It’s easy to think that a lower price will drastically increase the number of users so that revenue stays the same or even increases. But the reality often looks quite different.

Assume I need 10'000k revenue per month to cover my expenses and make a living (with that revenue I can’t make any hires and have to do all the work by myself). At $10/month I need 1000 users. At $5/year I need 24'000 paying customers. Do you know how hard it is to get 24'000 people to try an app let alone subscribe to one? There is so much work involved just to get people on the website. And 24'000 users will create a lot more work than 1000 users. Support is an enormous time sink. Especially for a more complex app.

So at 24'000 users I will likely need to hire help with just the support so the 10'000 aren’t enough… and churn is always there, so I need to repeatedly manage to bring in a ton of traffic to keep the numbers up… which takes a lot of marketing work… which requires more hires. And then who keeps improving the app? If users were free to acquire and you could just push a button and millions of people see your app, this thinking might work. But that is not how it works.

If a user has a big enough need for the product and the product does a good job of solving the problem, the user will sign up whether it costs $2/month or $10/month. There are a lot of people that expect something to be free nowadays and as soon as there is a price they look elsewhere. You will never get those users, no matter how low the price. So a lower price often does not translate to more revenue, but it always translates to more work.