Doing the hard things

And reflecting on one of the more difficult decisions of late.

Last week we updated plans and pricing for the first time ever at beehiiv. Two things can be true at the same time: it was by far the most difficult path forward, and without a doubt the correct thing to do.

Anyone who’s ever built a SaaS business is fully aware of how complex and dreadful of an initiative that is. And anyone who likes to follow tech drama knows that making even the most minute of changes to pricing causes an absolute uproar with users on social media.

But I didn’t launch beehiiv to become the most loved person on social media.

10 years from now I envision beehiiv as a dominant staple in the tech ecosystem — earning billions of dollars per year in revenue and home to hundreds of thousands of happy customers. That’s what we are building towards, and the truth is, we were never going to get there with our previous pricing model.

I’m going to let the air clear a bit before sharing the full decision-making process, analysis, and data from the move. That’s for a future post. But for right now, here’s all the context you really need to know…

Like most startups, we didn’t put a ton of thought into our initial pricing model before we launched.
In the earliest days of building a company, you are juggling countless things just trying to get it off the ground… and you don’t even know if anyone’s even going to sign up and use it. We over-optimized for building the best product to go from 0 to 1, not 1 to N. I don’t regret that decision (it worked), but in hindsight we probably could have avoided this.

The simplicity worked in our favor…
We launched with an oversimplified “all-inclusive” model, where for just $99 /mo you got access to every premium feature, unlimited sends, and could grow to up to 100,000 subscribers. Again, as an early stage company you are juggling so many other things, being able to easily communicate your pricing model is a huge competitive advantage.

Until it wasn’t…
As we grew, that model became a massive point of friction for dozens of different reasons. Smaller users felt like they were getting ripped off “paying for up to 100,000 subscribers” despite only having a couple hundred. Larger users were taking advantage (as they should have) by sending millions of emails per month for just $99. For context, Active Campaign and Mailchimp charge $1,000 /mo and $800 /mo, respectively, and both have limits on volume.

And that’s only the tip of the iceberg. There were so many other issues with the previous model that simply didn’t make any sense and was preventing us from scaling. So I spent months taking note of every single one of those issues and began building a new model that would address each of them.

Fast forward to last week, where we launched a new tier–based model that did just that.

  • Better free plan. New users often complained about wanting the same few features that were previously behind a paywall.

    • We ended up moving those to the free Launch plan to make it even more powerful than before.

  • New features. The three most common requests we got from paying users were to remove beehiiv branding, launch more publications, and access the NewsletterXP course.

    • We launched a brand new Max plan that for the first time gave users the option to do all three.

  • Priced relative to scale. Most importantly, the tier-based model allows us to offer our most popular features (referral program, Ad Network, Boosts, automations, etc.) at a more affordable price for smaller users. And yes, that does mean that larger users would pay more than they were previously.

    • But that’s exactly what you would expect using any software platform — more volume, users, bandwidth, data, API calls, etc. cost more as you grow.

New tiered pricing model

And a little price comparison

If you were to look at this in a vacuum, everyone would nod their heads in agreement that the new model…

  • Solves the prior pain points I identified earlier.

  • Makes a lot more sense overall.

  • Is better optimized both for users and for beehiiv as a business.

  • Remains the most competitively priced platform in the industry.

But the world doesn’t operate in a vacuum.

People don’t measure things in absolute terms, they measure things in relative terms. And generally speaking, they dislike change.

Changing prices for tens of thousands of paying users is fucking miserable. And not only for the users. But internally it requires changing processes, documentation, training, and basically everything else about how the company operates.

I understand why a lot of founders choose not to do it. Inaction is easy.

We could have totally made up a bunch of excuses:

  • “It is what it is, we’ve come this far already”

  • “There are so many other things to focus on than this”

  • “Let’s just do this next year when we have more resources”

But sometimes you have to do what you know is right, despite it being the most difficult path forward.

I tried to remove all the emotion and noise associated with having to rollout new pricing to users. To me, that’s all short-term thinking.

But as I led with earlier, I have a vision for what beehiiv will become over the next decade and am thinking on a much longer time horizon. Decisions like this aren’t easy, but it was undoubtedly the correct one to make for the future growth of the business (and for our users).

I’m writing this Sunday evening. I know Monday will come around and we’ll go right back to work with the same tenacity that our team always does. We’ll continue to ship the most impactful features possible, improve every user experience, and ensure beehiiv continues to be in a league of its own. Those are the things that I can control.

I can also control who we choose to hire and the type of culture we’re fostering. Our company culture put pretty simply — we just give a shit more than anyone else. Whether it’s our engineers doing user migrations on a Saturday morning, or our sales team giving demos on Thanksgiving. From top to bottom our team just cares more and it shows.

Sometimes you just need to control what you can control, and ignore all the noise. Sometimes it’s doing the hard things that make all the difference.

Onwards and upwards 🫡.

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Some of my favorite content I found on the internet this week…

  • Augusta officials asked Jason Day to remove his “busy” clothing at The Masters. This is why Saudi Arabia owns golf now (Golf)

  • I loved Ben Thompson weaving in his 10 year anniversary, Marques Brownlee’s review on the Humane pin, and AI all into one masterpiece of a post (Stratechery)

  • Sherwood (wassup) wrote a column on how Reddit is changing the way its homepage works (Sherwood News)

  • Taylor Swift doesn’t give a fuck 👇️ 

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