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Asana's shocking pricing practices, and how you can get away with it too

Posted nine years ago

If one apple costs $1, how much would five apples cost? How about 500?

In everyday life, when you buy more of something, you get more bananas for your buck. The fixed costs decrease. If you sell a lot of apples to one person, you don't have to wrap each one, you don't have to pay fixed transaction fees on each sale, and you don't have to worry about finding someone to buy the other 499 apples. The savings are passed on to the consumer. Often, software is priced this way too. That's why I love Asana's pricing page. It breaks the rules.

Asana prices their product based on its value. It lets teams coordinate about projects and tasks they are working on. Asana is very clear about the value they give. In fact, the pricing page tells you that the only difference between the paid and free versions is that "premium plans allow you to coordinate with more team members, as well as the features listed in the table above. All other user features are exactly the same."

It's a mathematical law that as the number of people in a team grows, the number of communication paths grows quadratically. A company with 100 people using it is therefore getting much more value out of it than a company of 15 people, so they pay higher per-seat costs.

Homework

What is the one thing that gives your software value? Are you directly charging for that thing, or something else? How can you take advantage of team effects to provide more value when more people use it?

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Steve Hanov makes a living working on Rhymebrain.com, PriceMonkey.ca, www.websequencediagrams.com, and Zwibbler.com. He lives in Waterloo, Canada.

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