I don’t subscribe to the “everything muse be free” meme that basically ignores the intrinsic value a product or service gives you. If a product or service provides me with a real value then I am happy to pay for it – either through purchase/subscription or from being monetized via ads/usage data etc.
But I’m surprised at just how expensive some of the darlings of the Web2.0 SaaS era work out to be when used at scale.
Like a crack dealer, giving you the first hit free, most of them offer a “free” plan that is clearly designed to be severely limited the moment things begin to work out for you and your business takes off. There’s nothing new with this way of doing business, but have you seen just how much your hits costs once you get addicted?
Time tracking service Harvest starts out at $12/month ($144/year) for a single user but at Swordfish Corp there are now three of us, requiring the 5 user plan @ $40/month ($480/year). Not much change short of $500 seems pretty expensive for a year of time tracking.
Invoicing service Freshbooks has a free and slightly limited option for individuals but a company of three would need to use the 3-staff plan @ $39/month ($468/year) but I notice that once we take on a fourth person we would need to skip to the 10-staff plan @ a jaw-dropping $89/month ($1068/year).
When researching these plans, I’m also considering what my future business needs are. With services like these, I want to pick providers who can scale with me as my business (hopefully) grows.
I should point out that one way of getting around this is to share accounts, but for time tracking this doesn’t work and for invoicing, everyone at Swordfish does their own invoicing on their client accounts.
Now, I’m not against paying for these kinds of services in general. Between myself (personally) and Swordfish, I have paid subscriptions to NolaPro (Hosted accounts package), Shoeboxed (receipt and business card data entry) and Flickr.
And I’m not saying that it’s not worth $480 a year to the company for good time tracking. I’m just saying I’m not sure a service like Harvest is offering me $480 of value a year over and above using a simple Google Spreadsheet created in 20 minutes, for free, and shared within the company.
I’m a fan of the Freemium model, but if it’s going to work the numbers can’t exponentially increase as your usage increases – it’s not fair (a form of bait-&-switch from the free accounts) and it’s also not reflective of the true cost of SasS where the cost should exponentially flatten out at scale.Read More