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💰 SaaS Pricing: 3 Fatal Mistakes That Kill Your ARR

January 14, 2025
12 min read
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Price too low, single tier, wrong feature distribution. The 3 pricing errors bootstrapped founders make — and how to fix them.

The $2M Pricing Mistake

I know a founder who built a great product, got 500 users, and sold the company for $50K after 2 years. Why? He charged $9/month.

$9 × 500 = $4,500/month. Can't afford a single employee. Can't run ads. Can't survive.

Mistake #1: Price Too Low

The Fear

"Nobody will pay more than $10/month for this."

The Fix

Multiply your initial price by 3. Seriously. $15 → $49. $30 → $99.

📈 What happens when you 3x your price:

  • ✅ 3x LTV (obviously)
  • ✅ More serious clients (tire-kickers leave)
  • ✅ Lower churn (invested users stay longer)
  • ✅ Runway to survive and grow

Mistake #2: Single Pricing Tier

One price = one size fits none. The user who'd pay $99 pays $29. The user who wants basics pays $29 but churns because it's "too complex."

The Magic 3-Tier Structure

Starter

$19

80% of features

Pro ⭐

$49

95% of features

Enterprise

$199

100% + custom

Mistake #3: Wrong Feature Distribution

The 80/95/100 Rule:

  • Starter (80%): Enough value, but power users want more
  • Pro (95%): Almost everything, missing only enterprise features
  • Enterprise (100%): Everything + custom + SLA + SSO

💰 Get Your Pricing Strategy Right

CharliA analyzes your market and generates optimal pricing tiers.

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