If Money Doesn't Change Hands You Can't Call A User A Customer
skmurphy.com
skmurphy.com
In our experience at our last company, which was an enterprise software company selling a powerful data analytics platform, almost ALL of the customer negotiations at all stages of the business involved "Most Favored Nation Pricing" clauses - as in, the customer wants to know that no other customer has gotten a better deal. This can be subject to fixed volume discounting, etc. - i.e. someone buying 50 licenses prior to the currently contemplated sale of 20 licenses could have paid less. However, try telling a potential customer that someone previously paid less for the product they're thinking of buying and at a minimum you'll have a hold-up of months of red tape as they get an exception to their purchasing checklist authorized. These corporate purchasing processes are highly inflexible and often imposed by Sarbanes Oxley "internal controls" measures (meaning they're dictated by outside auditors, and not up for discussion) - they are real and need to be factored into pricing strategy.
A good workaround we found is this: make your early licenses have some type of specific restriction or obligation that you will relax in the different class of licenses you will sell later in the company. You might restrict early licenses to dealing with a certain type of data, or you might even add the obligation of participating in a "marketing case study". Do something along those lines (and get it actually written into the contract) so that in the future, you can with good conscience sell less restricted licenses at a higher price point under the inevitable MFN clauses you'll get with Enterpise software sales.
There are many ways to legitimately neutralize/minimize MFN, focus on making your early customers successful.
On the other hand, if you can afford to develop a loyal user base first, then that is your best path to success.
Assuming you don't define success as "stable and profitable company", I suppose it is.
I'm intending to say that building a user base should come before monetizing - not replace it.
Like a rancher is helped by docile livestock. But the relationship between the rancher and the livestock is very different from that between the rancher and the actual customer.
insert joke about currently being called "cattle"
But with TSA, something more important than money is being "handed over"
2. Google is also a monopoly. If you are blessed to be in such a position, almost nothing you read applies.
The end users are Google's product.