Pricing Playbooks for Founders
How founders set, test, and raise prices — packaging tiers, finding willingness to pay, and the pricing changes that quietly doubled revenue. Each tactic is quoted directly from the founder who ran it.
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“You could offer a specific bundle that's getting a deal for maybe not the whole year but a half year or a quarter. You don't necessarily have to merchandise that as part of your normal options all the time, but if somebody is churning and the reason is the length is not right, you can offer it then.”
Keep custom-duration bundles off the paywall — pull them out only for churners
Keep a 3- or 6-month bundle off the standard paywall and pull it out only for churners citing duration as their reason. Custom length unlocks a save without permanently cheapening the catalog or training every user to wait for the discount.
“When you think about freemium, really what the hypothesis is is that you can launch this freemium model that over time will reduce your CAC. That's the goal. I'm building this model that will result in lower customer acquisition costs than if I don't have it.”
Freemium's real goal is lowering CAC, not just adding a free tier
Freemium isn't a feature decision — it's an acquisition strategy. If the free tier isn't measurably lowering blended CAC over time (via habituation, word-of-mouth, organic funnel), it's not working — and a paywalled-only model may serve you better. Always tie the freemium debate back to CAC, not to free-user volume.
“There's a magic rule here with freemium models that I tell everyone to follow: you're really trying to balance increasing conversion versus increasing free user retention. If you double the conversion rate on half the audience you haven't gone anywhere.”
The magic rule of freemium — balance conversion against free-user retention
The freemium failure mode Paul sees most often: optimizing conversion in isolation. Tightening the paywall lifts the conversion rate but shrinks the free funnel feeding it. Net new subscribers stay flat. The two metrics must move together. When forced to choose, weight free-user retention — a larger free pool buys time to optimize the value prop.
“It's not really easy to put ads behind a paywall — it's not a great user experience, I don't recommend it. Instead we find partnership deals with these brands where the brand will give the consumer some kind of exclusive discount or early access, and we'll market that perk natively to our consumers behind the paywall.”
Don't put ads behind the paywall — broker brand perks instead
Surfline replaced behind-paywall display ads with native brand-funded perks (discounts on wetsuits, early access to surf parks). Brands get higher performance than banners and subscribers feel rewarded instead of advertised at — the paywall stays clean while still capturing the brand-revenue upside hybrid monetization promises.
“Grindr now has like a several hundred dollar a month AI that swipes and makes matches for you. Is the average user going to pay for that? No. But 1% of users will, and you're now able as an app to capture so much more value because you're essentially serving not just the product anymore but you can serve outcomes if people are willing to pay for them.”
Sell outcomes, not products — Grindr's $hundreds/mo AI auto-swipe agent
The new monetization frontier is selling outcomes, not features. A small slice of power users will pay 10-50x the base subscription for AI that does the work for them. Mix subscriptions, usage-based, and ads to capture the full demand curve instead of pricing for the median — perfect price segmentation is finally possible.
“The numbers you see first when you read through Apple's documentation are 10% and 17% that basically replace the 15 and 30% typical Apple cut. However Apple now charges 3% — that means you end up at 13% and 20% if you're using IAP.”
New 17%/10% commission balloons to 20%/13% once you add Apple's 3% payment fee
The headline 17%/10% rates only apply if you bring your own payment processor. Stay on Apple's billing and you pay 3% on top, landing at 20%/13% — far less attractive than the marketing suggests. The cut is closer to a few points of relief than half-off.
“The Core Technology Fee is 50 cents per first annual install per year once you've hit a million installs threshold. The interesting thing very easy to miss is that this includes not only 'I tap the button in the App Store to install' — it also includes app updates. So you can think about it as the number of people in the EU that have the app on their iOS phone.”
Core Technology Fee = €0.50 per annual install — counts UPDATES, not just first downloads
The €0.50 CTF isn't just a per-download fee — it triggers on every annual app update, converting it from an acquisition cost into a recurring per-user tax on the entire EU install base over 1M. Free apps with retained users get hammered every year.
“If you have a yearly plan and a conversion rate and you multiply both and it's bigger than five then it makes sense. This is what the numbers say. For second-year renewals it's basically 25 EUR per user that remains.”
New terms only beat the old 30% if yearly_price × conversion_rate > 5
Nico's quick test for whether Apple's new EU terms make sense for your app: multiply your yearly plan price by your conversion rate. If the result is below 5, stay on the old terms. Most freemium apps with sub-5% conversion don't clear this bar.
“The Core Technology Fee is the only fee that you pay. Inside those marketplaces you can use any payment provider you want, you don't pay Apple any commission, you don't pay Apple any billing fee — the only thing you pay Apple in these marketplaces is the core technology fee.”
Third-party marketplaces flip the math — only CTF, no commission, no billing fee
Distribute through a third-party marketplace and Apple takes zero commission and zero billing fee — only the €0.50 CTF per install. The economics get interesting for high-LTV or paid-upfront apps that can absorb the per-install cost without freeloader exposure.
“I see brands shaping their pricing around the specific jobs to be done of users and having different packages based on what are you trying to achieve, what job to be done do you have. Mimo — there's people who want to learn to code just for fun and there's people who really want to become a developer.”
Tier pricing by job-to-be-done — not by feature checklist
Mimo splits pricing by intent (casual learner vs aspiring dev), not by feature count, and uses different support depths per tier. The host applies this to his weather app: a $20 Apple-data tier for casual users alongside a $40 premium-data tier — same product, two jobs, two price points.
“When you're solving new problems, that's a great time to think about that as well. If you create a really big new feature that solves a new job to be done or solves an existing job to be done in a much better way, that's a great opportunity to introduce that higher price tier… it's a lot easier than just raising the price across the board.”
Launch a new tier alongside a new feature — not as a standalone price hike
Bundling a price increase with a meaningful new capability reframes the change as added value rather than a take. Existing subscribers self-select up to the higher tier because they're paying for the new thing, not absorbing a hike. Time price changes to coincide with substantive feature launches.
“We removed plus here, so still we grandfathered I mean we kept using it... we had 100 purchase per day split between plus and Ultra. We still had 100 purchase per day but it was Ultra. You're very far off of like where the main of elasticity.”
Killing the $0.99 tier didn't lose a single sale — demand was wildly inelastic
Genius Scan had a $0.99/mo Plus and a ~$3/mo Ultra. They hid (not removed) the Plus tier from the paywall. Total daily purchases stayed flat at ~100/day but shifted entirely to Ultra. The cheap tier had been siphoning users who would have happily paid 3x more — cheap tiers can be self-inflicted ARPU damage.
“We added a subscription for a new service called Genius Cloud to backup your documents in the cloud, and we kept the one-time purchase for the premium features. The customers were paying for this backup in the cloud but they were buying storage... we didn't get any backlash.”
Sell cloud storage first — then migrate features into the same sub later
Rather than force their utility users onto a subscription cold, they sold cloud storage first — a recurring cost users intuitively understand as recurring. Only later did they migrate premium features into that same subscription, grandfathering every legacy lifetime buyer. The storage wrapper avoided the rage that breaks utility apps switching to subs.
“I also want to see the overall my paid acquisition cost — instead of becoming higher and higher, they maybe stay at the same level or they even go down, because you know the more you spend, if you spend a million if you've spent four million you can expect your conversion rate to go down. What if by doing more awareness campaign I'm able to actually maintain that conversion rate?”
Brand spend success = flat CAC as you scale performance spend
Rather than measuring brand spend by impressions or recall, Bicego measures it by whether paid CAC stays flat or drops as performance spend scales up. Conversion rate normally decays with spend; if awareness work holds the rate constant at higher dollar volumes, the brand investment is provably working.
“You saw a specific feature, you click on it, you get a paywall specific to that content. If you don't unlock it you reiterate everything else you can get with premium, and if they close it then you have an IAP to give them access just to that one feature.”
Cascade: feature paywall → premium recap → one-time IAP fallback
A three-layer flow walks users down the demand curve: contextual feature paywall, then a 'here's everything else premium unlocks' second pitch, then a one-off in-app purchase for just the triggering feature. Captures users who reject subscription but will pay once. Google data shows hybrid monetization is a major unlock Android apps already exploit and iOS lags on.
“Same thing goes with anything — you're price-testing to death and haven't tested anything else, you're missing out, so you need to go in areas where you don't have diminishing returns or where you have big opportunities.”
Stop price-testing to death — test where diminishing returns haven't hit yet
Teams over-index on price A/B tests because they're easy to ship through RevenueCat, but price is usually the lowest-leverage variable once you've squeezed it. Bigger wins sit upstream in onboarding hook, paywall structure, and feature-triggered placements. Prioritize tests by where the curve still has slope.
“We didn't really see much of a change in conversion rate so we kept on increasing the price and we kept on making the app better and better.”
Eight price points $10/mo → $180/yr with no conversion drop
MySwimPro walked pricing through roughly eight different price points over the years, starting at $10/month, then $100/year, $120, and eventually $180. Each bump coincided with shipping more product value, and conversion stayed stable — proof that perceived value, not the headline number, is what gates upgrades. Most apps underprice by default.
“There are people who are willing to spend $200, $300 per year. We don't have a product offering right now and a packaging that is able to access that kind of a price sensitivity.”
Van Westendorp surfaced a hidden segment willing to pay 2-3x more
Fares ran the four-question Van Westendorp price sensitivity survey on free and paid members. The average landed near the current $120/year, but a real cohort signaled willingness to spend $200-$300 — revealing that a single price point leaves money on the table without tiered packaging. The fix is multiple packages, not one optimal price.
“Sometimes you're selling something to do with consumer and to a business, and even on a per-seat basis you need to charge 10x in the business context for exactly the same thing — that's hard... it does take a little bit of value capture arguments and sort of making sure we tell the story in the right way.”
Charging 10x per-seat for the same product in B2B is the hard part
Jacob (RevenueCat CEO) flags the under-discussed challenge of consumer-to-B2B expansion: the same product needs ~10x per-seat pricing in business context, and you can't get there without a deliberate value-capture narrative. Pricing isn't a slider — it requires re-storying the product for the buyer, with productivity or compliance angles your consumer copy doesn't carry.
“That is just straight cash flow for the app developer ecosystem, and Apple will find a way to make it back because then those individuals will either lower their prices to get more people to subscribe, or they generally increase price over time by adding a lot more features because they're just so much more profitable.”
If Apple cuts the 30% fee, developers reinvest in features — they don't lower prices
Crowley's read on a hypothetical App Store fee cut: most developers won't pass savings to consumers — they'll reinvest the margin into features and gradually raise prices over time. The implication is that fee relief flows to feature depth and pricing power, not to lower consumer prices, so subscribers should not expect direct savings.
“In your paywall you optimize the UI and UX so that you're really pushing that lifetime subscription... on your P&L is going to really bump up your revenue. However, to the person who's about to acquire that app, they suddenly cannot monetize those users that you've just sold a lifetime subscription to. So you're actually kind of shooting yourself in the foot.”
Pushing lifetime plans pre-sale destroys the buyer's future LTV
A classic pre-exit red flag is reshaping the paywall to maximize lifetime purchases — inflates short-term revenue but strips future monetization from the buyer. Diligence catches it, negotiations collapse. If you must optimize before a sale, push marketing spend (which generates diligence data) rather than profit cuts or lifetime pumps.
“The one action item is what's the easiest, lowest hanging fruit to use either rewarded ads or one-time purchases in your app? The answer is just to build an economy: introduce a soft currency, which is gaming slang for a way of building an economy that's not based around dollars. It could be gems or flowers or whatever.”
Build a soft currency: lowest-hanging hybrid monetization unlock
Subscription apps only have 3-4 price points (weekly, monthly, yearly, lifetime) and miss everyone whose willingness-to-pay falls between them. Inserting gems or coins lets you plug in rewarded ads (10 coins per view) and tiered IAP bundles (5/10/15 coins) to capture the full demand curve. Deconstruct Raid: Shadow Legends, Candy Crush, or Supercell games as reference.
“all we did was mapping their trial event to trial and their cost per purchase/ the actual cost per trial went down by I think around 35% only with that change same creatives same campaigns just different event optimization”
Remapping trial event from purchase to trial cut CAC 35% — same creatives, same campaigns
One app with a high CAC was optimizing Meta toward purchase events — competing in an auction against e-commerce advertisers willing to pay $200 CPP for a conversion worth only $10–15 to the app. Simply remapping the optimization signal to trial start, with zero creative or campaign changes, dropped cost per trial by 35%. The mechanism: matching your bid signal to what you actually want lowers CPMs from irrelevant high-bidders.
“if we only offer one product so your decision is should I buy or not but if a day will show you three products now you are thinking which one should I get so you bypass the yes or no and then more likely to convert”
Three pricing tiers bypass the buy/no-buy decision and shift users to "which one?"
Presenting a single product forces a binary yes/no decision. Presenting three tiers reframes the choice entirely — the user now asks which one rather than whether to buy at all. Shawn's simplest advice to founders without ML teams: design three tiers with a clear low, middle, and anchor option.
“boost I think it's perfect allocar product why because you don't it depends on when you want to use it right when you don't receive enough likes so you want to boost yourself when let's say you swipe during the peak hours”
Sell boosts a-la-carte because the use case is situational, not habitual
Gong's framework for what should be unbundled: features whose demand is moment-driven — boosts needed when likes dry up, or during peak swipe hours — should not be locked inside a subscription. Selling them a-la-carte aligns the purchase event with the felt need and reduces churn from subscribers who rarely use intermittent features.
“for our 7day passport feature allocart the price is the same as 7-day plus subscription so that case David you think like oh duh then the 7-day plus subscription is a better deal right so that also helped reduce the cannibalization also increase the conversion or revenue”
Price standalone features at parity with short subscriptions to make subscription the obvious deal
When a la carte Passport caused subscription cannibalization, Tinder set the 7-day Passport price equal to the 7-day Plus subscription. Users immediately saw the subscription as the better deal — more features for the same price — and cannibalization dropped while total revenue rose. Price parity is a behavioral nudge that works without removing the standalone option.
“the revenue per user on the web only paywall variant D was $1.96 on the inapp purchase only that was $29... it's about a 6% drop in proceeds on the web versus the inapp purchase”
Web payments at 30% Apple cut is a ~6% wash vs IAP — not the 30% windfall expected
RevenueCat's 4-variant live experiment on Dipsy found web-only checkout netted ~$1.96 per user vs ~$2.03 after Apple's 30% cut on IAP — a 6% gap, not the 30% windfall developers expect. The reason: web flows convert fewer trials despite lower fees. For apps on Apple's 30% standard rate, web billing is worth testing but not the slam dunk the fee savings suggest.
“if you are still in the small business program only paying Apple 15% it's going to be pretty tough to make the numbers work on external purchases you know this is a massive drop in revenue per user sending them to the web versus only using IAP”
If you're on Apple's 15% Small Business Program, external payments math doesn't work
The economics of routing users to web payments only hold up when paying Apple 30%. At 15%, the friction of leaving the app and lower web trial start rates erode any fee savings — resulting in a net revenue drop. Developers under the Small Business Program should stay fully in-app for now.
“don't send everybody to the web don't leave everybody in the app... if you're not in the small business program and you are paying 30% I think the ultimate solution is going to be this hybrid approach where you send some folks to the web and keep some people in the app”
Hybrid paywall (some to web, some to IAP) is the optimal strategy for apps paying 30%
The experiment's conclusion is not binary: web beats IAP or IAP beats web. Web captures fewer trial starters but converts them better and retains them at 5x the rate. IAP captures more trials at lower individual conversion. A hybrid router that directs the right user segment to each channel extracts the best of both — and is likely where the industry lands at the 30% fee tier.
“if monthly plans creep towards like $6 to $10 then an annual an annual at $40 to $60 feels like a bargain in comparison um so the relative saving obviously justifies that higher anchor”
Monthly anchor makes $40–$60 annual plans feel like bargains
Set your monthly plan at $6–$10 so that your annual at $40–$60 reads as an obvious deal — not a luxury. The relative saving does the persuasion work without requiring additional copy. Inflation psychology reinforces this: users primed by Spotify, Netflix, and grocery price increases are already conditioned to accept rising prices, making the annual anchor easier to defend.