How to Price Your SaaS — A Formula for Developer-Founders

You picked $9 per month. You picked it because $9 felt safe, and because a competitor charged $12, and because charging more felt like something you had not earned yet.

How to price your SaaS is the question developer-founders get most wrong, and the mistake is almost always in the same direction. You priced against your costs — a $20 server bill and some API credits — when your buyer is comparing against the cost of their problem.

Underpricing does not just reduce revenue. It filters for the customers least able to pay, least likely to stick, and most likely to file support tickets. Price is a positioning signal before it is a number.

Who Has This Problem

You are a solo founder or a two-person team. Your product works. You have a Stripe account and an empty pricing page.

You have no idea whether to charge $5, $50, or $500, so you copied whatever the nearest competitor charges and moved on. Every time someone declines, you assume the price is too high, and you consider lowering it.

Why Cost-Based Pricing Fails

Your infrastructure bill is invisible to your buyer and irrelevant to their decision. They are running one calculation: does this cost less than the problem?

Three forces push developer-founders toward the wrong number.

You know how it was built. You know it is a Postgres table and three endpoints, so charging $99 feels dishonest. Your buyer does not know or care. They are buying the outcome, not the implementation.

You are your own worst comparable. You would not pay $99 for it, so you assume nobody would. But you are not the buyer — you can build it yourself in a weekend. Your buyer cannot, which is the entire reason they are on your pricing page.

Cheap feels safer than rejected. A low price reduces the sting of a no. It also guarantees you need 10 times the customers to reach the same revenue, which is a far harder marketing problem than raising your price.

The Pricing Formula

Work through these in order. Do not skip to the number.

1. Quantify the problem in money or hours. What does your buyer currently spend on this? Two engineer-hours a week at a loaded rate of $80 is roughly $700 a month. That is your ceiling anchor, and it comes from your interviews, not your imagination.

2. Price at 10-20% of the value. If you save $700 a month, $70-140 a month is defensible and easy to justify internally. Below 10% you leave money on the table; above 25% the buyer starts building it themselves.

3. Pick the unit that grows with their success. Per seat, per project, per environment, per 1,000 events. The wrong unit punishes your best customers or caps your revenue. The right unit means your bill rises as their usage does, and they never resent it.

4. Build three tiers, not one. A single price gives a binary yes or no. Three tiers turn the question into "which one," which is a far easier question to say yes to. Make the middle tier the one you want sold.

5. Add a guarantee instead of a discount. "Cancel any time, full refund in the first 30 days" removes the same risk as a lower price without devaluing the product or training buyers to wait for a sale.

Applying it

A tool that saves a five-person team two hours a week each. Ten hours at $80 is $800 a month in recovered time. Ten to twenty percent puts the price at $80-160 a month. Per-seat at $29 lands a five-person team at $145 — inside the band, and it grows when they hire.

That is a defensible number with a sentence behind it. "$9 because it felt safe" is not.

How The Mark Platform Handles This

Every input in that formula comes from earlier in the journey, which is why pricing feels impossible when you skip straight to it.

The Mark Platform's Offer step (Step 5) asks for the pieces in order: what the problem costs your buyer, what your persona's stated budget range is, what the alternatives charge, and what guarantee you can honestly make. It carries your persona's budget field forward from Step 4 automatically, so you are pricing against a documented range instead of a feeling.

The offer evaluation scores what you built and names the specific weakness — no guarantee, a unit that does not scale, a single tier, a price outside your persona's stated budget. Competitor pricing captured during research sits alongside it, so the comparison is on screen rather than in memory.

If your buyer's budget range is empty, the platform says so and sends you back to customer research rather than letting you invent a number. Pricing built on invented inputs is guessing with extra steps.

Why Trust This Approach

Value-based pricing is not a growth hack. It is the standard method every B2B pricing consultant applies, reduced to the version a solo founder can run in an afternoon without a research budget.

It has a hard prerequisite: you need at least five customer conversations where someone told you what the problem currently costs them. Without those, step 1 is fiction and every number after it inherits the error. That is why pricing is Step 5 of the 8-step journey and not Step 1.

FAQ

Should I offer a free tier? Only if free users generate something you need — content, referrals, or usage data that improves the product. Otherwise a 14-day trial converts better and costs less to support.

How do I raise prices on existing customers? Grandfather everyone currently paying, and apply the new price to new signups only. Announce it two weeks ahead. Grandfathering converts a complaint into a loyalty perk.

What if nobody buys at my new price? Four or five declines is not a signal about price. It is usually a signal that the problem statement is not landing, which is a positioning problem, not a pricing one. Change the message before you change the number.

Should I show pricing publicly? Yes. Hidden pricing filters out self-serve buyers, which is most of the developer-tool market, and adds a sales call you do not have time to run.

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Pricing stops being a guess the moment you know what the problem costs your customer.

The Mark Platform walks you through research, persona, and offer in order — so your price has a defensible sentence behind it. Build your offer free →