🍋 Stop charging for cups

April 15, 2025

In partnership with

The sun beats down. People walk by, licking parched lips. You hear the odd scoff or chuckle as they keep walking.

Why aren’t they stopping for lemonade?

You can see they're thirsty, and here you are with ice-cold lemonade, ready to serve. Just one small detail: they'll need to sign up for your monthly lemonade subscription first.

Oh, and there’s an additional per-cup fee for any friends they bring.

Absurd, right? 

Yet this is exactly how founders inadvertently sabotage their own growth—creating pricing friction that contradicts the very value of their product.

In this newsletter:

• Playing detective with product adoption

• Connecting price, to product, to customer with targeted questions

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Weekly Insight

Tability users’ behavior was making no sense to Sten Pittet. 

Customers would sign up for the goal-tracking platform… pay for a few seats… then limit access.

For a product built on the promise of team-wide transparency, this was totally counterintuitive. So, he started asking customers what was going on.

• “We want to invite everyone, but it adds up too quickly”

• “We can only afford licenses for managers”

• “We're limiting rollout because of budget constraints”

At $7 per user per month, Tability had followed standard SaaS pricing. More users = more revenue. Simple math, right?

Wrong.

His lemonade was enticing enough to get people in the door, but the pricing model stopped them from drinking.

Executives would foot the bill, then restrict access to save costs; inadvertently sabotaging the very outcomes they were paying for.

So Pittet made a bold move. In the middle of a pandemic, when most startups played it safe, Tability scrapped per-user pricing completely.

The result wasn't subtle. Revenue growth quadrupled, seemingly overnight.

A flat-rate pricing model finally matched how customers perceived Tability’s value—not in individual seats, but in company-wide clarity and alignment.

Are your customers buying licenses? Or are they investing in outcomes?

When your pricing creates friction that prevents those outcomes, you're essentially running a lemonade stand that charges extra for cups.

Intent to Action

I don’t want to come off like a broken record, so I’m not going to tell you to go talk to your customers again (even though you should).

Instead, I’ll help you design an experiment that focuses on customers’ actions, instead of their words.

Step 1: Identify what customers value

What specific outcome makes customers feel they got their money's worth? Write down your answer.

Now, challenge that answer with the following questions:

• Is this what I think they value, or what they've told me they value?

• Would they still pay if everything else remained but this outcome disappeared?

• Do my most enthusiastic customers mention this outcome when referring others?

Step 2: Examine how your pricing affects this value

With that core value in your mind, ask the following:

• Does my pricing model create friction around delivering this core value?

• Would using my product to its ‘fullest potential’ increase a customer's bill?

• Is the way users are billed aligned with how they use the product?

Step 3: Test a value-aligned alternative

If you suspect misalignment, run small-scale experiments to test out other options. For example:

1. For team collaboration tools: Replace per-user pricing with team-based tiers

2. For usage-based products: Cap costs at predictable thresholds, so customers don't fear success

3. For platforms with network effects: Make adding connections/users free, charge for premium features

If none of these work for you, reply to this email and explain your situation to me. I love brainstorming this kind of stuff.

Closing Thought

The perfect pricing model feels invisible. 

While you’re figuring out Product-Market Fit, the key question should never be “How can we charge more?” but rather “How can we remove barriers to customers experiencing our full value?”

Next week, I’ll be covering what is—in my opinion—the single most important trait for a founder to have: versatility.

See you then.

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Your Weekly Challenge

Even if you think you’ve nailed your pricing model, humor me. 

Identify one friction point in your current pricing model that could be limiting customer adoption or usage. Then, sketch out a simple A/B test you could run to validate whether an alternative approach would drive growth.

For example:

• If you charge per seat, what would happen if you offered a small team plan with unlimited seats?

• If you charge for features, could you bundle them differently to surprise and delight your customers?

• If you charge for usage, is there a cap you could implement to alleviate customers’ anxieties about an unexpected monster bill?

PS: I'm curious about my own pricing model too. 

This newsletter is free and supported by sponsors. I love writing it, so I’m naturally curious about a cheeky little bit of brand extension. Some options I’ve been looking into:

1. A paid community, for whom we put together networking opportunities, co-working sessions, courses and more. Reply with “Community” if you'd be into this.

2. Additional newsletter issues for paying subscribers, where I take a fine-tooth comb to startups in order to draw out highly specific lessons. Reply with “Newsletter” if this is your speed.

Or, if you have other ideas, fire em my way! :)