ScreamingBox Technology & Business Rundown

Dave Erickson 0:00
You know, it's going to be big. Your SaaS product is the SaaS product to end all SaaS products. But what is the real value to your customers? What are they willing to pay for it? On this ScreamingBox podcast, we're going to determine the value of SaaS products and how to price them. Please like our podcast and subscribe to our channel to get notified when the next podcast is released.

Dave Erickson 0:42
Developing software as a service or SaaS product? The engineering is easy, but you don't know where to start on the business side. How are you going to figure out your SaaS product's value and price? Welcome to the ScreamingBox technology and business rundown podcast. In this podcast, I, Dave Erickson and my esteemed co-host Botond Seres are going to determine the value of a SaaS product with Dan Balcauski, founder and principal consultant of Product Tranquility in 2019 Dan founded Product Tranquility, where he helps high volume b2b SaaS CEOs refine pricing and packaging strategies for new products. A Toptel, certified, top 3% Product Management Professional. He also contributes to the Kellogg Executive Education course on product strategy. For over 15 years, Dan has managed products across their life cycles, from concept to end of life in industries including consumer internet, mobile, IT software and hardware serving companies from startups to multinational enterprises. Before founding Product Tranquility, Dan completed a solo around the world expedition to 21 countries where he engaged in life changing volunteer work. Previously, he was head of product at Lawn Starter, a two sided marketplace for lawn care. He was also a principal product strategist at SolarWinds, where he helped shape the growth strategies after its $4 billion acquisition. Dan, welcome to the podcast.

Dan Balcauski 2:16
Thank you for having me, Dave, I'm excited to be here.

Dave Erickson 2:20
Well, let's start at the beginning. How did you get your SaaS experience?

Dan Balcauski 2:26
With a lot of scar tissue along the way, no, I started out in the, I've been in the software world my entire career. Started off more on the builder side, writing codend back in the day when I started, there was no such thing as SaaS. It was all perpetual license. We used to take the code, once it was compiled, and burn it onto CDs and then DVDs, and actually put them into boxes and ship them to customers, a little bit different model back in the day. Ultimately, I moved away from the engineering side. I realized I decided, you know, the computer didn't care how angry I got at it, it still wouldn't run the code that I wrote for it. So I realized that I got more excited by how the products we were building created value for customers, and ultimately that, how that turned into dollars and cents for the business. So I started to pursue that path on the product management side and as well now doing my pricing consultancy. But while I was in the product management world, the entire industry went through this perpetual software to SaaS transition, and it might seem like ancient history now, if we're going back into the 2010 to 2014 era, it was a rocky transition for a lot of companies, because changing that model was not only a deployment change. We often take for granted now, if you're going to build new software, you're going to deploy it on AWS or something else; you're not going to ship software to your customer, and then they're going to provision a server and install it and, and maintain it. You're going to ask Azure or AWS or someone like that to do it. But also, combined with this business model change. And so I was leading product at a company that was a traditional perpetual license software maker that then started acquiring some SaaS companies, as well as trying to look at Can we turn some of our existing products into a more of a SaaS model? So I saw a lot of companies kind of struggle through that. And, you know, I've been involved in the software industry, like I said, the whole time through and the SaaS world for, I guess, the last, say, 12 or 13, years.

Botond Seres 4:59
Dan, Product Tranquility is such a beautiful name. How did you end up picking it?

Dan Balcauski 5:00
Yeah, thank you. I originally, when I started my consulting firm, I had this idea around product management, generally, it wasn't specifically focused on pricing, although that was one of the areas that I thought I could add value and had as a kind of sub component of my offering. So I was trying to look around things, around product management. And then, as Dave had hinted in his beautiful introduction, the around the world trip that I was a part of, I had done as part of that, a couple of extended meditation retreats during which it came to really embrace this idea of
there's never an arrival. Those of you who maybe are, have been in the software world a long time, know it's always about like, alright, let's finish this sprint, let's finish this release, let's get this feature out the door, with this idea that your mind puts in front of you when we reach that, then things will be okay, when, in fact, that that is just an illusion that your mind creates. And so the idea was, man, we are all on this treadmill in all parts of our lives. But I think particularly if you're in the software development product world, you're constantly suffering under this illusion that, like, once we get this done, then we will be there. And really it becomes more about, how do we get tranquility, peace, being okay with where we're at now and leaving that separate from where we're going to get to.

Dave Erickson 6:25
Yeah, it is two separate ideas. The software development never end so you might as well be at peace with that. Right?

In some ways, software is almost like a living thing. It's always evolving and changing, and there's always another future, and there's always something else that needs to be added, and a client needs one more thing, or a customer says it would be great if there was this. And, you know, I think that concept of product tranquility is an interesting concept, especially in the SaaS world. Maybe you can talk a little bit, you know, what is kind of the current trends or status of SaaS software now? It's been probably a good decade since it kind of came to fruition, and now it's had a little bit of time. Where is SAS kind of add and where do you think it's kind of going at this point?

Dan Balcauski 7:29
Well, if you believe Satya Nadella, you know, SaaS is really just a bunch of business logic on top of a CRUD database, so it's all going to go away and get replaced with AI agents. So I'm just, I'm just waiting for that to turn. Yeah, I guess that's 2025 that's coming. So we should all just hang up our cleats and go home. Obviously, I'm being a little facetious. You know, there's plenty of talk at the big conferences, whether you got Dreamforce Benioff or Satya at Microsoft conferences, etc, talking about the world of AI agents, and we're not going to actually have humans interacting with workflow software. Actually, the humans are all going to lose their jobs. Okay? I'll wait for that day. I don't think it's imminent. I think there are, there are many very good discussions to have about the risk of disruption to people's careers and upskilling, etc, but I don't think it's going to be directly injection of capital into the AI agents that these CEOs are putting in the…

Dave Erickson 8:26
Well, I mean, anybody, anybody who's worked with AI agents and AI in this current state realizes that they all have limits, but that's why the fully autonomous cars still keep crashing into things. Not every variation can be taken into consideration by a non thinking, non conscious agent, yeah, but we will see, I'm sure it will, you know, help in productivity, and it will help developers become more productive, productive as to taking over every developer's job, I also, like you, do not see that in the near future.

Dan Balcauski 9:17
There was a, there was quite a funny meme around that, because I don't know if you've been paying attention, but open AI took their giant infusion of cash and is now hiring react developers at $300,000 a pop, and also simultaneously saying we figured out how to build artificial super intelligence. It's only, you know, a matter of months at this point, or something to that effect, and you're like, wait, the people who are telling us we're gonna replace all the software developers who are posting all these job offers for software developers. So your actions do not match your rhetoric. And so I tend to believe what people do more so than what they say. And you know, if, if Benioff AI SDRs were actually super productive, I imagine they would just fire their entire sales team at Salesforce, because their AI SDRs are just super productive, and they, they don't need all those humans to go around talking to people anymore. But that's not what we're seeing. But no, I mean, look, there's, there's always moving pieces in the world of software. You know, I know that, you know, just it, there's so many areas we could go. I'm not sure what would be most valuable to explore, but I'm happy to talk about multiple areas of, areas of SaaS. But you know, that's definitely taking up the mind share of conversation these days, from what I could tell.

Botond Seres 10:41
Well, definitely, this whole AI revolution feels a bit like we collectively forgot about the industrial one, like people have more jobs today after the Industrial Revolution than they did before. So kind of feels like the same thing is going to happen with AI.

Dan Balcauski 10:53
Yeah, I think that there's, there's definitely that argument, you know, the question, I think, with any of these disruptions is, there will definitely be losers along the way. And how do we, you know, are we in a position where the change is happening, you know, rapidly enough that we could actually get people to rescale into new jobs. And I think, you know, you don't have to go very far to say, Okay, well, yeah, I don't know if software developers jobs are going away tomorrow. I know it was only what, five, six years ago that, you know, the Silicon Valley was telling everyone to stop going to trade school and instead go become software developers, because that was going to be the job of the future. And maybe there's some irony in the universe, but it doesn't take too long, go on Upwork and talk to anybody who has had a job as a copywriter or a long form SEO content editor, right where those people have had significant impact. And maybe you spent four years getting an English degree and polishing your writing craft. And now maybe AI can't do it as well, but I could do it 80% or 90% as well for 5% of the cost. And so you're out of luck. And so then what is that person to do? But those are larger signal questions that are well, but my pay grade, and I'm happy to engage in those conversations, I think they're important. I don't necessarily have any answers to that.

Dave Erickson 12:03
Yeah. I mean, you know, in traditional disruption timeframes, you know, there is the traditional way of doing something, and it takes a fairly long amount of time till enough of that has transitioned that the traditional way usually takes, you know, decades before it, quote, phases out. So I think for us, this concept of building a piece of software and delivering it by the cloud, technically, SaaS as a service, type of products I think are going to be here for a while. I'm talking to people who are currently building and making SaaS. They're not thinking about using AI or going in any other direction. If they use AI, it's to help them do some marketing, some productivity stuff with their, their SaaS help write some documentation. You know that that seems to be where they're going, but they're looking at developers developing the software and to continue, because they keep finding new features they need to add to their software. So, you know, I think SAS software and products are going to be around for a while, so I don't think we need to worry about that. I know several people who are in the process of building and launching SaaS products, and so it's more about, okay, how are they going to do business, right? And so I think being able to focus on that is still very valuable. And you know, AI is there, and it'll, it'll help increase productivity, I'm sure. For SaaS products, I'm sure that there are also several people out there who are developing their SaaS product, and with the dreams of it becoming the next big thing. And really the next big thing is kind of going back to this concept of, you have a product, what is it, and how are you going to make this product work in the marketplace? So maybe we can talk a little bit about that and kind of go into what are some of the kind of packaging options that a SaaS developer would have; he's got a product, you know, it tracks, you know, the corn that farmers grow, right? And they want to, they want to. It has a zillion features. How do they take that and make it a package that they can then start talking to people about, okay, here's what we're offering as a software service; this is how much it is, this is how you, you know, use it, etc. How do they start on that concept of, kind of identifying what their product actually will be of the many features and ideas that they have?

Dan Balcauski 15:16
There's so many different ways we could approach this question. I think, first of all, you know, when you have very technical teams, a lot of the focus tends to be on the technical capabilities, because that's what you're focused on, day in, day out. But for the most part, you're unless you're selling dev tools to other engineers. They are your people you're selling to are way less focused on the features than you are, almost guaranteed, even if you're in Dev Tools, almost certainly, because at some point you're probably going to have to make your business case for this purchase to the VP of engineering or the CTO or the CEO to spend money on this thing.

Dave Erickson 15:59
Yeah, it's rare that people buy feature sets. They tend to buy solutions.

Dan Balcauski 16:04
Correct. They tend to, you know, and really, they're, you know, worried about the problem that they're having to solve and, you know, when you communicate, we talk about value communication as a whole separate topic, but we talk about, you know, features. We require that customers do that translation from features to benefits to value in their head, and sometimes we learn really bad lessons from this b2c market that we're all steeped in, right? Like if I was telling you about the new digital camera on iPhone, and I told you it's 1000 megapixels, you might not have any idea that that's what that means in terms of image quality, but you could tell that's probably better than one that has 10 megapixels or one that has one megapixel, right? Why is that? It's because the camera industry has spent an enormous amount of money educating you on what a megapixel is, and so you kind of automatically do that translation in your head. So I would say that's probably, you know, especially if you're early stage, you're a technical team. Getting out of that feature mindset is sort of step one. But I would say, you know, having done this a lot, you know, I'd say I'd kind of use this overall model for SaaS pricing. I guess when companies try to set prices for their software. What I've seen is they often face, kind of, four big problems. They don't know who their customers are. They don't understand how their product helps customers. They can't explain why their product is special, and they forget that pricing is about more than just picking a number. So, it kind of helps, I've seen this so often I ended up creating a model that I call the services model. Services stands for the four components, SVC and s segments, value, competition strategy. So break it down, like the first three elements are S's segments. So who are your customers, what do they need? V is value. Like, how does your product help customers? Why is it important to them? C is competition. So what other choices do customers have? So these three elements can be considered inputs to the overall pricing process, because really, your pricing power comes from the differentiated value created for a particular segment beyond the competitive alternatives that are available. So and then those three elements kind of filter down in the final piece, the final S is strategy. So how will you sell your product to the right customers? And strategy I use in the Michael Porter, since the word So strategy is all about making trade offs. You can't make everyone happy. So we gotta choose, like, which customers will we focus on. Like, how will we show them that our product is the best choice? Like, how would we package and price it to make it easy for them to buy? And so, you know, you really sort of asked about that, kind of very end of that process of, like, how do I think about, like, the packages and but like, you know, we need to kind of put that scaffolding on top to really have that type of conversation, because pricing, ultimately, isn't just about picking a number like, it's a really about understanding your customers and making smart choices, how you align, you know, what you're selling with the value you provide and the value your your customers perceive you provide, right, which you have more control over that than I think a lot of people think right kind of with the with the megapixel example I just outlined. So, you know, happy to, you know, kind of comment on anything I just kind of outlined there or if you want to kind of explore, you know, unpack a little bit more what kind of packaging means in the context of SaaS, what direction do you think would be most useful?

Botond Seres 19:24
Yes, and pricing definitely is one of the most complex topics, not only in SaaS, but in general, in business. And there are two very different models in how we actually provide value without pricing. And one of them is premium, I'm sure very familiar with that, and also free trials. And one of the things I and probably others have wondered, why is it that for some businesses like, say, Netflix, a free trial is more beneficial, and for some other business like, I can't think of an example of the top of my head, but freemium is definitely a viable one too, and I have no idea which one is better and why and for who.

Dan Balcauski 20:15
Yeah, so there's a bunch to unpack in what you just said. So I want to kind of start with, well, first of all, I'll just, I'll just make the flat out statement, like, I absolutely hate freemium. I spend all my time in b2b software. I almost always, I think, it's the wrong choice, except in some very rare circumstances, very rare exceptions. The problem around the discussion of freemium is that those exceptions are shoved down your throat as the reason why it works, except for identifying them as the exception. So, so let me just kind of back up a little bit, right? So you talked about value, value in price,

Botond Seres 20:57
Before we get into that, can you give us an example when freemium actually works?

Dan Balcauski 21:03
So there are a couple of rare exceptions. So one is when you run into what you might term like, as Dave mentioned in the intro process, I used to be, had a product at a two sided marketplace. A two sided marketplace often has this situation that is termed the cold start problem. So when you go out and you’re eBay, for example, you're trying to, you know, sell stuff on a marketplace to buyers. It's like, well, I can go invite a bunch of buyers to my market, but there's no one selling anything yet and vice versa, right? You often have one side of the market versus the other where, you know, yeah, you might have people who are interested in transacting, but there's no one on the other side actually offering the product. Or some market places have the exact opposite problem, where you have a bunch of sellers. You could think about something like Upwork, where maybe you got a bunch of people say, yeah, like, hire me to write your copy, or to design your web page or whatever, but there's no one, there's no buyers show up so all the vendors like, they sign up and maybe create a profile, but then they ever get a business so they stop paying attention, and they they don't invest in in, you know, raising that visibility, or paying attention to you when you maybe somebody comes along, etc. And so that cold start problem is a real challenge. So you'll see products like, one of the examples would be Slack. Slack has this situation where, you know, and again, a little bit less of a, extreme, example now that they've been acquired by Salesforce. But you saw this a lot before, when you know, you would have, just be able to invite a bunch of people, and then they had a, you know, per like, some sort of message limit. It's like, 100,000 messages, or whatever they would save in your history. But you could invite as many people, and they wouldn't charge you, and then eventually you would get some amount of usage where it’d become part of your company's communication, and then say, Okay, now it makes sense for us to pay. This has become so critical to our workflow. Well, that's a cold start problem, because, like, what is the value of slack? The value of slack is like, it's like, you know, the person who had the first telephone

Botond Seres 23:03
This is like a bait and switch a bit.

Dan Balcauski 23:07
Well, we could, we could add a whole bunch of different judgments onto that, but, you know, you could have like, you imagine, like the telephone, right? The first person had telephones, not very useful, like, until somebody I want to call also has a telephone. Well, same problem with Slack, right. So you need to create this momentum, like the product can't actually demonstrate value in a single user scenario and so we want to, like, encourage adoption as fast as possible, and saying, hey, we'll monetize later because of that. So that's a, kind of, a cold start problem. And then, you know, other situations actually in Dev Tools, this tends to be a situation, because you may have, you know, let's say I'm building a product as an engineer, and there's a certain set of capabilities, right. Let's bring it back to AI. Maybe I'm, maybe I'm building a whole bunch of features like, and we're just trying to figure out, like, what's possible. This is kind of what our end state wants to be, but we might spend 3, 6, 9, 12 months in development before that product we're using is actually in the wild, right? And you could think about any number of dev tools, but in that case, that company isn't actually getting value from their end customers until that, that is shipped. And so what do you do in that situation? You may have a free trial, but then you're in this position where you're constantly they're not ready to buy because they don't even know if what they're building is going to, you know, just the fact of them tinkering around with it isn't actually where they're getting value. You're getting value because you're using it in production. And, you know, it's part of their monetization operations, or monetizable operations, I should say. And so we want to be able to align that without having to be in this perpetual renewing of a free trial key. And so actually, Dev Tools helps where you can say, okay, there'd be no one would ever run this set of capabilities in production, because it would fall over and wouldn't be good for that case. But if people want to use it in a Dev or staging environment, then it's perfectly suitable for them to tinker around. And then we have a trigger for when, you know, our customers see value, for them to come over, you know. And then there's examples where there are sort of inbound network effects, which is kind of another way that like, for example, Zoom is an example where that is, had been the case, where it's like, I send you an invite, right? There's, I'm sent inviting a bunch of other people who maybe never heard of zoom so there's a zoom link, but very few be like that. Again, the examples we know of, everyone knows of, but then people try to say, well, Zoom did it, right? But again, ther, there. Look, why? Why do I not like it is because there's a whole bunch. There's a whole bunch of reasons. I'll have to cut myself short, because we could easily, probably take up the rest of our time with me elaborating all the reasons I don't like freemium. Before I do that, take it. Take a step back. What is the advantage of either a free trial or freemium so software is what economists might call an experience good, where my perception of the value changes when I use it. You have that, you ever walk through the grocery store on a Saturday, they have the person there who's handing out the free samples, right? Like, oh, like, here's this little cheese and sausage thing I never would have bought, Oh, my God. Like, it's amazing. Like, How much for this? Like, throw it in my shopping cart, right? Same idea, right. We've, we've just borrowed this idea and applied it to to software world, and you get most of that benefit from something like a free trial, no matter how good your marketing team is, videos, white papers, you know website design, there's something magical about getting the software in your own hands, putting your data in it, seeing how it actually works, so the user has that Aha moment. Now I understand the value, right. No matter how many demos I get from a sales person or etc, like, it just doesn't quite click, but you can get most of that value for a free trial, and then premium just creates a whole bunch of other issues. It causes a lot of problems internally. I think the big one that I tend to see is that there's this view that, hey, we'll just be able to convert all of these free users at some point and it's kind of a perpetual illusion, kind of best in class freemium companies, they convert 1 to 3% of those free users into paying users, and you'll see most of that during the period you would expect a free trial to run 30 to 60 days. So you know, what are you really doing? And then it creates this never ending pressure, because look, our marketing growth counterparts, they're under tremendous pressure to fill, you know, viable leads and, and help grow, you know, the business overall. And well, they're going to be like, Well, hey, it's really expensive for us to run all these Facebook and Google campaigns and to try to do conferences, etc. We've got, look, we've got, you know, 1000 paying customers, and we got a, you know, 100,000 free customers. If we all, if product would only spend a little time trying to move them over. And it comes from a good place, but it creates a lot of friction internally, because it's generally viewed as a mirage, right? You're wandering in the desert. You're dying of thirst. In the distance, you see the lake full of amazing water. I believe the same thing is happening there, because as much as you try, really, there are different segment of customers. Is what it tends…

Dave Erickson 28:46
It almost comes down to a segment value thing. The segment of customers who use freemium software they're using because it's free, and when it is not free, then they move on to something else. Usually, right Yes, yeah. And I think that's really have value. I'm kind of of the mindset that it would be better to just price the product, you know, cheap than free, right? Get them started at $1 a month. And if they want all the bells and whistles, they they pay full price, and if they're happy with, you know, $1 a month in minimum service, great, at least you're getting income.

Dan Balcauski 29:25
Yeah, you know, there's, there's so many different elements to that, because, you know, the question is, you know, there's, there's all these questions around, you know, what is the experience, right. Because the product is the product, but also, there's more to my experience as a customer than just the bits right. So, you know, I'm using it right, like, what do I, Are we support? Are we offering email support, phone support, to these customers? You know, what is there because their impression of us as a company is going to change. You. And also it could be entirely the wrong customer base, right. I've worked with clients before with their b2b software, and you, they have a freemium tier, and all the people in the freemium tier, the use case is entirely different. It's like some family using it for some home thing. But then you go on Trustpilot, or one of these other review sites, and you're looking through hundreds of these reviews, and they're all from, oh, this is great for keeping me and my family on a family calendar, schedule, or whatever. You're like, you know, so if you're, I don't know, CTO, or serious buyer in the business segment, you're like, What is this product? A toy? Like, what is this for families? It's completely diluting your message, because you've got all these free users that are out usually, again, if only 1% of your free users convert, your free voices are outnumbering your paid customers, you have 99 to 1 potentially. So you go to these, it just, it really confuses the message. I'll stop there, because there's a bunch of different other elements I can outline, but generally do not recommend it. I think it's one of these areas that b2c, it can work, and I think it's one of these kind of tactics that people have tried to drag into b2b, and except for very rare exceptions, it's generally a bad idea, and you're more suited to get all the benefit that you would have out of a free trial.

Botond Seres 31:26
Yeah, for b2c, it definitely works. I was just gonna add that there is a silver lining to freemium, is that there are millions and millions of people who would literally never pay a cent in their life for certain products, and still, they are very happy with freemium and they provide free advertising for services.

Dave Erickson 31:42
You know, as a company who's releasing software, you know, I think Dan, you came to an important statement about the segment and the value. And you know, you really need to figure out, who are you going after when you launch your software. You know, if you're doing a SAS product, I assume that that segmentation is a key foundation to where you're going, and, and, and once you kind of have your understanding of your segment, I guess then there is a component which is determining value. Maybe you can kind of talk a little bit about the relationship between the two, and how does value? How do you establish that value?

Dan Balcauski 32:31
I love this topic. Let me ask you both a question, how much should a beer cost?

Dave Erickson 32:38
50 cents.

Botond Seres 32:39
It depends.

Dan Balcauski 32:40
50 cents. On, come on here.

Dave Erickson 32:43
So for me, the value is very low.

Dan Balcauski 32:45
Okay, oh, you don't, you know, buy 50 cents, got it well, what's on?

Botond Seres 32:50
I was gonna say about the same, but I'm gonna go with $1 just for

Dan Balcauski 32:54
$1 $1 Okay. So 50 cents, $1 we just ran a little mini pricing survey. By the way, I would never recommend structuring your questions like that, but I guess one, you know, Botond you said, it depends, and I think you're absolutely right, and Dave you said 50 cents, but then you also said, Hey, I'm not a buyer. I'm not a buyer of this good, right. Super important, right? Like, like, to you, like, I mean, you probably said 50 cents to to play along, but you probably, you said you don't drink beer like, I need to consider you in the nine non buyer segment. But like,

Dave Erickson 33:35
I know beer in a restaurant is like, six bucks or seven bucks, right you know.

Dan Balcauski 33:41
So yeah, because the, as Botond was hinting at, and as you just hinted at, Dave, are you in the grocery store? Are we in a restaurant? Are we at a bar or nightclub? Are we at a, you know, major league baseball game or a concert? The, you know, that, what you might be willing to pay for a Budweiser in the grocery store, I don't know. Say 50 cents to $1, is going to be, you know, they're going to charge you $25 if you're sitting there watching your favorite team play and you're sitting in the stands, same beer, completely different context. So why go through that little exercise? I appreciate, thank you both for playing along, because your value is contextual and it's subjective. So again, going through this segmentation that I talked about earlier, value only exists in the consciousness of men, like there is no external idea of value. These different segments are in different situations, and therefore they will value your product differently. And so, you know, price and value are very foundationally linked. So usually, when people go through, maybe they go through college and you take an econ 101 class, you know, at some point your econ teacher. We put a demand curve up on the screen and said, Hey, here's the demand curve. It shows how the price of a good or industry changes. Quantity changes along with, with price. And so that's usually how we think about prices. Foundational relationship is its relationship to quantity. But we talk about things in the b2b space, especially b2b software space. It actually is, yes, it's related to volume to a certain extent. And we need to look at, you know, what's the you know, that marginal additional seat of your CRM software that you buy, you're probably not going to pay the same price for the first seat as you pay if you buy 1000 seats, right? And so there's a, there's a marginal return as you sort of buy more, right? And we reflect that in a price structure. But that's usually not what we're dealing with. Found primarily when we go to price something like b2b software, it's value, because the value is, needs to be communicated, understood, defined. And that's really on the job of the vendor to understand all that and to communicate it well, and so I spend a lot of my time in the work that I do deal, helping to improve value literacy. So there's a, I'll try to keep this brief. This is an extended explanation I can go through, but I'll just for the purposes of our conversation, we think about value in a b2b context, usually in terms of the economic or functional benefits we get. It's usually helping us increase revenue or decrease costs. But all value is also relative. So we go back to the kind of model I was talking about before. You know, you're sitting in a, using that, that beer example. It's like, well, I'm in a ballpark, they, they, they patted me down to make sure I wasn't bringing any, any of my own alcohol in, because they knew that's how they were going to make their money out of me. So my alternatives are limited if I really want to drink there. And so my alternative is either, kind of the small beer or the large beer. So I get the small beer for the cheap price of $18 or they can upgrade to the large for $25 right? Because that's such a bargain. And so we really are trying to understand what is the relevant alternatives, sort of, for that person in that context, and we think about that in terms of the exchange or economic value that we're delivering to somebody, because, you know, we live in a market economy, even if you're you don't believe you're competing against anyone, probably means you haven't really thought through your your market well enough, because status quo is always competitor whatever they're doing today, or having a human do it with a spreadsheets and email, right versus your vertical workflow software. So we really need to think through what those alternatives are and how we help customers do the job better than they're doing it today.

Dave Erickson 38:01
It seems to me that customer profiles, you know, developing your customer profiles, who are the types of people who are going to buy your software, and under what situation or circumstance they're going to purchase the software or need the software, is a critical start in determining values correct?

Dan Balcauski 38:22
Yeah. So I think when we think about customer segments and customer segmentation, a lot of people get really stuck on easily observable characteristics. So you might think like, in a b2b scenario, we talk about firmographics, which would be different than in the b2c we talk about something like demographics, like b2c case, it's like, Okay, what's your age, your income level, your education, your geographic location, right? But we have the same thing in businesses, right so company size, whether that's terms of revenue or number of employees, what industry vertical that they're in, etc, you know, maybe someone's job title, right? A potential buyer. And I think when people start thinking about segmentation in this type of work, that's kind of where they start and end. If they even get that far. If they get beyond the all our customers are the same, and we sell to everyone, which is more predominant than you might imagine, then they tend to stop at the firmagraphics of like, oh, well, we we have three types of customers, small business, mid sized enterprise, like, okay, that's probably is not good enough to determine what you're trying to offer them. Really we're trying to think about what is the jobs that, that those people are trying to get done? How do they view value? What situation are they in? Going back to the beer example, same person I'm in the grocery store versus I'm in a nightclub versus I'm in a, in a at a baseball game, very different contextual situation, choices, willingness to pay. Also similar for your. Customers, right? Very few people get up in the morning and say, I'm going to buy some software, because I work at a large enterprise, so I'm going to go shop for enterprise software. It's like, no, the person wakes up and they say, I've got a job to do. I've got a problem. How are other people solving this problem? Because this problem is, is really annoying me. And then they're going to look for what they understand about that and other ways that people are trying to solve that, not starting with like, well, what industry vertical am I in and what I'm an enterprise customer, right? So those things are important, right? We need to have, well, ultimately, when you do segmentation, well, you have both, because you need to be able to also kind of understand how your go to market teams can, can reach out and find those customers, right? We're like, Okay, we need to know that like, customers who look like this also are probably very likely to show up at the healthcare conference, right? So we can spend our know to spend our money there. But that doesn't necessarily dictate how those people define value or the context that they're in. 100%

Dave Erickson 41:02
In the conversations that I've had with some people, it seems that almost the standard way of determining the value of your software tends to be something like, you know, Our software compared to competitor Y is better because we have five additional features, therefore we should charge $1 more, right? And they seem to set their price based on the number that their competitor is doing, and this assumed assumption that they're better, so they should charge more. Obviously, you know, that's not how pricing should be done. Maybe you can talk a little bit about what that path of going down, of copying your competitors, versus finding a real value and price for your product based on other criteria?

Dan Balcauski 41:52
Yeah, so there's, there's a couple of different ways to slice this. So the first is, when you go to market in b2b software, structurally, probably, when that econ professor was putting those supply demand curves on the whiteboard, they were talking about two extremes that no one is ever in. So one is the monopoly. I have full market power and can set whatever price I want. And the other is I am in a full on commodity business. I sell steel. I sell, you know, frozen orange juice. I sell whatever you know, whatever commodity I'm in, pork bellies, whatever you might find out of the commodity exchange. And those b2b companies are somewhere in the middle. There's some sort of, like, oligopoly type market. And even then, their products aren't, sort of directly comparable. What does this mean? This means that it's highly, highly unlikely that you and your competitors are going to market with the same goals, with the same assets targeting the exact same customers you're all and maybe it doesn't necessarily look like that on the surface, but very rarely are companies all just going head to head for the exact same accounts across the board. So what does that mean? There's no silver bullets in pricing. We've got a lot of lead bullets though, a lot of trade offs we could make to help you achieve your goals. And therefore, everything is about trading off one thing for another. And when you just blindly go and copy your competitor from their, whether it's their price level, or, you know, copy their feature sets, or, like how they put their feature sets together into into bundles, etc, you're inheriting a bunch of unknown risk that you don't understand, because that, I guarantee you that company on the other side had to make a lot of hard decisions to get, well, assuming they did their homework, which is not guaranteed, they probably had to make a hard, bunch of hard decisions. Yeah, it's funny, because I'll see this time to time, because I talk with a bunch of other pricing experts, you know, work at different companies, you know, just we have, you know, have little chats, and I'll have a client, and they'll be like, oh, man, competitor Y like, they do this, and the CEO loves how they do that, and they want us to follow it. And then, like, whatever, a month later, and I'll be talking to the pricing guy at that other company. I'm not changing. I've never traded. Uh, secrets. But like, it's not, uh uncommon to be like, Oh, yeah. Like, that thing, like, we hate that. It causes all these other problems. And like, we want to get rid of it, but we can't, because of XYZ reason, right? And so it's this paradox where it's very easy to look at what somebody else is doing and be like, Oh, that's that's great for all these reasons and what it must be doing, but you're by just copying what they're doing, you're inherently swallowing all that risk and not understanding what you're doing about it. So if anything, one way to, I don't believe in the whole idea of bury your head in the sand, only look at your customers right, ignore your competitors. I think some people in very high places have promulgated that advice. I think it's a good balance view, like, if I'm going to put weight on either side, I probably 60, 70% focused on my customers, 30% on my competitors, but I want to make sure I'm aware, because, again, right, like the customers are in that market, right? I got to make sure my relative conversation makes sense, otherwise I just look like a crazy person talking about how awesome we are without full contextual awareness. But I think when you do that, instead of saying, hey, let's exactly just copy my what my competitor is doing, the smarter way is to be like, Well, assuming that they've done their homework, what would we what would have to be true for us To sort of adopt something similar, like, what are they seeing in the marketplace that is allowing them to or causing them to go to market that way, as a way for us to not sort of adopt what they're doing on the surface level, but to help enrich our perspective of what else our competitors might be seeing in the market, to get better insight on like areas or blind spots that we might be missing, if that makes sense. So, so, look at your competitors, understand that, and look, it's going to be a very different conversation if we're working a, sort of strategic level of pricing with a company, versus, you know, your sales guys in a deal head to head. And like, you know, competitor X is as a in, you know, has a bid for this, and better, you know, and then you have a bid for Y, right. Are you in a multi way negotiation, right, with the customer, sort of, kind of playing everybody off each other, right? Those are very, we're talking about very different situations. I'm talking more about sort of the strategic level, right? Because, you know, this is why we have discounting, etc. Because oftentimes, you know, even in that situation, you don't know that. You know the customer, that other product they may only be using as a negotiation tool against you, right? It's like they, there's a whole bunch of reasons why that product actually isn't a fit for them. And they, you know, if they have to, because the procurement requires that they take the lowest cost bid. But they, there's a bunch of things about that product they don't like, but they're not going to tell you that in the negotiation right? So we always want to kind of take that with a grain of salt, but we don't want to make sure that we're keeping it want to make sure that we're keeping an eye on those, on those competitors.

Dave Erickson 48:05
Yeah. I mean, if you go, if you go look at your competitors, and you say, Okay, we have, you know, seven competitors, and their prices range from $1 to $7 you kind of have a window. It gives you an idea of kind of potential pricing structure. But, you know, you can also go and look and see, oh, the guy who's charging $5 for all of his customers. There's a whole bunch of reviews about how they hate the product, and it doesn't really work. And, you know, so he might be charging $5 but the customers are beginning to sense that's not worth it, right. Or you might get another one where he's only charging $2 and everyone's like, Oh, this is, the, this is so great. You get so much for your money. It's like, why would I go to anybody else? Right. So you can kind of use those things, I guess, to, to help you, but I don't know. I think at some point you also have to kind of say, well, this is who I want to go after, and I think that they would value our product in this way. And how would you determine what that product would be, or what that value would be based on that assumption that you are confident enough, that you have what it takes based versus your competitor, right.

Dan Balcauski 49:27
Yeah, so when we're super early stage, you know, people are often, look, if starting a company, a product company from scratch, was, you know, as easy as kind of just like, oh, just follow ABC. I mean, there's plenty of how to articles of just ABC out there, right, But it's rarely that easy. And why is it rarely that easy? It's because often you're simultaneously juggling several different major pillars of strategy, right? It's like you're not sure about your customer. You're not sure of those customers what problem, problems that they have. What other alternatives are out there, right? And if you know, if maybe even you have the right problem solved, you don't have the right solution yet. And so you're, you're, you're iterating on all those large chunks kind of simultaneously, right? So the question, though, like, I think we could maybe more succinctly or uh, collapse that dimensionality down right? Like, let's, let's assume I have sort of a customer, customer or set of customer segments in mind, right, with a sort of defined problem, then the question is like, Okay, well, how do I actually kind of go and figure out, like, how much they would value my product in those situations, nothing beats a conversation, number one and there are, you know, again, I go back to this idea, I have it fully elaborate in this conversation, but folks understand the concept of jobs to be done, framework that I use, but obviously did not come up with very helpful for helping to understand, like, okay, that your customer exists in the context, they're trying to make some progress in their life. You know, your product is just, you know, one component of, of an entire arc that that customer is going through, really diving deep to understand like, what does their world look lik. After that kind of, especially the b2b context, trying to understand like, what is solving that problem look like for them in terms of actual dollars and cents? Like, okay, so you know, if we were to help you increase your marketing campaign efficiency. If we were to help you increase the efficiency of your sales, folks like, what does that mean to, what are the metrics you're being judged against, or your CEO is being judged against as it pertains to this particular function? And then, okay, we've got a solution having an exploratory conversation around pricing after you've fully elaborated the value part to be like, Okay, well, there's different ways to go about it. One of the common methods that we talk about i,s there's a pricing discovery methodology called Van Wessendorp. It was invented by a Dutch economist named Van Wessendorp back in the 70s, but consists of four questions around helping to establish a potential price range. So everything from what price would be so cheap that you would actually doubt the quality of this product, to would be so expensive it would prohibit you from actually making the purchase. And there's a couple of questions in the middle, but the most important of those questions is not those starting questions, but after that, of like, Why? Why do you say that? Because, as part of this, we're really trying to understand the context the customer is in, in terms of the job they're trying to get done. But then also, what do they, what do they view as viable alternatives, right? And this is where you know, those competitive lenses where it's like, oh, the founder stands up, says, We have no competition. It's like, you have not talked to your customers enough, because you definitely have competition. And you know, maybe it's doing nothing, but even, I think doing nothing usually, you know, we're talking about a business b2b context, like there's some sort of manual, internal process, right. There's some way they're solving, sort of that higher level need, right? And if they're not even doing that like you probably don't even have a market space, right? If people are not investing any energy in trying to move that particular thing forward, you're going to have a real hard sale on your hands. Doesn't matter what your price is, the value is not going to be readily apparent to people, because it's not a problem that they're actively trying to do anything about. To do anything about.

Botond Seres 53:43
That's a fair point, and actually brings us around to your topic that I wanted to ask you about. I understand willingness to pay, and I wonder if you can share what that is and why it's important.

Dan Balcauski 53:59
So I was just hinting at willingness to pay, sort of indirectly when we asked those type of Van Wessendorp questions we're trying to really get at a customer's willingness to pay. So the idea is willingness to pay really measures desire. I have a more colorful way of saying that, but I want to keep it family friendly. So your transaction price, you know, it's like, Hey, we've got, we sold X Widgets at an average, you know selling price of $1. That doesn't necessarily tell you customer willingness to pay, because you know your customers in that moment may have been willing to pay more than that, but you set a starting price at whatever your sort of list price was. And there's a, there's a fascinating history right as we migrated from the bizarre of old, where everything was a bespoke negotiation to the invention of the price tag. We don't think about things like the price tag being an invention, but there was a point, you know, back in, in history, not too long ago, where, you know, you walk into a store and price tags as a thing didn't, didn't exist, right? That's a, you know, it's a relatively modern invention. But what does price tag do? A price tag or a price list or public pricing on your website, like it's set like very rarely you could have a customer say, Hey, I know your software is $10 per user per month, but I really have a bunch of money burning a hole in my pocket, so I'm gonna, I'm gonna actually pay you $100 per user per month. I don't know, maybe if they're trying to do some money laundering, or some, some sort of weird shenanigans you're not really going to be, want to be a part of, but customers are almost never going to offer you more than your list price, right? So it sort of sets a ceiling. And so you know that we want to be able to understand willingness to pay. So why? Why is that important? Because, your willingness to pay we could use as a backdoor proxy to the perceived value, perceived value is a whole other topic. But, you know, my idea around a product and what it can do for me is going to set sort of an absolute ceiling that my willingness to pay is never going to be higher than So, because my willingness to pay is really like, I'm sort of indifferent between buying this price and not by or buying this product and not buying it at that, at that particular price. But if I almost, you know, definitely, definitionally, like, I will never pay a price more than my perceived value of what that product's worth. Otherwise, my value is probably actually higher than that, I'm just not taking something into account. And so why is that useful? Because this type of questioning that we went through where I'm asking these sort of open ended questions around customers willing to pay without previously anchoring them. Remember, we're in an exploratory conversation before we this is, this is a whole conversation of, how do you set that list price. So we're asking these willingness to pay questions to understand what those possible ranges are. What else can that tell us that can tell us, Oh, when I talk to these sets of customers, I have this value conversation around their whole situation, the context that they're in, the problem they're trying to solve, what it means for the business. Then when we get into this willingness to pay questions, all numbers are way higher than this other group of customers who are in this other situation, they're like, Yeah, I don't know this, you know, in this the smaller number, right? And so even if, you know, maybe we don't, uh, assign seven, you know, decimal precision to the to the number of the average of the of both groups, we both see like, oh my god, like, there's, you know, there's an order of magnitude difference between these two groups and in where they're clustering, right. And there's some variation, but, you know, it within their individual responses. But they're these customers are very different than these customers. So, so this helps us, right? Why else do we care about willingness to pay? Because we can get better signal about what people really value when we include these types of questions into things like upfront product discovery, some of what we've been talking about. And for better or worse, I think a lot of companies end up in this situation where they sort of build the product and then build the product and then be like, Hey, what should we price it at? Really advanced companies flip that on its head. If I'm, I spent a lot of time in the product management world. It's very easy as a product manager to say, Hey, would you find this feature useful, by the way, never ask, never ask a customer that, because they always say, yes, the better ways be like, hey, feature A or feature B, which is more valuable, make them trade off, like, you can only have one, okay, better question, A or B? Oh, I like A better Interesting. Okay, you like a better than B you find that more valuable because we're actually thinking about bundling that into an add on for an additional X percent per month in our future release, by tying a price to it gives you another level of data, another level of insight than just asking about the value sort of relative to other features, does not. In our world, value is the pleasure, and price is the pain. And so if we are able to trigger that part of the brain that fires those will get a better signal of what, like, how much folks actually value that. And so that would be the way that, like, really advanced companies, like before they actually go build the product, look at sets of capabilities. And there's really advanced methodologies you can do to do this sort of at scale to understand, okay, hey, customers want these things, but are actually are willing to pay for them, and so we will prioritize building those in our roadmap more so than these other capabilities.

Dave Erickson 1:00:11
Yeah, it seems that there is a process that people who are launching a new SaaS product need to go through in identifying their customer, who they're targeting, and then working with them to try to determine initially, what are the values that these people put on the solutions. Right. I think from what you were saying, the real value of a piece of software is the value of the solution versus, you know, what it can do and what the feature set is correct?

Dan Balcauski 1:00:52
Yeah, so people don't buy features, they buy benefits. And you could the pricing person might take that a bit another step farther, and say, we actually buy, we actually trade money for value, not for even benefits. The, getting all the way to value can be, can be tricky, but I think, yeah, that's where, you know, we want to actually figuring out what goes where, et cetera like that tends to be a very tricky exercise, and it tends to be iterative. But if we just start with this idea that we want to go sort of top down and bottoms up. We're going to have certain capabilities that, you know, we believe are highly differentiated, that other customers have told us, like, are really valuable, right. And so we think there's a monetization opportunity there. But we also from a top down, right. We want to have a smooth go to market motion. We want, we don't want to have sales try to figure out where each person goes. We'd love to have something public where customers can even in a b2b scenario, if it's, you know, relatively low dollar value, you know, they can swipe a credit card and, you know, figure out what they need on their own, right. And the only way we get to do that is if we've thought really well about how certain features hang together into benefits, right. That we can then tell the story. You see the companies that do this really well. If you go to their pricing pages, you'll see they're good, better, best offers. Too many people, again, use what I said before, which is like, this is for small, mid sized business enterprise, but you'll see one of the companies that you know does this well that's not sort of your traditional good, better, best is someone something like, LinkedIn, Right. LinkedIn, has. LinkedIn, Sales Navigator, LinkedIn, job seeker, LinkedIn, Business Premium, LinkedIn, recruiter, right, LinkedIn recruiter better than Sales Navigator? I don't know. Is that even a relevant question to ask? They're four different people, with different needs. And if I'm a recruiter, I don't even look at the other things, because like, Oh, this is the thing for a recruiter. And so that's sort of the mental model where companies that really know how to do this well, they can sidestep a whole bunch of friction, extra conversations with your sales team, confusion of your prospects, maybe buyer's remorse, because we finished the transaction, then we actually realized we need the other thing where we didn't realize that wasn't included, right? If you can think about, how do we bring all these benefits together and then tell a holistic story like, Oh, you're this kind of person, you're having this kind of problem. This is the offer for you.

Dave Erickson 1:03:30
Yeah, I've seen some companies do it by having packages that are targeted to functions or job kind of aspects. Another one that I saw was kind of good, was they actually had packages targeted at the types of problems you're trying to solve, right. So they had a package for people who were dealing with, you know, financial questions, and then they had a package that was dealing with structural questions, and they had a package that was dealing with marketing, right. And it was basically the same product with different feature sets engaged for each different kind of, you know, function or issue, you know, those are all optimal or good things that you can do. I think the standard pricing model of, you know what you were saying, kind of, this one has very few features. This one has more features, and this one has some other features. I mean, there's not really any intelligence to coming up with that, right? And it doesn't help the people looking for the service software solution to find it. I mean, you know, so I think there's something to say about that.

Botond Seres 1:04:45
There is another topic that I feel like is brought up very often, and when a product or service is not selling well or not as well as it should, we might think it's time to re-evaluate the pricing. And I wonder if you can give us some specific pointer then on when we should evaluate our pricing, or re-evaluate our pricing.

Dan Balcauski 1:05:16
The answer is, every 217 days.

Botond Seres 1:05:20
That's a great suggestion.

Dave Erickson 1:05:22
very specific.

Dan Balcauski 1:05:25
No, there is not a magic number in terms of exact cycle times. I can give you a couple of pointers. So, you know, I guess one misconception is, Hey, we did pricing when we launched the product five years ago. So we're good. If you haven't touched your pricing in two years, it's probably time to do a serious re-evaluation. Why? It’s because, well, you know, if you launched in, say, 2021, or height of 2020, especially in software world, you're living in a very different environment, COVID lockdowns and zero interest rates, no open AI or ChatGPT to take 80% of your Use cases at 10% of your cost, right? So you're very different environment entirely. And so we want to treat our pricing like a product and make sure that it's getting some regular review and attention, so kind of two years at the max, and then obviously that begs the question of, like, how fast can we do it right? And that's going to a lot depend upon the type of market you're in and your sales cycles right? If you're in enterprise sales motion, and you've got, you know, 12 month sales cycles, gonna be very difficult to do more than, you know, annual sort of tweaks, assessments, because you kind of have to make the change and kind of see it percolate through the system, and so usually, sort of one and a half to two times your average sales cycle is about as fast as you can go, and not sort of trip over your own changes right as you start trying to see if they're having the impact. Strategically, you know, I might want to be looking at a couple of things to see if there's a problem. So kind of metrics wise, one of the things I'm going to want to keep my eye on is net revenue retention. So for those of you who are not been steeped in business metrics, your net revenue retention is your combination of your gross retention, which is, you know, how many, how many dollars from customers were you getting at, say, January of 2024, versus those same customers in January 2025. So you've got, you know, hey, we retained 80% of those people who signed up. Right. That'd be a gross but then my net revenue retention, I add back in people who have expanded so people bought more seats. Maybe they, you know, expanded to another higher tier, right. So looking at that never revenue retention number to see if that's growing right, because if that number slips below 100% that means that my acquisition machine on new customers has to do that much more work. And so, you know, pricing and packaging is a big influencing factor of that if that's not you know going well. If you know fundamentally your value proposition has changed, right. And that could be either because your products changed, or maybe the market you're selling to has changed, or your team's kind of struggling to effectively communicate that value right. That could also point to an issue. You know, a lot of this looks really good on an Excel spreadsheet or a whiteboard or an executive meeting, and then it hits your sales force and they're unable to, like, tell the story, and, you know, it's just, it's causing all sorts of friction, right. So there might be other, kind of, sales motion metrics that you're going to want to be looking at, right? It's not unheard of people be like, yeah, when they they finally give me a call, they're like, our our sales team has three separate conversations on average, with people around pricing, because it's, it's yeah, it's like, you might be able to explain it, but I don't know if you've ever had someone explain something to you, and then 20 seconds later, you're like, I know I was listening to all the words you just said, but now I just totally, I like, oh, they were all English, but I just, I completely blanked out, right. Which could also signal that it's too complicated, etc And so, you know, I'd want to be looking at a few of those things. But hopefully those are a couple of pointers people can take to see if you know, those are kind of areas, right. I mean, the other is, like, the good news cases, customers tell you how cheap you are all the time. You never lose any deals to price. Yeah. Yeah, those are not necessarily good things. It probably means you're leaving a lot of money on the table, and you probably should be charging more. Those are more on the specific sort of price increase. And look, there are strategic reasons why you may or may not want to do that, but you know, you should be getting some pushback from some people you talk to that your price is wrong, right? Otherwise it means you're, you're just giving stuff away, that everyone maybe is snickering behind your back at what a sucker you are. Or is the old if you look around, you don't see the sucker. It's probably you. It might be one of those situations.

Botond Seres 1:10:52
So then, usually my last question is formed as, what is the future of but since we covered a variety of topics today. What would you like that question to be? What would I like the question to be? Man that pressure, like pricing, software as a service?

Dan Balcauski 1:10:55
Oh, what is, what is the future of blank, of one of those things? Well, I don't know I'm really I spent all my when I'm not consuming stuff about pricing. I spending all my time on AI stuff. So

Dave Erickson 1:11:10
We can ask the question, what is the future of SaaS software and AI?

Dan Balcauski 1:11:13
We need to be cautious as an industry that we don't make the same mistake with AI that our crypto brethren did with web three and blockchain, which was, hey, we now have your CRM, We now have your your Twitter, we now have your whatever with Blockchain. And everyone said, I don't get it. And we run the exact same risk with AI, unless you are an AI company, foundation model company, anthropic Open AI, Google, with Gemini, you're probably not doing yourself much of a service by talking about AI directly, you know, and especially as sort of everyone has gotten the memo, everyone has built in AI capabilities. So you just saying we have AI, still doesn't help your customer really understand what value or benefit that you're helping them with. So thinking through these capabilities, right, It's like no one goes in SaaS and says, Oh, well, our back end is we use an Oracle database, like no one puts that on the website. So let's not, like, do the same thing with, with AI and be like, Oh, we have AI. Like, no, nobody cares. Like, well, how does it help your customer do a job better? How does it, how does it help them make money? How does it help them save money? How does it help them? You know, get a promotion, right? All those things that we want to help, help our customers with. Look, is the, is the software industry going the way? I doubt it, but I, for one, welcome our new AI overlords, and I am, I'm hopeful they will spare me in their beneficence.

Dave Erickson 1:13:17
Well, we hope that the sentiment AI will spare us all anyways. Well, Dan, maybe you could talk a little bit about product tranquility. What kind of clients do you like to work with, and what are the type of services you offer them?

Dan Balcauski 1:13:36
Yeah. Well, just quickly, product tranquility, you said your intro, you help high volume b2b SaaS companies with pricing and packaging. And, you know, generally find that, you know, we work primarily with what I might call scale up companies. So those are companies that have, you know, some significant amount of traction, because there's some problems that happen kind of, you know, earlier, right. We were hinting at them before, where, you know, maybe it's like, okay, we don't actually understand what we're building or for who or for whom. And then at some point, you know, you're also then trying to worry about, you know, distribution problems. And then there's a certain level of complexity at which, you know, pricing and packaging becomes a real no-brainer in terms of a growth lever and so, yeah, you know, work with companies kind of both helping them do research on, you know, types of questions we were talking before. Kind of willing to pay, understand customer value, helping them understand, you know, different segments they're going after, getting alignment with, internally with those folks. But also, you know, act is an advisory capacity for some clients as well. Who are folks who are like, yeah, like, I kind of feel like I know what I'm doing with this, but, you know, would love some help from the outside to kind of, you know, keep us on the right track, and kind of use as a sounding board to make sure that we don't get too far afield. Yeah. And so yeah, we love helping clients with all those challenges. And yeah, like I said, before you find more, I'm happy to connect with folks on LinkedIn, Dan Balcouski, or go on the website, product tranquility.com, there's more info there. And also, I host a podcast called SaaS scaling secrets, where also I interview scale up b2b SaaS CEOs. So heading down the end of season two here on the podcast as well. So if folks want to check, check us out there can wherever podcasts are found.

Botond Seres 1:15:35
Dan thank you so much for being on our podcast and helping us to determine the value and pricing of SaaS products. Well, we are at the end of the episode today, but before you go, we want you to think about this important question.

Dave Erickson 1:15:52
How will you determine the best price for your SaaS product offering? For our listeners, please subscribe and click the notifications to join us for our next ScreamingBox technology and business rundown podcast. Until then, start determining the value of your SaaS product.

Dave Erickson 1:16:10
Thank you very much for taking this journey with us. Join us for our next exciting exploration of technology and business in the first week of every month. Please help us by subscribing, liking and following us on whichever platform you're listening to or watching us on. We hope you enjoyed this podcast, and please let us know any subjects or topics you would like us to discuss in our next podcast by leaving a message for us in the comment sections or sending us a Twitter DM till next month. Please stay happy and healthy.