Should You Charge Beta Users? Guide to MVP SaaS Sales
Denis Shatalin
Founder of SaaS Camp
Charge for your product from the moment you have a core function working.
Many founders are scared to charge beta users during the early stages of their Saas product development. Perhaps you have only a few features available now, or maybe your product still crashes occasionally, and you are worried about billing beta testers.
Whatever the case, charging your beta testers early is a great way to find your product-market fit and generate some early revenue. In fact, offering your SaaS for free during the MVP stage can mislead you in choosing the right growth strategy.
Many founders are scared to charge beta users during the early stages of their Saas product development. Perhaps you have only a few features available now, or maybe your product still crashes occasionally, and you are worried about billing beta testers.
Whatever the case, charging your beta testers early is a great way to find your product-market fit and generate some early revenue. In fact, offering your SaaS for free during the MVP stage can mislead you in choosing the right growth strategy.
Contents
- Consequences of offering your service for free
- The benefits of charging for your SaaS during the MVP stage
- When should I begin charging for my SaaS?
Consequences of offering your service for free
There is a wide range of reasons that offering your Saas for free could negatively impact your business in the future.
1. People tend to value free products less
If you give away your product for free during the MVP stages, you risk devaluing it in the eyes of potential customers. When a saas is completely free, people tend to associate it with being low quality. This can make it extremely difficult for people to take your product seriously in the future.
2. Users may become accustomed to your free Saas
If they're used to getting it for free, they may not be willing to pay for it later on down the line. It's important to remember that people are creatures of habit. Once they get used to something being a certain way, it can be very difficult to change their mindset. I usually lost 80% of my user base when I started charging my users. Are these guys worth your effort?
3. Free products attract the wrong users
When you offer a product for free, you open the floodgates to anyone and everyone signing up for it. This can be great for building a user base, but it also means that you're likely to attract a lot of tire-kickers and freebie seekers who have no intention of ever paying for your product. These users also tend to make endless requests and critiques leaving you with nothing but a huge to-do list.
4. Free products are hard to scale
If you're not making any money from your product, it can is difficult to invest in the resources needed to scale it. This means that your growth will be slower, and it'll be harder to hit your long-term goals.
Offering your Saas for free during the MVP stages can be detrimental to your business. If you're serious about making your product a success, it's better to clearly display the value of your SaaS and charge a reasonable price for your service from the very beginning.
1. People tend to value free products less
If you give away your product for free during the MVP stages, you risk devaluing it in the eyes of potential customers. When a saas is completely free, people tend to associate it with being low quality. This can make it extremely difficult for people to take your product seriously in the future.
2. Users may become accustomed to your free Saas
If they're used to getting it for free, they may not be willing to pay for it later on down the line. It's important to remember that people are creatures of habit. Once they get used to something being a certain way, it can be very difficult to change their mindset. I usually lost 80% of my user base when I started charging my users. Are these guys worth your effort?
3. Free products attract the wrong users
When you offer a product for free, you open the floodgates to anyone and everyone signing up for it. This can be great for building a user base, but it also means that you're likely to attract a lot of tire-kickers and freebie seekers who have no intention of ever paying for your product. These users also tend to make endless requests and critiques leaving you with nothing but a huge to-do list.
4. Free products are hard to scale
If you're not making any money from your product, it can is difficult to invest in the resources needed to scale it. This means that your growth will be slower, and it'll be harder to hit your long-term goals.
Offering your Saas for free during the MVP stages can be detrimental to your business. If you're serious about making your product a success, it's better to clearly display the value of your SaaS and charge a reasonable price for your service from the very beginning.
The benefits of charging for your SaaS during the MVP stage
1. Helps you validate you find product-market fit sooner
The first and most important benefit of charging users for your SaaS during the MVP stage is that it allows you to find your ideal customers sooner. If people are willing to pay for your product, it's a good indication that they see value in it. Remember, it's better to have 5 happy paying users than 50 non-paying users. This is a crucial step in the validation process, and it's one that can be easily overlooked if you're not charging for your product.
2. Easier to scale
Charging for your product during the MVP stage allows you to generate early revenue. This can be extremely helpful in offsetting the costs of development and scaling your product. Moreover, it shows potential investors that there is a market for your product and that people are actually willing to pay for it. This can be a make-or-break factor when it comes to attracting funding.
3. Helps you build a loyal user base
When you offer your SaaS for free, you're likely to attract a lot of tire-kickers and freebie seekers. These users are often more trouble than they're worth, and they tend to make endless requests and critiques, leaving you with nothing but a huge to-do list. On the other hand, if you charge for your product, you're more likely to attract customers who are actually interested in using your product and referring it to others. These users will be much more supportive and helpful.
4. Gives you a better understanding of your market
Charging for your software-as-a-service product during the MVP stage empowers you with amazing market knowledge. If people are willing to pay for your product, it means that they see value in it. This can help you refine your target market and market your product in the right way.
5. Helps you build a better product
Finally, charging for your product during the MVP stage helps you build a better product. When people are paying for your product, they're much more likely to use it and give feedback. This feedback is essential for making improvements and ensuring that your product scales.
The first and most important benefit of charging users for your SaaS during the MVP stage is that it allows you to find your ideal customers sooner. If people are willing to pay for your product, it's a good indication that they see value in it. Remember, it's better to have 5 happy paying users than 50 non-paying users. This is a crucial step in the validation process, and it's one that can be easily overlooked if you're not charging for your product.
2. Easier to scale
Charging for your product during the MVP stage allows you to generate early revenue. This can be extremely helpful in offsetting the costs of development and scaling your product. Moreover, it shows potential investors that there is a market for your product and that people are actually willing to pay for it. This can be a make-or-break factor when it comes to attracting funding.
3. Helps you build a loyal user base
When you offer your SaaS for free, you're likely to attract a lot of tire-kickers and freebie seekers. These users are often more trouble than they're worth, and they tend to make endless requests and critiques, leaving you with nothing but a huge to-do list. On the other hand, if you charge for your product, you're more likely to attract customers who are actually interested in using your product and referring it to others. These users will be much more supportive and helpful.
4. Gives you a better understanding of your market
Charging for your software-as-a-service product during the MVP stage empowers you with amazing market knowledge. If people are willing to pay for your product, it means that they see value in it. This can help you refine your target market and market your product in the right way.
5. Helps you build a better product
Finally, charging for your product during the MVP stage helps you build a better product. When people are paying for your product, they're much more likely to use it and give feedback. This feedback is essential for making improvements and ensuring that your product scales.
When should I begin charging for my SaaS?
Once you have your core function up and running, it's time to start charging for your service. This allows you to get a better understanding of your target market, and the way you should position your product.
Ideally, your product is saving your customers time and money. You need to be able to quantify this value in order to close sales from the very beginning.
Charging for your product during the MVP stage is a great way to find your product-market fit, generate revenue, build a solid user base, and build the right marketing strategy. If you're want your SaaS to make money, it should be making money from the start.
Ideally, your product is saving your customers time and money. You need to be able to quantify this value in order to close sales from the very beginning.
Charging for your product during the MVP stage is a great way to find your product-market fit, generate revenue, build a solid user base, and build the right marketing strategy. If you're want your SaaS to make money, it should be making money from the start.
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