Pricing APIs: Pricing Sucks, Here's What We Did (Gluecon 2010)

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Slides from "Pricing APIs: Pricing Sucks, Here's What We Did" as delivered at Gluecon 2010.

also: Taking Pleasure in Merton's Law of Unintended Consequences.

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Pricing APIs: Pricing Sucks, Here's What We Did (Gluecon 2010)

  1. 1. Pricing Sucks, Here's What We Did. (or, Taking Pleasure in Merton's Law of Unintended Consequences) Troy Davis Cloudvox @troyd // @cloudvox troy@yort.com
  2. 2. @cloudvox Clue over Time - Perceived
  3. 3. @cloudvox Clue over Time - Perceived & Actual
  4. 4. @cloudvox Clue over Time - Perceived & Actual
  5. 5. @cloudvox <ul><li>What we knew </li></ul><ul><ul><li>platform not product </li></ul></ul><ul><li>  </li></ul><ul><ul><li>variable cost components </li></ul></ul><ul><ul><ul><li>costs are meaningless  </li></ul></ul></ul><ul><li>  </li></ul><ul><ul><li>existing competitor </li></ul></ul><ul><li>  </li></ul><ul><ul><li>customers willing to pay </li></ul></ul>
  6. 6. @cloudvox <ul><li>Selling 2 Services </li></ul><ul><ul><li>Feature-competitive (HTTP) </li></ul></ul><ul><li>  </li></ul><ul><ul><li>Industry-leading (Asterisk/AGI, SIP) </li></ul></ul>
  7. 7. @cloudvox <ul><li>Selling 2 Services </li></ul><ul><ul><li>Feature-competitive (HTTP)  <- 3 cents/minute </li></ul></ul><ul><li>  </li></ul><ul><ul><li>Industry-leading (Asterisk/AGI, SIP)  <- 3-6 cents/min </li></ul></ul>
  8. 8. @cloudvox <ul><li>Selling 2 Services </li></ul><ul><ul><li>Feature-competitive (HTTP)  <- 3 cents/minute </li></ul></ul><ul><li>  </li></ul><ul><ul><li>Industry-leading (Asterisk/AGI, SIP)  <- 3-6 cents/min </li></ul></ul>^ hard.
  9. 9. @cloudvox <ul><li>Variable cost component </li></ul><ul><ul><li>$X per minute </li></ul></ul><ul><ul><li>$X per customer  </li></ul></ul><ul><li>  </li></ul><ul><li>Cost, margin spreadsheets  </li></ul>
  10. 10. @cloudvox <ul><li>Variable cost component </li></ul><ul><ul><li>$X per minute </li></ul></ul><ul><ul><li>$X per customer  </li></ul></ul><ul><li>  </li></ul><ul><li>Cost, margin spreadsheets </li></ul><- mostly     accurate.      almost     useless.
  11. 11. @cloudvox Pricing Risk Tolerance over Time
  12. 12. @cloudvox adoption > upfront revenue
  13. 13. @cloudvox Subscription plans    &quot; - add a 2nd cheaper service with fewer apps, maybe with a REST API, maybe just reduced functionality. &quot;
  14. 14. @cloudvox <ul><li>Constraints - ours & customers' </li></ul><ul><ul><li>phone numbers </li></ul></ul><ul><ul><li>concurrent calls </li></ul></ul><ul><ul><li>total usage? </li></ul></ul><ul><ul><li>features only big customers need? </li></ul></ul><ul><ul><li>high-touch support? </li></ul></ul>
  15. 15. @cloudvox
  16. 16. @cloudvox complexity kills.
  17. 17. @cloudvox <ul><li>Constraints - ours & customers' </li></ul><ul><ul><li>phone numbers </li></ul></ul><ul><ul><li>concurrent calls </li></ul></ul><ul><ul><li>total usage? </li></ul></ul><ul><ul><li>features only big customers need? </li></ul></ul><ul><ul><li>high-touch support? </li></ul></ul>bad for creativity, bad for platforms. X
  18. 18. @cloudvox Price after you're live.
  19. 19. @cloudvox Price after you're live. (okay, price before, but discount 100%, do so to placate the paranoid, invest little effort, and expect to redo it 2 months later)
  20. 20. @cloudvox v2   1 price 0 monthly fees 0 choices v2 v1
  21. 21. @cloudvox <ul><li>Next Time, I'd </li></ul><ul><ul><li>launch then price </li></ul></ul><ul><ul><li>cost the complexity </li></ul></ul><ul><ul><li>give everything to everyone </li></ul></ul><ul><ul><li>price for desired behavior </li></ul></ul>
  22. 22.     Troy Davis @troyd // @cloudvox [email_address]   cloudvox.com <- Asterisk hosting & phone call API, now 3 cents per minute flat   digits.cloudvox.com <- phone number<->location & carrier API, free

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