goes down some right paths, some wrong paths, and everyone gets frustrated. The best worst amazing part in all of this is that the overall goal and people’s underlying instincts are actually correct:

We must have developer pricing… but we don’t often understand why.

To understand WHY, let’s explore what it is in the first place.

What is Developer Pricing?

Developer pricing is a low price that lets someone get started quickly with minimal effort. In the ideal situation, you got started on a free plan, proved out your idea and now you want to go into production. In terms of features, it has more than the free tier but less than enterprise. In general, it allows a developer to pull out their credit card and upgrade in a matter of minutes.

From a cost perspective, it also serves as the middle ground. It costs something, so it’s above the free tier but is less than the enterprise tier.

And this is where we hit the misunderstanding.

Most people think developers want developer pricing because they’re cheap or want something for nothing. Or worse, sales reps think that a developer purchase is just an enterprise sale in wait and start emailing, calling, mailing them, sending singing telegrams, and all the other things that “enterprise sales reps” think are good ideas. That’s possible but unlikely because this developer doesn’t think about “the enterprise.”

Why do we have Developer Pricing?

Developer Pricing doesn’t exist because developers are cheap. While we are cheap, we’re willing to pay for tools that make our lives easier.

Developer Pricing exists for exactly two reasons:

First, we love building things.

Every developer wants to play with cool tools, solve interesting problems, and look at the result of their work and smile. It’s what drives people to try that new framework. It’s the entire reason Raspberry Pi exists. It’s what makes us work a little harder, hammer on that problem longer, celebrate when we figure it out, and spend a weekend trying out that bizarre side idea. Developer Pricing allows people to try out those tools for the first time. It lets us solve the problem in front of us and inspires us to tackle the next, harder one.

Second, we hate dealing with Procurement/Expense Reports.

I can’t state this strongly enough: developers hate paperwork. It’s busy work. It’s frustrating. We see it as the bs that gets in the way of real work and generally look down on anyone who’s primary job revolves around paperwork. We’d rather eat the cost of something than submit the expense report to get some nominal amount back. If we have to talk to someone in Procurement or Purchasing, the problem is 10x worse.

Now combine those:

The real purpose of developer pricing is to let developers build without doing paperwork.

And there’s a related corollary: The ideal price point is either a) small enough that the developer doesn’t care about, b) falls in the “petty cash” range of their company’s expense policy, or c) falls below the point where they need another level of approval.

Good luck with that.

3 thoughts on “The Secret of Developer Pricing

  1. Developers don’t buy things because developers work for companies, and companies don’t let developers buy things. So you have to sell to companies, not developers.

    If you’re selling to developers, your market is either successful developer entrepreneurs who have the time and money to buy products to make them more efficient — but don’t yet have the products they need that make them successful, which is kind of a catch 22 — or developers who are not yet successful and therefore don’t have the time any money to invest in their productivity.

    1. Unfortunately, this is wrong in a number of ways.

      Most companies beyond a handful of people have a flexible enough expense policy that developers can expense up to $50 without any real hassles and often even without a receipt. Beyond that, most departments have an education or tools budget that goes unused year after year.

      But even before that, if a developer can’t personally afford $50 to make them more effective or to scratch an itch, they have a serious problem.

      If you’re a developer in this situation, drop me a note. Everyone is hiring and I can give some good referrals.

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