Python for Entrepreneurs Transcripts
Chapter: Making money (credit cards and businesses)
Lecture: Sales and pricing models
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0:01
So let's talk about how you are going to price and sell your product or services. We have a product and we want people to buy it.
0:10
It seems to me there is three popular basic ways that are generally accepted for this, we could have our customers come in and say
0:19
alright, "here is what we offer, it's this price per month, enter your credit card and we will charge you indefinitely".
0:26
So, we could use a subscription and here we'll charge them a small amount over and over.
0:31
This business model, it's quite popular and growing in popularity because once you get somebody to sign up, it's great.
0:39
Right, I am thinking of things like 1Password that used to be able to buy it for 25 bucks,
0:44
now it's 6.99 a month, indefinitely. Right, so that's great work if you can get it, but then you end up with a lot of challenges,
0:53
you end up with having to make sure there is always some reason for customers to stay, that they are always continuing to get value from you,
1:01
continue to get more value, and that sounds really great, but it can also put competitive pressures on you that are not great,
1:08
I am going to give you an example at the end, where this might not have been the best choice.
1:13
So this is very popular, it works pretty well, it's well known, it's well understood, but many people are reluctant to buy a subscription
1:20
that could just go on and on and on, they like to get a thing and own it. Well, if you have a thing, a customer can come along,
1:26
they can pay you more money and they can own that thing. So for example courses at Talk Python Training, this is how you buy them.
1:34
I ask a little bit more money than a subscription, a lot of these video places are like
1:38
30 bucks a month, for my courses I typically ask 40, 60, 70 bucks, something like that,
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but once you pay one time, it's yours forever, at least until I go out of business
1:49
and something terrible is wrong, but until then, I'll give you access forever, you don't have to pay again to get access to this course,
1:57
you have it as a reference and so on, it's something that you almost own. Another way is to say "look, I am going to get a lot of users,
2:05
not just a reasonable amount but a lot of users and I am going to have a thing the users are going to come,
2:12
check out the thing, but instead of having them pay for it, I am going to sideload that, I am going to give them a little bit of an ad,
2:18
and I am going to charge the advertisers a couple of them lots of money and it will be free for all the many users".
2:25
So an example of this might be my podcast, right, like my podcast is entirely free,
2:29
at the time of this recording it's coming up on 3 million downloads, and nobody who has downloaded has given me any money
2:39
for the right of downloading and listening to it, I just do it for free. But because I have so many listeners and users,
2:44
I can go and speak to companies that have something to sell, something to communicate, the story they need to get to the Python audience,
2:52
and they are very happy to pay a decent amount that makes the podcast ad model work. If I try the ad model on the courses, maybe I could make it work,
3:01
maybe I couldn't, I could tell you right now, with the number of users I have, the ad model would not work. I have a good number of users,
3:08
I am very happy how that's going, but it's not 3 million. So these are different scales, you really got to think about it, so like I said,
3:16
I'll give you an example, like subscriptions, I think this is what people go to first,
3:19
it's really tempting to say "I am going to set up a renewal, automatic renewal billing,
3:24
give me your credit card every month I am going to charge you 10 bucks", whatever it is, it could vary.
3:31
This works OK, it works pretty well for software if it's software people are going to use all the time, like Office, people use Office a lot,
3:39
they are happy to pay like 6.99 a month, a lot of the online course models have this, but I decided when I came along with mine that I was going to go
3:50
with the single purchase, so why did I not do the subscriptions? Well, if I look at the competing, the other companies making online courses,
3:59
so those might include Pluralsight, it might include Lynda.com, things like that,
4:05
those are good people I know some of the folks at each of those companies. But, the challenge I have is I think my courses are pretty high quality,
4:13
it's what people tell me, it seems like the feedback is really good,
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I put a lot of energy to make them highly polished and hopefully you are enjoying it.
4:21
But, because it's just me, me and Matt and a few people in the future but it's not a huge number of people, if I am going to try to compete
4:31
against a company like Pluralsight, they have like five thousand courses, so a subscription to my place for a couple of courses,
4:39
even if you really like these courses, and a subscription to a place of five thousand courses those are really unbalanced,
4:45
and it's really challenging for me to make the case, "you should have your subscription with me, than you should with the other place".
4:51
On the other hand, if you want to learn one thing, if you really want to learn about Python and building web apps,
4:57
that you can create as business, like this course, where you really want to get started,
5:01
you want to take the Jumpstart course- well, if the price is not too high, it makes total sense to pay that one time to learn that thing high quality
5:10
in a place that you know and trust. OK, but it doesn't necessarily mean a subscription that is going to go on and on and on,
5:18
if I can only generate five courses a year. Maybe that makes sense, maybe it doesn't. My calculus was that the single purchase model would alleviate
5:27
some of that catalog unbalance friction that I would have to really compete uphill against, and I think that's worked really well.
5:36
Hopefully that little look inside my thinking, whether it was flawed or not, it seems to be going OK but that's what I came up with,
5:43
hopefully that gives you an understanding how to price your model, looking at your competitors, and so on.