What I got wrong about pricing

Sidecar launched at nine dollars a month. I picked the number in about ninety seconds, because it was less than ten, and ten felt like a lot to ask for software I had written in a fortnight.

It stayed at nine dollars for three years. In that time I added invoice reminders, a second currency, a reconciliation view that took me two months, and support for a payment provider that four people asked for. The price never moved, because moving it felt like something you needed permission to do.

The number was never about the product

Here is what I actually believed, though I would not have said it out loud: nine dollars was what I thought I was worth. Not the software — me. Every time I considered raising it I ran the same simulation, in which a customer sees the new price, feels betrayed, and writes me a long email about it.

That email has never arrived. I have raised prices three times since. The total number of angry emails is one, and it was from someone on a plan I had grandfathered, who had misread the notice.

What actually happened when I raised it

I moved Sidecar from nine to twenty-four, for new customers only. I expected signups to fall by roughly the ratio. They fell by about a fifth.

Revenue per signup went up 2.1×. But the thing I did not expect was the change in who signed up. At nine dollars I had a lot of people trying a habit. At twenty-four I had people with a business problem. They asked better questions. They churned less. They were, bluntly, easier to build for, because they could tell me what they needed in terms of their own money.

A low price does not just earn less. It selects for people who are not sure they have the problem.

The rules I use now

1. Price against the cost of the problem, not the cost of the code. Nobody cares how long it took.
2. Raise it for new customers first. The risk is almost entirely imagined, and this makes it nearly zero.
3. If nobody has ever pushed back on the price, it is too low. Some friction is the signal that you are near the line.
4. Grandfather generously and say so loudly. It costs little and it buys you the freedom to move.

I still find this hard. I set the first Halfmoon price in 2025 and caught myself reaching for a number that felt polite. It is a reflex, and I do not think it ever fully goes away. But now I notice it, and I add sixty percent, and so far the email has still not arrived.