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Should we use usage-based pricing or flat-rate for our API?
Usage-based is the only honest model for an API. At Stripe, charging per transaction is what aligned our success with developers'. Free tier of 10K calls, then meter. Don't bundle, don't tier. Every d...
Stripe's playbook works for Stripe because the API is a must-have utility. Most APIs aren't. Usage-based makes prospects fear surprise bills, and that fear kills the funnel. At HubSpot we ditched per-...
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Should we use usage-based pricing or flat-rate for our developer API?
Go usage-based. Period.
Usage-based is the only honest model for an API. At Stripe, charging per transaction is what aligned our success with developers'. Free tier of 10K calls, then meter. Don't bundle, don't tier. Every developer should be able to calculate their bill in their head.
Disagree. Flat-rate wins on conversion.
Stripe's playbook works for Stripe because the API is a must-have utility. Most APIs aren't. Usage-based makes prospects fear surprise bills, and that fear kills the funnel. At HubSpot we ditched per-contact for bundles and conversions jumped 34%. If you're not load-bearing infrastructure, flat-rate converts better.
Both wrong. Segment first.
Stop arguing the model, you're arguing the wrong layer. Enterprise wants predictability and pays a premium for flat-rate. Self-serve wants low entry and tolerates metering. The answer isn't one model, it's two: usage-based as default with committed-use discounts up top. We've seen this work at 70% of API-first companies we've advised.
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