Introducing UserHub, A User Monetization Platform

Silas and I are excited to introduce UserHub, a User Monetization Platform that helps Subscription SaaS companies turn Users into Seats.
June 8, 2023
Patrick Rafferty
Co-founder of UserHub

Silas and I are excited to introduce UserHub, a User Monetization Platform that helps Subscription SaaS companies turn Users into Seats.

Where Did UserHub Come From?

Silas and I met at Reonomy, a commercial real estate tech startup. It was Silas’ 6th startup, and he was always the engineer who set up pricing and billing. When it came time to monetize at Reonomy, Silas showed me the GitHub in-product Billing & Licensing Admin for inspiration. Then, he explained that GitHub had an entire team to focus on these features. We, on the other hand, would be hacking something out in a sprint.  I started us out on a property credit model. While I thought it was clever, our customers were mostly confused. Three years later, we transitioned to subscription tiers where each plan charged based on a combination of Seats and Properties.

Our experience convinced us that hybrid subscription tiers are the future and that the seat will remain a critical pricing dimension.

Pay-as-you-go fans push the consumption model as the future and cast the seat model as dated (see "Is per-seat pricing dying?”).

We spoke with hundreds of SaaS operators who are tired of the debate. Plus, companies continue to vote with their feet. Peer Signal and XaaS studied the pricing models of the top 150 PLG companies. They found 80% of companies used a subscription model with usage-based tiers, and over 50% incorporated seat-based pricing (e.g., GitHub, Figma, Intercom). When you remove infrastructure and API-heavy products from the data set, seat-based packaging remains ubiquitous.

For SaaS products where usage is user-driven, not machine-driven, the subscription seat remains a critical pricing metric.

The consumption pundits have pushed a narrative that subscription-based monetization is a “solved” problem with stable implementation requirements. Instead, we believe there has been a step-function improvement in how leading Subscription SaaS companies monetize end-user demand, albeit with a giant leap in implementation complexity.

The Next Generation of Seat Monetization

Technology companies like Amazon and Shopify re-imagined consumer commerce by eliminating friction from the buyer experience: Express Reordering, 1-Click Checkout, Just-Walk-Out Technology, and Contactless Payments.

A similar transformation is taking place in Subscription SaaS commerce - it’s just only here for the fastest-growing companies.

Subscription SaaS leaders like Figma, Slack, and Miro deliver a superior buyer journey by building sophisticated flows oriented around the user: Member-level Trials, Express Licensing, Flexible Licensing Programs, Dormant Seat De-Provisioning, and more.

(Miro Member-Level Trials ensures would-be users have low-friction on-ramp)

Licensing automation allows these companies to capture the long tail, accelerate in-account expansion, and drive Net Revenue Retention.

The challenge is that existing billing tools do not treat the User Record as a first-class entity or provide in-depth integrations with user management systems.  Aspiring Subscription SaaS companies who hope to build these features must spend a small fortune to keep pace.  This was the case for us at Reonomy and many companies we have spoken with.

Enter UserHub

We set out to provide a platform that allows Subscription SaaS startups to deliver a monetization journey on par with Subscription SaaS leaders. Our API & Hosted Customer Portal makes it easy to add these advanced monetization features to a SaaS product:

Of equal importance is the back-office tooling to empower Client Success, Sales, and Technology Teams. We provide tools to make it easy to facilitate upsell while giving technology & growth teams the ability to configure fine-grained monetization logic:

We are building a monetization platform from the ground up around the user. Our platform is a drop-in solution compatible with the first-generation app building blocks, such as billing systems like Stripe and auth systems like Auth0.

Why UserHub is worth building

Silas and I love startups. Building software that people want is hard, and building an enduring business is even harder. We started UserHub to help Subscription SaaS startups accelerate their growth.

We’re looking forward to keeping you up to date with our journey.

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In this article, we walk through five key questions to help you design a Team Management Portal that unlocks product-led growth:

  • Is every Team Membership role considered billable?
  • How should your Team Management portal behave at each pricing tier?
  • How can users become team members?
  • What is the optimal moment to monetize an end-user?
  • How forgiving are your proration flows to billing admins?
The Case For Free Roles
Examples: Coda, Figma
  • An organization has lower willingness to pay for secondary users; however, these secondary users enhance the product's value for primary users.
  • Since there is a free role for inviting users, SaaS companies tend to feel more comfortable granting user invitation privileges to all users by default, rather than limiting them to only admins.
  • For instance, Figma does not charge an organization for non-editors. This approach enhanced the product's value for designers by providing a platform for collaborative design processes. Subsequently, they monetized these non-designers by cross-selling their whiteboard product, Figjam.
The Case Against Free Roles
Examples: Zoom, GitHub
  • There are no obvious secondary users, so offering a free role may lead to cannibalization of paying users
  • In the case of GitHub, introducing a free role could potentially have more drawbacks than advantages. Unlike Figma, users who cannot read code may not enhance the platform's collaborative utility. Furthermore, attempting to create a free role for non-engineers introduces the risk of cannibalization. GitHub could lose the ability to monetize engineers who do not write code but still provide valuable contributions through code reviews.

[Users with the role of] Viewer can upgrade themselves to a paid Editor role by performing an upgrade action. Admins don't need to approve these upgrades…. This allows people to get the access they need without requiring approval. Figma only includes them in the organization’s billing when they signal their intent and take an explicit edit action. As this is a provisional role, it's not possible to set someone's role back to viewer after they are upgraded. [Instead, they can only be placed back to a Viewer-Restricted Role].

PLG [product-led growth] works when end users experience value and bring their organization on board. That’s not possible in industries where the enterprise buyer holds all the power…. End-users need to have permission from the organization to solve the problem. This includes access to suitable systems/passwords & decision-making ability.

Patrick Rafferty
Co-founder of UserHub

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