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No Calls

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1603 points ezekg | 10 comments | 16 Jan 25 14:17 UTC | HN request time: 1.054s | source | bottom
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freedomben ◴[16 Jan 25 17:12 UTC] No.42728008[source]▶
I'm a CTO who makes purchasing decisions. There are numerous products I likely would have purchased, but I either find a substitute or just go without because I won't play the stupid "let's get on a call" game.

If your website doesn't give me enough information to:

1. Know enough about your product to know that it will (generally speaking) meet my needs/requirements.

2. Know that the pricing is within the ballpark of reasonable given what your product does.

Then I will move on (unless I'm really desparate, which I assure you is rarely the case). I've rolled-my-own solution more than once as well when there were no other good competitors.

That's not to say that calls never work or don't have a place, because they definitely do. The key to using the call successfully (with me at least) is to use the call to get into true details about my needs, after I know that you're at least in the ballpark. Additionally, the call should be done efficiently. We don't need a 15 minute introduction and overview about you. We don't need a bunch of small talk about weather or sports. 2 minutes of that is ok, or when waiting for additional people to join the call, but beyond that I have things to do.

I know what my needs are. I understand you need some context on my company and needs in order to push useful information forward, and I also understand that many potential customers will not take the lead in asking questions and providing that context, but the sooner you take the temperature and adjust, the better. Also, you can get pretty far as a salesperson if you just spend 5 minutes looking at our website before the call! Then you don't have to ask basic questions about what we do. If you're willing to invest in the time to get on a call, then it's worth a few minutes of time before-hand to look at our website.

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freedomben ◴[16 Jan 25 17:48 UTC] No.42728440[source]▶
Oh I might add another huge thing: Have a way to justify/explain your pricing and how you came to that number. When you have to "learn about my company" in order to give me pricing info, I know you're just making the price up based on what you think I can pay. That's going to backfire on you because after you send me pricing, I'm going to ask you how you arrived at those numbers. Is it by vCPU? by vRAM? by number of instances? by number of API calls per month? by number of employees? by number of "seats"? If you don't have some objective way of determining the price you want to charge me, you're going to feel really stupid and embarrassed when I drill into the details.
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JoshTko ◴[16 Jan 25 19:08 UTC] No.42729495[source]▶
I'm confused by this, why would sales team know in detail the vRAM contribution to sales price, and how is it relevant to your purchase decision? I've never heard of enterprise/SAAS pricing to be based primarily using cost plus pricing.
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freedomben ◴[16 Jan 25 20:14 UTC] No.42730300[source]▶
Some products (especially infrastructure) still bill based on (outdated and often irrelevant) core counts and memory count. A few years ago I talked to a seller of a PDF library/toolkit who wanted to know my production and staging core count before they would quote me a price. Explaining to them that it runs in a serverless function on-demand was fun, especially because they would say things like, "well, what's your average?" I would often reply and say my average is defined by a function where you take the number of active users (which itself is highly elastic) and calculate for average runtime at 4 cores per user for approximately 50 ms per page (which page count is highly elastic too) and sum to get "average core use per month". Needless to say it was like pushing a rope.

More common now with SaaS seems to be employee count or some other poor proxy measurement for usage. I love actual usage based billing, but some of the proxies people pick are ridiculous. Like, if I have 5 seats or 500 employees, but 2 users spend 6 hours a day in the software and then 10 others maybe look at it once a quarter, paying the same for those is absurd and is not usage-based billing at all.

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1. ricardobeat ◴[16 Jan 25 21:40 UTC] No.42731262[source]▶
Usage-based pricing makes sense when you’re buying infrastructure products. For (most?) other things, the price is based on value, not material cost.

The cost of that PDF generation might as well round up to zero, but developing the tech cost multiple man-years of work. How do you price that “objectively” unless you’re given a breakdown of the company R&D expenses, operation costs and margins. That is not a reasonable request. Either you’re happy paying $X because it solves your problem and brings equivalent value to your business, or you’re not.

I do agree seat-based pricing is often ridiculous, but that’s a problem for the free market to solve. Alternatives usually pop up given enough demand.

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2. freedomben ◴[16 Jan 25 22:11 UTC] No.42731557[source]▶
I agree that in general usage-based pricing makes the most sense (particularly as that is a good proxy for measuring how much "value" someone is getting from it), my biggest complaint was that the way they were trying to measure it was dumb and very outdated. It really only made sense in a world where everyone was still running on physical servers or VMs. I would certainly concede that pricing is a very hard problem for a product like this, but whatever pricing they come up with should at least map onto the system it's being used in. Basing it off of number of pages of PDFs generated might would make sense, but they insisted on knowing how many CPU cores I would be allocating (which makes little sense when it's deployed as a highly elastic lambda function!)
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3. eastbound ◴[16 Jan 25 22:44 UTC] No.42731847[source]▶
Salespeople often misunderstand value-based pricing. If a product costing V dollars is made of N parts, then each part provider claims their value is V, so they deserve V-$1.

A PDF conversion may be required for the end-users, but it doesn’t make the entirety of the value of the product. It just doubles it, as well as the N features before that. But although each feature doubles the value of the product, the order of features doesn’t matter; A PDF export might have been added as the second feature, but the 10th feature still doubled it.

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4. doctorpangloss ◴[16 Jan 25 22:50 UTC] No.42731905[source]▶
You sound like the worst possible customer. Don’t you see? Nobody is obligated to serve cheap people.
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5. WJW ◴[16 Jan 25 23:31 UTC] No.42732295[source]▶
It's uncanny how accurately this maps to departments claiming they contribute V-$1 of the total profits. Sales argues they bring all the money, engineering argues sales would have nothing to sell without the products being made, platform claims no products would run without the infra they provide, support claims everything would grind to a halt without their constant babysitting of the users, etc etc. Only HR and Facilities don't claim to be directly responsible for any revenue, but that's only because everyone needs them anyway.
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6. Aeolun ◴[16 Jan 25 23:50 UTC] No.42732456[source]▶
> How do you price that “objectively” unless you’re given a breakdown of the company R&D expenses, operation costs and margins.

You ballpark how long it would take you to build something similar? You don’t need any breakdown for that, just a marginally competent engineer on staff.

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7. stavros ◴[17 Jan 25 01:00 UTC] No.42732889{3}[source]▶
Well, it's all true. Without one of these, there would be no V.
8. immibis ◴[17 Jan 25 16:03 UTC] No.42739238[source]▶
Software developers:

> we can't do estimates.

Software developers as soon as estimating something would be beneficial for them.

> all you need is one of us on staff, to do estimates.

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9. freedomben ◴[17 Jan 25 21:02 UTC] No.42743193{3}[source]▶
> You sound like the worst possible customer. Don’t you see? Nobody is obligated to serve cheap people.

No, I don't see, but it's clear from your personal attack that you do see and that you can help me, so thank you in advance. Please, help me to see.

Can you please point out to me where I'm being the "worst possible customer" ? Is it because I refuse to lie and/or make shit up to jam my extremely square peg into their round hole? (which I might add, would open me to legal liability down the road if I guessed wrong (lawsuit for underpaying license fees), or would mean I drastically overpay and even bankrupt the company if I guess way too high. What if I get one customer and use 500ms of a single vCPU all month, but I guessed 50 vCPU?).

If they want to know things that I don't even know in order to price them, what else should I do? I have a theoretical product that doesn't exist yet, with 0 users, 0 vCPUs, and 0 vRAM because it isn't deployed yet. I have no idea if I'll get 10 users in the first year or 10,000,000. How many vCPUs and vRAM should I tell them so they can price it? Keep in mind this will be deployed in an AWS lambda function so it scales literally on-demand, demand that we have no idea of yet because the product doesn't exist. We also have no idea how much CPU and RAM it will even need, because again it doesn't exist so it can't be profiled or measured. If you can't answer that, I won't accuse you of being "the worst possible customer" ;-)

Maybe a different approach. I have a PDF library that I want to sell you. I typically charge $10,000 per vCPU per month. You are thinking about building a product on top of my library and ask me for pricing (which I don't publish anywhere so you have absolutely no idea what to expect). You have no idea how many users (if any) you'll have, and you plan to deploy this as a lambda function that can scale from 0 to Infinity almost on-demand. I ask you how many vCPU per month you're going to use so I can quote you a price. What is your answer?

10. Aeolun ◴[18 Jan 25 05:49 UTC] No.42746184{3}[source]▶
You can’t do estimates without specifications, which is what everyone wants. If you have a literal product to estimate, it becomes a lot easier.