How to price your B2B product: avoid the three most common mistakes

Executive overview

Most startups wait too long to charge, set prices too low, and never revisit them. Naomi Ionita draws on a decade of growth and monetization work at Evernote and Invoice2Go — and her current vantage point as a VC at Menlo Ventures — to give founders a practical framework for pricing from day one through enterprise.

The three core mistakes: delaying monetization, underpricing (including leaving money on the table by offering only one plan), and treating pricing as a one-time decision. Fix these and pricing becomes a growth lever, not an afterthought.

Monetization improvements drive 4x the bottom-line impact of equivalent acquisition improvements.

The three biggest pricing mistakes

• Waiting too long to charge trains users to expect your product for free and makes future price introductions harder.
• Underpricing isn't just a low base price — it's also failing to offer tiered plans that capture value from different segments.
• Setting it and forget it: pricing should be revisited every 6–12 months, tied to meaningful product launches.
• Evernote's most common paid conversion reason was guilt — a signal the free tier was too generous, not a sign of loyalty.
• A single premium tier almost always leaves money on the table for high-value segments.

Freemium: where to put the paywall

• Free must include everything needed to reach the aha moment and build habit.
• Free users who don't pay still reduce CAC through organic referrals and viral loops — factor this into the math.
• Day one features: high-value, immediately understandable, should anchor the starter paid plan.
• Day 100 features: advanced functionality whose value requires scale or time; price these into higher tiers.
• Don't waste cognitive load on features users can't appreciate yet — push them into upsell tiers.

Matching price to value

• Pick the right value metric — the unit that scales naturally with customer usage (API calls, messages sent, invoices, storage).
• Usage-based pricing creates a natural escalator: as customers grow, revenue grows without a sales conversation.
• Understanding your value metric also clarifies which customer segments you're building for and lets you target each appropriately.
• Avid Evernote users were paying $45/year but reporting hundreds of dollars of perceived value — a clear mismatch.
• Research methods: feature prioritization surveys (must-have / nice-to-have / not necessary), 100-point allocation across features, Van Westendorp willingness-to-pay curves.

Running a pricing process

• Form a cross-functional pricing committee — not a single-department exercise.
• PLG companies: product growth team (PMs, data scientists). Enterprise: sales, finance, rev ops.
• Talk to customers consistently — surveys and interviews are the fastest way to expand the envelope on price.
• Van Westendorp four questions: too cheap (quality concern), good deal, expensive but still pay, prohibitively expensive. Plot the curves to find your range.
• Identify the one or two features that actually drive conversion — most features on a pricing page are noise.

Experimenting with pricing

• Treat your pricing page like a product surface — run experiments.
• Test value metrics, quota limits, price points, and promotions.
• Segment experiments by geography (Canada, Australia) before rolling out in primary markets.
• Pricing experiments require long time horizons: a year-one discount doesn't reveal its impact until year two churn is measured.
• Tools like Orb and Metronome now handle usage-based billing and metering without requiring a custom in-house build.

When to trade growth for revenue

• If you have a clear path to multiplayer or enterprise, giving away individual usage is often the right call.
• Figma's strategy: free for individual designers, monetize once teams and cross-functional workflows form.
• PLG products where collaboration is inherent should optimize for growth first; let enterprise plans capture revenue later.
• Sales-led enterprise products should establish pricing signals earlier.
• Never optimize for guilt as your primary conversion driver.

The modern growth stack

• The modern growth stack is the set of tools that operationalize what you do with data to drive product growth and revenue.
• Replaces custom-built internal infrastructure for experimentation, personalization, billing, and monetization.
• Three themes: data (break down silos via reverse ETL tools like Hightouch, Census), workflow (self-serve data access for non-engineers), impact (hard ROI in cost savings and revenue).
• Product-led sales tools (e.g., Endgame, Pocus) surface high-intent product users to inside sales teams — "free money" from accounts nobody was watching.
• Experimentation platforms (e.g., Eppo, Amplitude) tie A/B test results directly to warehouse metrics like subscriptions and revenue — no manual Excel stitching.
• Billing and monetization infra (e.g., Orb, Metronome) enable iteration on pricing and packaging without engineering overhead.
• Generative AI will drive the next wave of growth stack ROI, particularly in marketing copy, SDR outreach, and customer support cost reduction.

Pricing model: usage-based vs. seat-based

• Pure usage-based is less than 10% of SaaS companies; most use a hybrid.
• Typical hybrid: good/better/best tiers with a consumption quota baked into each tier, plus overage options.
• Pure usage-based creates CFO unpredictability — buyers want to budget for your tool.
• Package a fixed subscription component with a variable consumption component so customers can forecast spend.