Finally, some price increases

2019-02-02 2 min read

    For as long as I can remember it felt that there was this hidden rule that companies cannot raise prices or risk mass customer abandonment. Yet the past few few months we’ve seen two major companies increase prices - Atlassian and Netflix - without any adverse effects. The products are improving and are offering more functionality so it’s only fair that the prices increase. This is a welcome sign and I hope it leads to companies starting to invest significantly more in improving their existing products with the expectation that they’ll be able to raise prices in line with the additional value they’re bringing. Imagine what sort of investments companies would be making if they knew they’d be able to raise the price of their products.

    Modern digital products have moved beyond release versions and are constantly being released and deployed. This makes increasing prices difficult. In the past you’d be able to say that the new version comes with XYZ new features but you need to pay. These days feature improvements are released as soon as they’re developed and we get so used to the continuous improvements that we no longer have the concept of the “old version.” This makes pricing difficult since it feels as if we’re paying more without getting anything in return. Yet when we’re confronted with the price increase and have to decide whether this new price is worth what we’re getting we inevitably say yes. That’s the bet Atlassian and Netflix are taking and I’m optimistic this leads to a slew of new products.