Python for Entrepreneurs Transcripts
Chapter: Making money (credit cards and businesses)
Lecture: Sales and pricing models
0:01 So let's talk about how you are going to price and sell your product or services.
0:07 We have a product and we want people to buy it.
0:09 It seems to me there is three popular basic ways
0:12 that are generally accepted for this,
0:15 we could have our customers come in and say
0:18 alright, "here is what we offer, it's this price per month,
0:22 enter your credit card and we will charge you indefinitely".
0:25 So, we could use a subscription
0:27 and here we'll charge them a small amount over and over.
0:30 This business model, it's quite popular and growing in popularity
0:34 because once you get somebody to sign up, it's great.
0:38 Right, I am thinking of things like 1Password
0:40 that used to be able to buy it for 25 bucks,
0:43 now it's 6.99 a month, indefinitely. Right, so that's great work if you can get it,
0:48 but then you end up with a lot of challenges,
0:52 you end up with having to make sure
0:55 there is always some reason for customers to stay,
0:58 that they are always continuing to get value from you,
1:00 continue to get more value, and that sounds really great,
1:03 but it can also put competitive pressures on you that are not great,
1:07 I am going to give you an example at the end,
1:09 where this might not have been the best choice.
1:12 So this is very popular, it works pretty well, it's well known,
1:15 it's well understood, but many people are reluctant to buy a subscription
1:19 that could just go on and on and on, they like to get a thing and own it.
1:22 Well, if you have a thing, a customer can come along,
1:25 they can pay you more money and they can own that thing.
1:28 So for example courses at Talk Python Training, this is how you buy them.
1:33 I ask a little bit more money than a subscription, a lot of these video places are like
1:37 30 bucks a month, for my courses I typically ask 40, 60, 70 bucks, something like that,
1:42 but once you pay one time, it's yours forever, at least until I go out of business
1:48 and something terrible is wrong, but until then, I'll give you access forever,
1:52 you don't have to pay again to get access to this course,
1:56 you have it as a reference and so on, it's something that you almost own.
2:00 Another way is to say "look, I am going to get a lot of users,
2:04 not just a reasonable amount but a lot of users
2:08 and I am going to have a thing the users are going to come,
2:11 check out the thing, but instead of having them pay for it,
2:13 I am going to sideload that, I am going to give them a little bit of an ad,
2:17 and I am going to charge the advertisers a couple of them lots of money
2:21 and it will be free for all the many users".
2:24 So an example of this might be my podcast, right, like my podcast is entirely free,
2:28 at the time of this recording it's coming up on 3 million downloads,
2:32 and nobody who has downloaded has given me any money
2:38 for the right of downloading and listening to it, I just do it for free.
2:41 But because I have so many listeners and users,
2:43 I can go and speak to companies that have something to sell,
2:47 something to communicate, the story they need to get to the Python audience,
2:51 and they are very happy to pay a decent amount that makes the podcast ad model work.
2:56 If I try the ad model on the courses, maybe I could make it work,
3:00 maybe I couldn't, I could tell you right now, with the number of users I have,
3:04 the ad model would not work. I have a good number of users,
3:07 I am very happy how that's going, but it's not 3 million.
3:10 So these are different scales, you really got to think about it, so like I said,
3:15 I'll give you an example, like subscriptions, I think this is what people go to first,
3:18 it's really tempting to say "I am going to set up a renewal, automatic renewal billing,
3:23 give me your credit card every month I am going to charge you 10 bucks",
3:27 whatever it is, it could vary.
3:30 This works OK, it works pretty well for software
3:33 if it's software people are going to use all the time,
3:35 like Office, people use Office a lot,
3:38 they are happy to pay like 6.99 a month,
3:42 a lot of the online course models have this,
3:45 but I decided when I came along with mine that I was going to go
3:49 with the single purchase, so why did I not do the subscriptions?
3:52 Well, if I look at the competing, the other companies making online courses,
3:58 so those might include Pluralsight, it might include Lynda.com, things like that,
4:04 those are good people I know some of the folks at each of those companies.
4:08 But, the challenge I have is I think my courses are pretty high quality,
4:12 it's what people tell me, it seems like the feedback is really good,
4:15 I put a lot of energy to make them highly polished and hopefully you are enjoying it.
4:20 But, because it's just me, me and Matt and a few people in the future
4:27 but it's not a huge number of people, if I am going to try to compete
4:30 against a company like Pluralsight, they have like five thousand courses,
4:33 so a subscription to my place for a couple of courses,
4:38 even if you really like these courses, and a subscription to a place
4:41 of five thousand courses those are really unbalanced,
4:44 and it's really challenging for me to make the case,
4:46 "you should have your subscription with me, than you should with the other place".
4:50 On the other hand, if you want to learn one thing,
4:53 if you really want to learn about Python and building web apps,
4:56 that you can create as business, like this course, where you really want to get started,
5:00 you want to take the Jumpstart course- well, if the price is not too high,
5:05 it makes total sense to pay that one time to learn that thing high quality
5:09 in a place that you know and trust.
5:12 OK, but it doesn't necessarily mean a subscription that is going to go on and on and on,
5:17 if I can only generate five courses a year.
5:20 Maybe that makes sense, maybe it doesn't.
5:23 My calculus was that the single purchase model would alleviate
5:26 some of that catalog unbalance friction
5:30 that I would have to really compete uphill against,
5:33 and I think that's worked really well.
5:35 Hopefully that little look inside my thinking, whether it was flawed or not,
5:39 it seems to be going OK but that's what I came up with,
5:42 hopefully that gives you an understanding how to price your model,
5:46 looking at your competitors, and so on.