(Planetscale employee) This is very different though: it's not a free tier, it's an actual single node DB as a paid product. It's definitely not a good fit for every usecase, but if you have a hobby project it's a great way to start with plenty of room to scale if/when you get actual usage

It's very similar in that it's not a huge source of revenue for Planetscale, so easy to pull the rug without disrupting revenue too much

Similarly to other replies (but my own opinion): it's not a huge source of revenue today, on a single customer basis, compared to our biggest customers, sure. But our goal is to provide potential customers that can't justify larger scale, 3-nodes databases, something they can build on and grow on our platform. We would never want to pull the rug on paying customers: we want to enable them :-) sure it's not a huge part of our revenue, but that's not the goal. We just want to provide a great product, in a way that's affordable to everyone. You of course don't have to take my word, but I think it makes business sense to do this and not pull the rug. Compare to a free tier where you bleed money in the hopes that customers will end up paying you. Hope isn't a good business strategy right? :-)

this makes no sense to me

In what way? Companies drop/move on from small customers all the time as positions and analysis changes. $5 a month might make sense now, but with thin profits, a lower than predicted "upgrade rate" and maybe a higher than anticipated support cost etc and this becomes a less profitable option without price increases, which loses customers causing more increases because of none scalable costs etc.

Throw in a change of leadership or business focus and it's an easy short term boost to drop the many smaller customers and focus on the big fish who make the real money.

It's a common pattern, echoed over many industries, and while you might not see it being likely here right now, if the concept literally doesn't make sense to you, you need to look up some basic business ideas because it's a pretty valid concern.

It's easier to pull the rug out from under a group of customers who earn you 5% of your revenue than it is to do the same thing to a group of customers who make you 25% of your revenue.

This small $5 plan is obviously not going to make Planetscale very much revenue.

It's not made to make money, but to funnel paid customers onto their platform.

but its entry level pricing for customers that grow. it will be great for us. there is no point hurting our reputation and slowing growth.

You were buying flow for your sales funnel with a free plan now you want to attract users with a low tier plan. Your reputation was hurt with the first rug pull so why be surprised that users expect another rug pull from you in the future?

I think what Sam means is $5/mo is already profitable for them. Free plan wasn't.

If a free plan attracts users that can be upsold is that free plan not profitable _vs_ paying for advertising?

If such upselling is done via rug pull tactics it damages your reputation vs never having a free plan in the first place.

If a new bank offered you free or discounted banking would you move over your accounts and payments and credit cards? What if that bank has a reputation for upselling via rug pulling?

For users the cost of switching can mean that services that are free or cheap are not worth it if they are expecting a rug pull.

I agree, removing the free plan was a bad move. They should have at least grandfathered existing free tier users. I was just explaining their point of view.

When you don't need advertising anymore, the free plan starts becoming a net loss. If the $5 plan is profitable today, it will probably stay profitable forever as their costs will only go down, never up. There is little incentive to remove it (until Broadcom or Oracle acquires them).

You did a good job explaining their view. What I am doing is explaining the view of users and judging by your last post I have not yet done a good job so let me try again:

If elimination of a service plan is expected to push enough users to a _more_ profitable service plan why would a business not do it? Does it matter if the plan to be eliminated, generates _some_ profit?

Hope this helps!

Why would we? we make a (small) profit on these cheaper tiers. We are a sustainable and profitable company. Also the free tier wasnt cancelled very recently it was 1.5 years ago so you are reaching a bit here.

Why would a company squeeze customers after making them dependendent? Never heard of it.

Also what was capitalism again?

the reason we make sure all our products are gross margin positive is so this doesn't have to happen.

Your $5 plan may be gross margin positive but incentives are to push users into higher margin plans and from this pov this new plan looks much like your previous free plan which was rug pulled. Offering a free service to buy users then imposing migration costs on these users when you rug pull damaged your reputation. Next time perhaps grandfather existing users instead. If you want this new plan to be taken seriously update your terms to promise you will not rug pull again.

Do you intend to sell to people with one brain half or how should I interpret this argument?

This is a lazy response.

You currently make a small profit on cheaper tiers. Things change

Compute, storage, and network throughput are only getting cheaper over time. Assuming all other costs hold steady, it should only get more profitable.

A bit of unsolicited advice:

This post is the first time I've heard of your company and your blog post interested me.

When proprietors go to the mat in the comment section, I immediately lose any interest in patronizing them.

I know comments section drama is fun, but I'm not seeing it here and it feels like you're trying to create it from scratch.

I think it's great evening entertainment. Keep fanning the flames while I go make some popcorn!

Sam is a great twitter follow

thank you

Off-topic, but you have a typo on your pricing page: "high-availablity"

why is it going to the mat? i had to correct something that was untrue. 1.5 years is not very recently.

1.5 years ago is recently IMO.

Case in point. Potential customers will see this dismissal as the equivalent of how long they expect this pricing to remain. You’re free to increase the price in a year and when customers are irked, “why isn’t it $5 anymore?” They’ll be met with “that’s not recent.” “That was so long ago”

If you want to rebuild reputation with hobby tier, you’ll probably want to put in a 3 year pricing guarantee, not 1 month like the notice last time.

He's responding in good faith to people expressing doubt that they will maintain this pricing tier, and is responding to rebuttals. Whether you agree with his point of view is different.

Your loss, Planetscale is an amazing product.

What other free thing did people switch to? Nothing good seems free anymore.

free tiers are a subsidy paid by either VCs or paid users that in some cases can function as a marketing cost, if the free tier is time-limited and thus represents a finite cost to the business.

far better to just have transparent pricing that takes customer needs into account. bravo planetscale