> Also, it is dramatically harder to raise prices than to lower them, so starting low and then increasing is a very painful thing to do.
It depends on your perspective. When you're small and growing it's actually the opposite.
If you grandfather your existing customers (ideally, indefinitely), then it's quite easy to raise prices. Assuming there is still demand at a higher price range, which in many cases there will be, since your product gains traction and improves over time (so you can also justify charging more).
As your customer base grows, it's also harder to lower prices. Would you cut the cost of all your existing customer base? That immediately cuts into your recurring revenue, and you don't know if it's going to bring more customers to balance out over time.
It depends on your perspective. When you're small and growing it's actually the opposite.
If you grandfather your existing customers (ideally, indefinitely), then it's quite easy to raise prices. Assuming there is still demand at a higher price range, which in many cases there will be, since your product gains traction and improves over time (so you can also justify charging more).
As your customer base grows, it's also harder to lower prices. Would you cut the cost of all your existing customer base? That immediately cuts into your recurring revenue, and you don't know if it's going to bring more customers to balance out over time.