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Ask HN: Are SaaS free tiers disappearing?

6 points by throwawayapples ↗ HN
Userify is decreasing their free tier from 20 servers to only 5 servers, which represents a 75% drop in how many servers you can manage SSH keys on with a free plan.

Are other companies doing this too, and does it really make sense? Isn't there a significant marketing benefit to generous free tiers?

7 comments

[ 15.6 ms ] story [ 204 ms ] thread
dataminded
Frequently, no. Most companies with 20 servers aren't going to turn into 2000 server companies. A lot of companies with 20 servers are very immature, needy and demanding. It isn't worth the effort to continue support for non-customers that don't pay today and won't pay tomorrow.
throwawayapples
> Most companies with 20 servers aren't going to turn into 2000 server companies.

But companies with 20 servers might actually turn into 2000 server companies once they close their seed round or series A, and you risk throwing out those lottery tickets.

It might follow a power-law distribution like with venture capital in general - one blow-out success to cover the ten lesser investments.

dataminded
But it is unlikely and is often VERY expensive to support. Small companies are often immature and unsophisticated. They will drown customer service, bad mouth your tech due to their poor implementations and distract you from serving enterprise customers. This is why many enterprise solutions have zero small business offering, the businesses are very different.

If you are huge and able to run an SMB play or if you can attach to an accelerator and do this for qualified leads, sure.

quickthrower2
Except they might be playing the thrift game then move to AWS or whatever when they get funding.
rozenmd
Indeed.

I recently hid the free tier on OnlineOrNot's marketing website as an experiment, since then my sign-up rate has decreased, but those signing up are more likely to use a business email, and actually start monitoring their APIs and create a status page.

Having a free tier has been great for word of mouth, but the quality of "customer" it brings is so low on average that I'm wondering if its worth it.

rman666
Yes, because times are tough and startups need to focus on serious customers.
muzani
In my experience, 80/20 rule applies. Over 80% of free tier people bring in less than 20% of the income but cause 80% of the problems. If there's a subreddit, frequently it will be swarmed by people who demand cheaper and freer tiers. The longer your free tier, the more of those types swarm. OpenAI forums were very chill before ChatGPT, and the paid products like plugins remain relatively chill.

I'm not sure if there's a marketing benefit, but free tiers seem to have very low ROI. It attracts lots of tire kickers, the kind of people whose full time job is to evaluate cheaper tools, even if they do 10x less than the ones that cost a little more. It's the kind of thing you do when you need the numbers (e.g. Facebook or a MMO), where the users are also the product. Or if you've completely tapped out other channels.

However, if you haven't proven yourself enough to make the sale, they're a good tool. But generally, the people who are facing the problem the most are already spending a good sum on their own hacky solution, and happy to pay even for a small chance to make things better.