SaaS Business Model and Pricing

Monetizing a SaaS product is the art of finding the sweet spot between being attractive to customers and profitable for you. Fortunately, you have plenty of options. The most common model is the subscription model (e.g., monthly billing). It provides predictable recurring revenue — something both investors and entrepreneurs love. However, it’s not the only option. More and more customers are growing tired of endless subscriptions, so consider alternatives like a one-time payment or lifetime access. One indie maker discovered that his conversion rate doubled when he switched from a monthly subscription to a one-time purchase. People were simply more willing to pay once, even the same amount, than to commit to another recurring charge. It’s an interesting insight — it’s worth testing what works best in your case.

Next question: freemium or free trial? Many major SaaS companies attract users with a free plan, hoping to upsell them later. But as a solo founder, you need to be careful — the freemium model can kill your business if you attract tons of free users who never convert to paid ones. You’ll be maintaining infrastructure and providing support for people who bring in no revenue. That’s why a free trial (e.g., 14 or 30 days) is often safer. It gives users a chance to see the value of your product but prevents your business from being dependent on “forever free” users.

How should you set your price? A common mistake among developer-founders is underpricing. We tend to think like engineers: “It only costs me time and a server, so I shouldn’t charge much.” That’s wrong. Think like a business owner — price based on value, not costs. If your SaaS saves a client 10 hours of work per month or, say, 500 PLN in expenses, a 100 PLN/month fee is perfectly reasonable. It’s even smart to start with a slightly higher price and watch market reactions. It’s easier to run a discount or promo later than to raise prices for existing users.

In the early stages, reward those who trusted you first. Don’t hesitate to offer a special deal for early adopters — but make it permanent for them. It’s a popular practice: your first customers get, for example, 50% off the final price for life as a thank-you for their loyalty and feedback. As your service grows, you can gradually raise prices for new users.

In summary: choose your business model wisely. Test different approaches — monthly, yearly, or one-time payments; premium add-ons; freemium versus free trial. Analyze what brings the best combination of revenue and customer satisfaction. And most importantly — don’t undervalue your work. If your SaaS provides real savings or utility to your customers, a fair price is fully justified.

If you’d like to learn more about how to price and monetize your own SaaS application, consider joining my complete online training — SaaS Application School, where I show step by step how a developer can build a profitable SaaS business (from the first line of code to the first 100 paying customers).