In what way? Companies drop/move on from small customers all the time as positions and analysis changes. $5 a month might make sense now, but with thin profits, a lower than predicted "upgrade rate" and maybe a higher than anticipated support cost etc and this becomes a less profitable option without price increases, which loses customers causing more increases because of none scalable costs etc.
Throw in a change of leadership or business focus and it's an easy short term boost to drop the many smaller customers and focus on the big fish who make the real money.
It's a common pattern, echoed over many industries, and while you might not see it being likely here right now, if the concept literally doesn't make sense to you, you need to look up some basic business ideas because it's a pretty valid concern.
It's easier to pull the rug out from under a group of customers who earn you 5% of your revenue than it is to do the same thing to a group of customers who make you 25% of your revenue.
This small $5 plan is obviously not going to make Planetscale very much revenue.
You were buying flow for your sales funnel with a free plan now you want to attract users with a low tier plan. Your reputation was hurt with the first rug pull so why be surprised that users expect another rug pull from you in the future?
If a free plan attracts users that can be upsold is that free plan not profitable _vs_ paying for advertising?
If such upselling is done via rug pull tactics it damages your reputation vs never having a free plan in the first place.
If a new bank offered you free or discounted banking would you move over your accounts and payments and credit cards? What if that bank has a reputation for upselling via rug pulling?
For users the cost of switching can mean that services that are free or cheap are not worth it if they are expecting a rug pull.
I agree, removing the free plan was a bad move. They should have at least grandfathered existing free tier users. I was just explaining their point of view.
When you don't need advertising anymore, the free plan starts becoming a net loss. If the $5 plan is profitable today, it will probably stay profitable forever as their costs will only go down, never up. There is little incentive to remove it (until Broadcom or Oracle acquires them).
You did a good job explaining their view. What I am doing is explaining the view of users and judging by your last post I have not yet done a good job so let me try again:
If elimination of a service plan is expected to push enough users to a _more_ profitable service plan why would a business not do it? Does it matter if the plan to be eliminated, generates _some_ profit?
In what way? Companies drop/move on from small customers all the time as positions and analysis changes. $5 a month might make sense now, but with thin profits, a lower than predicted "upgrade rate" and maybe a higher than anticipated support cost etc and this becomes a less profitable option without price increases, which loses customers causing more increases because of none scalable costs etc.
Throw in a change of leadership or business focus and it's an easy short term boost to drop the many smaller customers and focus on the big fish who make the real money.
It's a common pattern, echoed over many industries, and while you might not see it being likely here right now, if the concept literally doesn't make sense to you, you need to look up some basic business ideas because it's a pretty valid concern.
It's easier to pull the rug out from under a group of customers who earn you 5% of your revenue than it is to do the same thing to a group of customers who make you 25% of your revenue.
This small $5 plan is obviously not going to make Planetscale very much revenue.
It's not made to make money, but to funnel paid customers onto their platform.
but its entry level pricing for customers that grow. it will be great for us. there is no point hurting our reputation and slowing growth.
You were buying flow for your sales funnel with a free plan now you want to attract users with a low tier plan. Your reputation was hurt with the first rug pull so why be surprised that users expect another rug pull from you in the future?
I think what Sam means is $5/mo is already profitable for them. Free plan wasn't.
If a free plan attracts users that can be upsold is that free plan not profitable _vs_ paying for advertising?
If such upselling is done via rug pull tactics it damages your reputation vs never having a free plan in the first place.
If a new bank offered you free or discounted banking would you move over your accounts and payments and credit cards? What if that bank has a reputation for upselling via rug pulling?
For users the cost of switching can mean that services that are free or cheap are not worth it if they are expecting a rug pull.
I agree, removing the free plan was a bad move. They should have at least grandfathered existing free tier users. I was just explaining their point of view.
When you don't need advertising anymore, the free plan starts becoming a net loss. If the $5 plan is profitable today, it will probably stay profitable forever as their costs will only go down, never up. There is little incentive to remove it (until Broadcom or Oracle acquires them).
You did a good job explaining their view. What I am doing is explaining the view of users and judging by your last post I have not yet done a good job so let me try again:
If elimination of a service plan is expected to push enough users to a _more_ profitable service plan why would a business not do it? Does it matter if the plan to be eliminated, generates _some_ profit?
Hope this helps!