I’ve been a paid subscriber since I your were on Medium. I think that $7/month is a bargain for what you offer and I am happy to support your work. I don’t know what is a “break even” price for me would be. And it would certainly depend on my ability to get things reimbursed.
I believe you can help people get your newsletter reimbursed. Specifically, it would help if you write a public post talking about the changes in behavior / performance to expect from people who sign up. The target audience for your post would be management. Engineers would send a link to that post to their leadership and ask if leadership is willing to pay for it.
As somebody who makes these decisions, I would recommend to be very specific about expected outcomes: what skills will people gain and what behaviors will they learn and in what timeframe? The big upside here is that people who are learning would be accountable too. There is a huge difference between “I like to read this blog for entertainment, can company cover this?” and “In my last performance review you have mentioned that I need articulate the trade offs to others better to drive consensus on the team faster. This blog offers a lot of very specific advice on how I can improve. Can you pay for my subscription for 6 months and see if I improve?”
That sounds like a great topic for a Thread post--let folks fill in their own answers. I'll confess that for me I'm driven by the "how cool is it to better understand design!!!" factor.
Different opinion: you forced people to take a stance. It is no longer attractive to stay undecided. In a way it's a bluff that worked out. It also means a lot of people felt that your thinkies are worth paying for. Congrats 🙂
I hadn't even thought of expensing it until Kent mentioned that -- I signed up for my own edification, not because I viewed it as beneficial to my employer (although they may get some indirect value out of it over time). I figured $70/year was a reasonable personal expense, given that I pay similar amounts for about half a dozen other (non-tech) newsletters. And I think I get enough personal value out of it to justify $70/year... but I couldn't justify $250/year for a single newsletter -- if I add up all the paid tech services I use (and cover out of my own pocket for home use), it would be less than $250/year.
absolutely this. I have thought about signing up for quite a while, but it wasn't until Friday that I could actually get around to do it. Having a "deadline" definitely helped.
I've helped companies increase margins and design pricing for ~8 years.
What you're describing is common. Here is what I've discovered via experimentation and interviews w/ shoppers and consumers:
1. When someone else is paying for it (e.g. a business expense), many consumers don't care about price – as long as long as they don't perceive it as a scam / price gouging.
2. How consumers calculate value for money (VFM) is more like a step function than a linear slope:
a) Some find will never pay for it
b) Some will equate it as a nice-to-have / luxury (like a Starbucks drink) and will place a low upper bound on prince, ~ $10
c) Some will find it extremely important to their work. Their willingness to pay is orders of magnitude more, e.g. ($150+)
So to figure pricing, you need to combine 1 & 2 from above and do your best to guess about how many you will attract of each category
For example, I plan on starting a paid newsletter and will probably charge around $475/ year. I will optimize the content for a customer whose profile is 1 + 2c (people who charge it to biz and find it essential to their work). I will also ensure the content is very personalized to the audience as well and directly addresses their problems (versus general posts). If I attract 100 customers, then I have a good newsletter biz.
For you, you may consider two tiers and types of newsletters. A newsletter for 1+2b and a newsletter for 1+2c
Sorry, just getting around to reading this one. While the lesson about motivation may have been new for you (no disrespect in that), it probably isn't an unknown thing. Unfortunately, I can't explain it, but I have seen that effect previously. In particular, I used to work for a company that sold financial investment advice by subscription newsletter, and they were frequently doing promotions along the lines of "For the next week only, subscribe to newsletter X for only $D, a savings of P%!!! Act Now!!!" (Curiously, as I type that, it sounds like it's a phishing attempt, I doubt that's a coincidence.) They had a number of differently focused newsletters, so they'd end up running these kinds of promotion several times a year to bring in a bunch of new subscribers. I also tended to feel a little icky about it (not that it was under my control or even influence), as it seemed to me that the marginal cost per subscriber was pretty much constant and they were creating an artificial sense of scarcity , but it did work for them. Anyway, no conclusions here, just offered as grist for your thinking mill.
First time reading your content. I enjoyed it. The way I see it is that value is subjective. I'm sure you came to that realization when sales boosted. Congrats! Aside from that price point would be more advantageous for you or the subscriber, the increase in sales is a great reflection of your hard work and value.
The price increase knocked me off the fence. I've been a long-time reader of Kent's work (Extreme Programming was an early, and influential, purchase not long after it dropped).
For those who jumped in because of the increase, maybe this is an example of Loss Aversion. The $18/mo increase (39%) might be seen as a loss for those who wanted to subscribe, but were just not strongly motivated ("there's no rush, I'll get around to it eventually") or the procrastinators ("There's always tomorrow").
That $18/mo just galvanized them into action. It did that for me, at least.
And to be explicit, this strategy doesn't create additional value or meet a new customer need. Instead, it catalyzed the decision-making process for customers who were already prepared to purchase but had yet to proceed to checkout. The introduction of a sense of urgency unlocked these sales. This strategy is effective because it targets a customer base inclined to purchase the product or service.
Hi Kent, it seems you would like to understand better why there's a sudden influx of paid subscribers. As one of the new paid subscribers, let me share my experience & thought process so it may be of use for you:
I am a software engineer by trade, with 7 years' experience and based on Indonesia.
I first happen upon your writing in ~2 years ago, it was "Test Desiderata" article. At the time i was struggling to decide about what kind of test (unit test vs integration test, isolated based vs social based, etc) that i should pursue, and "Test Desiderata" article help me to think in a more structured way on what kind of tests that are important in my own project. Since then, i regularly checkup your blog (i think it was on medium?) to see if there's any more interesting articles that you recently write as usually it's intellectually stimulating for me to read & think about your article.
I think i subscribe (free) to your substack around 1 year ago. At the time, i was trying to find motivation to consistently checkup on my work email every day. Checking up work email was boring before, but after subscribing to your substack (and some other's substack) checking up work email become motivating, because occasionally there's intellectually stimulating email/article i could read. At this time, i am aware there's paid subscription but i never pay too much attention to it, as i don't know much about what will i get if i paid.
Then come your post about increase in price of paid subscription. After reading that, i have this strong urgency to consider whether i would do paid subscribe or not. I am not sure if paying subscription is going to be a good investment for me, but i am willing to try (this is the first time i paid subscription in substack) this out to know whether it's going to help me (in particular my career), and i trust you & your quality from my 2 years experience consistently reading your articles.
let me share some of my thoughts on question/topic you have posed:
> Folks signing up recently already knew about the value
To be honest, i am not sure if i knew the value of paid subscription before actually pay & subscribe to it. I had an inkling that paid subscription will give me more access to your writing, but i am not sure if the paid writing is going to be so relevant to me that i am willing to pay more for it, especially in comparison to stuff that i normally willing to pay for (Books, online library subscription, and specific training course [GCP ML engineer course]).
> People & their motivations are mostly opaque to me.
I think one possible explanation is your subscription price increase news is treated as a discount event (like year's end discount), which make people's mind to consider strongly whether to buy or not as it's time limited event. normally, people are usually ignorant. For me personally this urgency to consider buying combined with good will created from 2 years experience of you consistently writing interesting article is decisive factor in paying for paid subscription.
I’m among those who just subscribed, and yes, it was because of the price jump. I’m not sure that I’m gaining value yet, but I might in the future, so it’s worth it to me to lock in the price. I have no expectation that I could expense this, as I have seen little evidence that my employer cares. I’ve tried to introduce ideas for years, with little management enthusiasm, so it’s just for me.
It is indeed difficult to convince management with details and technical stuff. Might be easier to just ask for training material budget and expense to something like "Premium articles on advanced software engineering techniques".
1. Sleazy car salespeople sell lemons to people who don't know better. Are you selling lemons? No. So, not the same thing...let it go.
2. Use a coupon later to stimulate new signups in something like may and december.
3. There was always an option to sign up later - kind of. Now the price of the option went up...a lot! Next thing is to figure out how to get my employer to pay for it which sounded like a lot of work. So I exercised the option before it went up in price almost 3x. Maybe not the same as "going out of business" sale, something slightly different.
That people who just signed up after knowing that the price will increase already knew about the (full) value might not be as precise as you think.
Speaking for me, I enjoyed the (free) readings and sometimes the comments. Like I enjoy a blogger or a really committed guy on X, but where 7$ of donation (that's what it was in my mind) for the content I'm already reading might not be a fit.
I didn't have the time yet to dig into the concept and see what paid value I am missing / I would get additionally as a subscriber.
So it might be a bet on the future and if the overall content/value (paid+free) still doesn't fit my understanding of those 7$ and others think like me, your revenue curve might get a drop in a couple of month. Though I hope that's not the case. So much for the gray area ;)
On the other hand your transparent article made me realize that this is not something that you do just for fun and to get free early feedback for your books, but that it is something you do explicitly for revenue and wouldn't continue without it. So supporting you creating and maintaining this content that wouldn't exist without subscribers is the other part of the decision (for me at last).
I would also add..a third group: those who truly appreciate your work, and have found its merits and would want to make sure you as a resource will not just continue to be … but also support as many do with other business and maybe writers, musicians and even gathering places.
I agree that the announcement was a form of a catalyst, pushing the undecided to subscribe. At the same time, I see this possibly as a tail end of the “Tidy First?” Book release. For a lot of people the end of the year is defined by some form of a wind-down and catching up on reading/self-reflection. Being a non-paying customer before reading the book, it convinced me to become a happily paying subscriber.
I still don't understand the market, but I love it! Happy that this price increase announcement earned a lot more subscribers for you 🙂. It could be that it was FOMO-driven, but it's also a good point about making employers pay for it; it's a business expense.
I’ve been a paid subscriber since I your were on Medium. I think that $7/month is a bargain for what you offer and I am happy to support your work. I don’t know what is a “break even” price for me would be. And it would certainly depend on my ability to get things reimbursed.
I believe you can help people get your newsletter reimbursed. Specifically, it would help if you write a public post talking about the changes in behavior / performance to expect from people who sign up. The target audience for your post would be management. Engineers would send a link to that post to their leadership and ask if leadership is willing to pay for it.
As somebody who makes these decisions, I would recommend to be very specific about expected outcomes: what skills will people gain and what behaviors will they learn and in what timeframe? The big upside here is that people who are learning would be accountable too. There is a huge difference between “I like to read this blog for entertainment, can company cover this?” and “In my last performance review you have mentioned that I need articulate the trade offs to others better to drive consensus on the team faster. This blog offers a lot of very specific advice on how I can improve. Can you pay for my subscription for 6 months and see if I improve?”
That sounds like a great topic for a Thread post--let folks fill in their own answers. I'll confess that for me I'm driven by the "how cool is it to better understand design!!!" factor.
It’s entertaining to read your posts; however, if I didn’t sign up before, I’m not going to do it now because of the price increase.
Pricing is weird. A strange lesson I learned running my first business putting up the price of our service increased conversion rates.
As a bonus it also attracted more good customers and put off the difficult customs who didn't value what we did.
Different opinion: you forced people to take a stance. It is no longer attractive to stay undecided. In a way it's a bluff that worked out. It also means a lot of people felt that your thinkies are worth paying for. Congrats 🙂
Agree - and not everyone can expense it, so folks are signing up before the price gets permanently out of reach.
I hadn't even thought of expensing it until Kent mentioned that -- I signed up for my own edification, not because I viewed it as beneficial to my employer (although they may get some indirect value out of it over time). I figured $70/year was a reasonable personal expense, given that I pay similar amounts for about half a dozen other (non-tech) newsletters. And I think I get enough personal value out of it to justify $70/year... but I couldn't justify $250/year for a single newsletter -- if I add up all the paid tech services I use (and cover out of my own pocket for home use), it would be less than $250/year.
absolutely this. I have thought about signing up for quite a while, but it wasn't until Friday that I could actually get around to do it. Having a "deadline" definitely helped.
I've helped companies increase margins and design pricing for ~8 years.
What you're describing is common. Here is what I've discovered via experimentation and interviews w/ shoppers and consumers:
1. When someone else is paying for it (e.g. a business expense), many consumers don't care about price – as long as long as they don't perceive it as a scam / price gouging.
2. How consumers calculate value for money (VFM) is more like a step function than a linear slope:
a) Some find will never pay for it
b) Some will equate it as a nice-to-have / luxury (like a Starbucks drink) and will place a low upper bound on prince, ~ $10
c) Some will find it extremely important to their work. Their willingness to pay is orders of magnitude more, e.g. ($150+)
So to figure pricing, you need to combine 1 & 2 from above and do your best to guess about how many you will attract of each category
For example, I plan on starting a paid newsletter and will probably charge around $475/ year. I will optimize the content for a customer whose profile is 1 + 2c (people who charge it to biz and find it essential to their work). I will also ensure the content is very personalized to the audience as well and directly addresses their problems (versus general posts). If I attract 100 customers, then I have a good newsletter biz.
For you, you may consider two tiers and types of newsletters. A newsletter for 1+2b and a newsletter for 1+2c
Food for thought...
The complement I'm working on now is a 2-day companion workshop for the book. We can charge $1000/person but necessarily address fewer people.
Sorry, just getting around to reading this one. While the lesson about motivation may have been new for you (no disrespect in that), it probably isn't an unknown thing. Unfortunately, I can't explain it, but I have seen that effect previously. In particular, I used to work for a company that sold financial investment advice by subscription newsletter, and they were frequently doing promotions along the lines of "For the next week only, subscribe to newsletter X for only $D, a savings of P%!!! Act Now!!!" (Curiously, as I type that, it sounds like it's a phishing attempt, I doubt that's a coincidence.) They had a number of differently focused newsletters, so they'd end up running these kinds of promotion several times a year to bring in a bunch of new subscribers. I also tended to feel a little icky about it (not that it was under my control or even influence), as it seemed to me that the marginal cost per subscriber was pretty much constant and they were creating an artificial sense of scarcity , but it did work for them. Anyway, no conclusions here, just offered as grist for your thinking mill.
First time reading your content. I enjoyed it. The way I see it is that value is subjective. I'm sure you came to that realization when sales boosted. Congrats! Aside from that price point would be more advantageous for you or the subscriber, the increase in sales is a great reflection of your hard work and value.
The price increase knocked me off the fence. I've been a long-time reader of Kent's work (Extreme Programming was an early, and influential, purchase not long after it dropped).
For those who jumped in because of the increase, maybe this is an example of Loss Aversion. The $18/mo increase (39%) might be seen as a loss for those who wanted to subscribe, but were just not strongly motivated ("there's no rush, I'll get around to it eventually") or the procrastinators ("There's always tomorrow").
That $18/mo just galvanized them into action. It did that for me, at least.
This is loss aversion in marketing 101 as described in https://bootcamp.uxdesign.cc/fear-of-loss-gain-of-engagement-how-loss-aversion-drives-customer-behavior-in-products-684ca83e786f
Well apparently I didn’t take that class. Yet.
And to be explicit, this strategy doesn't create additional value or meet a new customer need. Instead, it catalyzed the decision-making process for customers who were already prepared to purchase but had yet to proceed to checkout. The introduction of a sense of urgency unlocked these sales. This strategy is effective because it targets a customer base inclined to purchase the product or service.
As humans, we tend to react more strongly to the possibility of a loss than to the possibility of a gain: https://en.wikipedia.org/wiki/Loss_aversion
Hi Kent, it seems you would like to understand better why there's a sudden influx of paid subscribers. As one of the new paid subscribers, let me share my experience & thought process so it may be of use for you:
I am a software engineer by trade, with 7 years' experience and based on Indonesia.
I first happen upon your writing in ~2 years ago, it was "Test Desiderata" article. At the time i was struggling to decide about what kind of test (unit test vs integration test, isolated based vs social based, etc) that i should pursue, and "Test Desiderata" article help me to think in a more structured way on what kind of tests that are important in my own project. Since then, i regularly checkup your blog (i think it was on medium?) to see if there's any more interesting articles that you recently write as usually it's intellectually stimulating for me to read & think about your article.
I think i subscribe (free) to your substack around 1 year ago. At the time, i was trying to find motivation to consistently checkup on my work email every day. Checking up work email was boring before, but after subscribing to your substack (and some other's substack) checking up work email become motivating, because occasionally there's intellectually stimulating email/article i could read. At this time, i am aware there's paid subscription but i never pay too much attention to it, as i don't know much about what will i get if i paid.
Then come your post about increase in price of paid subscription. After reading that, i have this strong urgency to consider whether i would do paid subscribe or not. I am not sure if paying subscription is going to be a good investment for me, but i am willing to try (this is the first time i paid subscription in substack) this out to know whether it's going to help me (in particular my career), and i trust you & your quality from my 2 years experience consistently reading your articles.
let me share some of my thoughts on question/topic you have posed:
> Folks signing up recently already knew about the value
To be honest, i am not sure if i knew the value of paid subscription before actually pay & subscribe to it. I had an inkling that paid subscription will give me more access to your writing, but i am not sure if the paid writing is going to be so relevant to me that i am willing to pay more for it, especially in comparison to stuff that i normally willing to pay for (Books, online library subscription, and specific training course [GCP ML engineer course]).
> People & their motivations are mostly opaque to me.
I think one possible explanation is your subscription price increase news is treated as a discount event (like year's end discount), which make people's mind to consider strongly whether to buy or not as it's time limited event. normally, people are usually ignorant. For me personally this urgency to consider buying combined with good will created from 2 years experience of you consistently writing interesting article is decisive factor in paying for paid subscription.
I’m among those who just subscribed, and yes, it was because of the price jump. I’m not sure that I’m gaining value yet, but I might in the future, so it’s worth it to me to lock in the price. I have no expectation that I could expense this, as I have seen little evidence that my employer cares. I’ve tried to introduce ideas for years, with little management enthusiasm, so it’s just for me.
It is indeed difficult to convince management with details and technical stuff. Might be easier to just ask for training material budget and expense to something like "Premium articles on advanced software engineering techniques".
1. Sleazy car salespeople sell lemons to people who don't know better. Are you selling lemons? No. So, not the same thing...let it go.
2. Use a coupon later to stimulate new signups in something like may and december.
3. There was always an option to sign up later - kind of. Now the price of the option went up...a lot! Next thing is to figure out how to get my employer to pay for it which sounded like a lot of work. So I exercised the option before it went up in price almost 3x. Maybe not the same as "going out of business" sale, something slightly different.
That people who just signed up after knowing that the price will increase already knew about the (full) value might not be as precise as you think.
Speaking for me, I enjoyed the (free) readings and sometimes the comments. Like I enjoy a blogger or a really committed guy on X, but where 7$ of donation (that's what it was in my mind) for the content I'm already reading might not be a fit.
I didn't have the time yet to dig into the concept and see what paid value I am missing / I would get additionally as a subscriber.
So it might be a bet on the future and if the overall content/value (paid+free) still doesn't fit my understanding of those 7$ and others think like me, your revenue curve might get a drop in a couple of month. Though I hope that's not the case. So much for the gray area ;)
On the other hand your transparent article made me realize that this is not something that you do just for fun and to get free early feedback for your books, but that it is something you do explicitly for revenue and wouldn't continue without it. So supporting you creating and maintaining this content that wouldn't exist without subscribers is the other part of the decision (for me at last).
I would also add..a third group: those who truly appreciate your work, and have found its merits and would want to make sure you as a resource will not just continue to be … but also support as many do with other business and maybe writers, musicians and even gathering places.
I agree that the announcement was a form of a catalyst, pushing the undecided to subscribe. At the same time, I see this possibly as a tail end of the “Tidy First?” Book release. For a lot of people the end of the year is defined by some form of a wind-down and catching up on reading/self-reflection. Being a non-paying customer before reading the book, it convinced me to become a happily paying subscriber.
I still don't understand the market, but I love it! Happy that this price increase announcement earned a lot more subscribers for you 🙂. It could be that it was FOMO-driven, but it's also a good point about making employers pay for it; it's a business expense.
I subscribed after lurking for months with the free plan because you are eminently transparent. I value transparency and thought; why not?