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Thinking of ways to monetize your web3 product?

Here’s a quick pricing guide with examples to learn from:

Inspired by @a16z's workshop on #web3, @jasonrosenthal and @meigga from @a16zcrypto share practical insights on pricing strategies for web3 startups.

Get ready to dive into the world of pricing in the decentralized era!

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Let's explore the 6 key questions 
to consider when pricing 
your web3 product:

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1. What is the most optimal 
pricing model for your product?

First, think about the ways of pricing in the web3 space:

• User-based pricing, just like how @SlackHQ charges per user.
• Usage-based pricing, similar to @awscloud and @Azure.
• Feature-based pricing, offering different options for free, premium, and enterprise users based on the services they sign up for.
• Value-based pricing, charging based on the capability to replace manpower, a concept embraced by companies like @PalantirTech.
• Services-based pricing, for professional consulting or custom reports.

• Transaction-based pricing, charging per transaction made on your platform.
• Dynamic pricing, where your pricing varies depending on volume and demand.
• Revenue share, like how @Google and @YahooFinance participate in revenue sharing.
• Subscription pricing, a powerful model that ensures a growing revenue base on top of stability.

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2. Are you charging the right price for your web3 product?

If you're in the early stages or beta phase, conduct AB tests on pricing with a small cohort of prospective customers.

Remember, keep the results private during the testing phase.

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3. Can you segment your product offering effectively?

Arrange your product capabilities into well-defined buckets, so your customers understand why they come at different prices.

Tailoring specific groups of services can also strengthen your product launch.

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4. Consider the pricing of related products and services in the market.

This acts as your cheat sheet.

Identify the differences and use them to differentiate your own pricing strategy.

Stand out from the crowd!

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5. Don't forget about unit economics!

Ensure that your company's revenues and costs related to an individual unit of production are profitable.

Achieving product-market fit is crucial to sustainability and success.

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6. Is the market $$ big enough?

If you are a startup, you devote your life and souls, and employees’ lives into building,

make sure the potential markets will be big enough to make it worthwhile.

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3 Different Models for Common Businesses in Web3

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1. Marketplace Models 
(eg. for NFT holders)

Marketplace models, eg. for NFT holders you sell it to buyers and sellers, charge the combinations

• transaction based: if you have high amount of trading
• subscription-based: when it’s hard to estimate the net value

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2. SaaS Models

3 tiers for SaaS products to charge: you sell it to individuals, teams, and enterprises, at different prices.

When usage and features increase, you charge more.

eg. @AlchemyPlatform — web3 development tool or @nansen_ai —web3 analytics

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3. Insurance & Protection Models

Companies offering insurance and protection from hacks or scams. They sell services to NFT holders and creators.

And the pricing is quite different: value of wallet assets vs. cost to fix.

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Smoothie’s Take:

Pricing in web3 demands a strategic understanding of your product, customers, and market.

It’s a balance between profitability and creating recognized value.

Always remember, a successful pricing strategy is an ongoing journey, not a one-time decision.

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