How to Price Your Subscription App

Most Builders Price Too Low

The number one pricing mistake for solo founders: charging too little. You set $5/month because it feels safe and low-risk. But at $5/month, you need 2,000 paying users just to make $10K/month. That is a lot of users.

At $29/month, you need 345. At $49/month, you need 204. Higher prices also attract more serious users who churn less.

Free Tier or Free Trial?

Free Tier (Freemium)

Users get a limited version forever. Good when:

• Your product has network effects (more users makes it better)
• Free users generate content that attracts paid users
• Your marginal cost per user is very low

Examples: Notion, Figma, Slack

Free Trial

Users get the full product for a limited time. Good when:

• Your product's value is obvious but takes time to realize
• Free users are expensive to serve
• You want higher conversion rates (trials convert 2 to 3 times better than freemium)

Neither

For some products, a demo video and a money-back guarantee work better than either option. This works when your product is straightforward and the target buyer is willing to pay upfront.

Monthly vs Annual

Offer both. Price annual at a 15 to 20% discount. Annual plans reduce churn and give you cash upfront.

Display the annual price as a monthly equivalent: "$29/mo billed annually" instead of "$348/year." People compare monthly numbers.

How to Figure Out Your Price

1. Look at what competitors charge
2. Ask 10 potential users what they would pay (the answer is usually 50% of their real willingness)
3. Start higher than you think. You can always lower prices, but raising them is hard.
4. Test different prices with different landing pages and see which converts better

Usage-Based Pricing

Some apps work better with pay-per-use: API calls, AI generations, storage. This aligns cost with value and removes the "is this worth $X/month" question. The downside: unpredictable revenue and harder-to-understand pricing pages.