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Ask HN: A new way of pricing financial software

6 points by zxcvb ↗ HN
Imagine a startup with trying to break into the financial software karket (enterprise). They target companies that are very young and can't afford the likes of Accenture or IBM.

The startup could sell the software to the company on the basis that they don't have to pay for it until the company can afford it. Obviously the term "afford it" will be defined by a lawyer so they can't make it look as if they can't afford it when they can.

Or, they could have it cost free for the first 12 months which will give them time to focus on becoming profitable. Remember, the startup is trageting startup comapanies in the financial sector.

Any thoughts?

5 comments

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noodle
you could price based on usage somehow, assuming the usage of financial software will increase when the size of the company increases. more details on a concept would probably help to produce a more detailed answer.
run4yourlives
http://www.clarityaccounting.com

http://www.blinksale.com

http://www.freshbooks.com

Now, more importantly:

The startup could sell the software to the company on the basis that they don't have to pay for it until the company can afford it.

Dude WTF? Not trying to be harsh, but this is known as guaranteeing the failure of your business. Most businesses fail. That means most businesses will never be able to "afford it". Ergo, you will never realize a vast majority of your potential revenue.

Further, your suppliers won't be as charitable as you are with your clients. You'll be paying bills to support clients that aren't giving you any money. You won't have income. You'll have increasing expenses. You'll have a disincentive to actually trying to growing your business. Disaster all around.

The goal of business is to make more money than you expend. If you want to be nice, found a charity - even then you'll need to brake even one way or another.

An overall better option would be to do as my linked examples have, and provide less of a product for less of a price. Most startups simply have no need for Accenture style services hence, they can purchase something that better fits their needs.

Do yourself a favour though and drop this "pay me when you can" idea forever. You'll have more than enough risk in managing your own profit levels, don't take responsibility for everyone else's too.

I know I'm being very direct here, but this aversion to making money is something a lot of people have, and it kills businesses every day. It's important for not just you but all of us to avoid this position whenever possible.

rrival
Doesn't freemium solve this problem?
mahmud
You're entering an up-market, please don't cheapen it with "freemium".
dobes
It's seems contradictory to say that you are targeting the "enterprise" and yet they "can't afford it". Either you're going for thrifty startups, who are not enterprises, or enterprises for whom a few thousand dollars a year is chump change.

I have seen at least one online accounting app that is "free for startups" - that is, you don't have to pay until you have a minimum amount of revenue. I think it was ClearBooks.