We would recommend very strongly that you think about what price you want to charge - even if you don't care about making money. People will value your services partly based on what they have to pay for them
Additionally, and importantly, money makes a lot of things easier. You can go with one of five pricing strategies -

1) Free
2) Free with a Pro Version, also known as Freemium
3) Cheap
4) Mid Priced
5) Premium

We'll start by presenting the Pros and Cons of providing services for free or cheap (versus charging a decent price or a premium)



The Pros of providing a service for Free -
1) You don't have to do too much marketing or promotion. People flock to free services
2) You don't have to worry about quality
3) If you make it easy for customers to tell other customers, then growth is very fast. There is literally no 'friction' for a new customer to sign up to your service
4) You can build a brand quickly, albeit a brand of 'free service'
5) The numbers can be good for your ego and/or confidence
6) The competition has a hard time competing with Free
7) You can build a large customer base, with the option to later sell products to them
Please Note: Do keep in mind that only 1% to 10% of 'free seeking customers' will actually purchase the 'paid products' that you market to them

The Cons of providing a service for Free -
1) Customers who get a service or product 'for free' have higher expectations than customers who pay. Don't say we didn't warn you
2) With a free service you tend to attract customers with lower budgets and/or customers who are averse to paying. It's very hard to convert them to paying customers
3) You have no way to cover your costs. Even if you say - I love my work and am willing to starve for it - your server costs are not going to disappear
4) Free has a connotation of low quality
5) With a Free service it can sometimes be difficult to get feedback and rewards. If you're charging you have the money coming in and can track growth of earnings and customer retention and reward yourself and your team

There are actually a ton of dangers associated with making your product/service free. We, in general, would strongly recommend that you do not give away services for free



Freemium is a Business Model where you give away a 'basic' version of your product/service for no charge. There is a 'pro' or 'premium' version with special/full functionality that customers can upgrade to
You charge only for the Premium version

Pros of using a Freemium Model are
1) It's easy to grow fast as there is no 'friction'. Customers can just sign up for the Free version and can test out how everything works
2) Freemium beats Paid, even cheap Paid. A customer can sign up instantly and freely for your Freemium Product/Service. For a paid service the customer has to take out their credit card
There is almost infinite friction between $0 and $1
3) You can reach a lot more customers. As 'Free' grows very quickly, the 'Free' version of your product can grow very quickly and gather a large customer base. Then you can try and upgrade them to 'Paid'. You have solved the first problem - where to get potential customers
4) Freemium can compete with Free. This is an overlooked advantage. Paid (even $1 per month) has zero chance of competing with $0. Freemium, where there is, say, a $0 per month Free version and a $10 per month Paid Version, can compete with Free quite effectively
5) Freemium is a very well tested model and has been proven to work in many many business areas and many regions and countries

Cons of a Freemium Model are
1) Only 1% to 10% of 'Free' customers upgrade to the Paid version. The other 90% to 99% customers you still have to support and cover the costs for
2) The amount you have to charge the paying customers can sometimes become too high. If you get only 3% conversion, those 3% of paying customers have to also support the costs of the 97% of non paying customers. Depending on costs per customer, this might be impossible
3) Freemium has a hard time competing with Paid because a Paid service where 100% of customers generate revenue (instead of just 1% to 10%) can generate a lot more money
4) Freemium has a hard time competing with Free because Free is completely Free
5) Freemium requires a much longer time investment before you start seeing profits. If you don't have investors and/or a day job, then we strongly recommend avoiding Freemium

Don't get dissuaded by the Cons. A Freemium Model, while hard to make profitable, is very competitive with every other model
In a very competitive market, we recommend going with Freemium
If you're new to a market, then again, Freemium is a viable strategy
In any market, Freemium is a viable business model



A third strategy is to provide a cheap service - to undercut the competition by offering your product or service at a signficantly cheaper price than the competition

Pros of going with Low Prices
1) You can get a lot more customers
2) Low prices can compete with both Free and Freemium
3) Low Prices effectively kill off Higher Priced competing products (provided quality is the same or similar)
4) You are still making money from each customer so as number of customers goes up, you can make a good amount of revenue and profit
5) Growth is much faster. With a lower price your total addressable market increases a lot in size

Cons of going with Low Prices
1) Low Prices often carry a negative association of low quality
2) In a market with high demand and low supply, you're leaving a lot of money on the table if you go with low prices
3) Low prices require a long time horizon. It will take you a considerably longer period of time to become significantly profitable
4) Low prices means low revenue. That means you have far less resources and money to improve your product
5) Customers who pay less have higher demands and requirements than customers who pay high prices. It's not as bad as dealing with 'free' customers, and at the same time it can be pretty gnarly

We only recommend going with Low Prices if the market is very price sensitive
Regardless of how competitive a market is, we strongly dissuade you from pricing cheap or very cheap
Your costs of providing services and customer support would be much higher with a low priced product as those customers tend to really focus on getting their money's worth. You also have a really hard time competing with Free and Freemium (they can gather customers much faster) and with Medium Price and Premium (they have a lot more money to improve and grow)



Providing services at Medium Prices can be a very good choice in the right market. You want to make sure the market is not very price sensitive (so that you don't get killed by Free and Cheap). At the same time you want to make sure you provide a much better quality product that justifies the prices you charge

Pros of charging Medium Prices
1) For some markets, charging Medium Prices, works wonderfully and is the perfect choice. You make a good amount of money and can use that to improve the product faster than people charging nothing or very little
2) You can reach a larger number of people than you could with a Premium service. It's important to make sure your market is big enough to support a company offering Medium prices
3) If there is little competition or more demand than supply, then Medium Prices are a good win-win way to prosper
4) It's a happy compromise - most customers want a high quality product, and are OK paying a reasonable price. They will avoid premium products as they are not affordable. They will be vary of Free and Cheap products (due to real or perceived quality issues)
5) It's a very robust strategy as the combination of high quality product and medium prices creates very strong customer retention

Cons of charging Medium Prices
1) The biggest con of charging Medium Prices is that you can get undercut on price
2) Customer Acquisition is much more difficult than with a Free Product or a Freemium Product. On the flip side, you don't end up with 90% of 'customers' who are never going to pay you a cent
3) If a market is price sensitive, then you have to cater to what price they want. High end customers will shun 'medium priced' products and services as they want 'the best' i.e. expensive products. Low end customers will always prefer cheap and free. Make sure you are in a market where you have a large percentage of customers open to medium prices and high quality

Medium Prices used to be the best strategy. Gives you enough money to grow and improve your product. Gives you enough money to acquire customers. At the same time it's not too expensive and 40% to 80% of the customer base can afford it

The advent of Freemium and Free made using Medium Prices rather difficult. There will always be one genius who thinks he can lose money per customer and then make up for it by growing number of customers

Medium Price Products are still the best strategy in markets where one or more of the following apply -
1) You have a unique competitive differentiator
2) Demand is higher than Supply
3) There is very little competition
4) Competitor products are inferior and/or your product is superior to everything else
5) Market is very large and can support all sorts of models
6) Customers associate low prices with low quality
7) There is some base cost of providing services which makes you invulnerable to Free and Cheap i.e. no one can offer your product for free

We strongly recommend considering Medium Priced Products and Services as they are a happy mix of making money/profit per customer and also being able to reach a lot of customers

Even when using a Freemium Model we strongly recommend that you use Medium Prices for the 'Premium' part of your product offering. $10 per month or $20 per month works like magic


The Premium End of the market is really where you want to be. The ideal is to capture the Premium and Medium to Premium ends of the market, and take all the Profit

It's what Apple has done with Phones. What Microsoft has done with Productivity Software and Operating System Software. It works splendidly

Pros of Providing a Premium Service for a High Price
1) You will make a lot of money
2) You will have the resources and money to really improve your product and become the absolute best product and service
3) High Price automatically signals quality. So you start off with a positive perception
4) Customers who pay a lot hardly ever complain. It'll completely baffle you. People who pay $100 for a service never complain, whereas people who paid $5 want to come live in your office/factory and make sure their $5 is well spent
5) You develop a very strong brand (provided you deliver a very high quality product). This makes a lot of things very smooth

Cons of Providing a Premium Service for a High Price
1) Your product must be very high quality. If it isn't you burn a lot of customer relationships and lose them forever
2) Everyone in the ecosystem will be trying to steal your throne
3) Customer Acquisition for high end customers is quite complex. If not done right, it is very expensive
4) There will always be companies that try to undercut you on price. You must keep improving your product to fight off competitors who offer lower quality products at lower prices
5) There is a section of the customer base who will not be able to afford you. You have to tread carefully with this part of the customer base

To be quite frank, if you can pull off selling a High End Service, there really is no better place to be. The customers are great. The revenues are great. You have lots of money to improve your product. There are very few headaches