DHO Pricing Model
Purpose
Hypha product development teams have been heads down refining and improving our products. Each team has created outstanding roadmaps, reliable testing procedures, and efficient source control and deployment processes. This document is looking at how we can define revenue streams (i.e. relying less on investors and investment income) by coming up with a pricing model that is aligned with the regenerative renaissance (i.e. not driven by excessive profit motives), while at the same time paying for our infrastructure costs and rewarding all participants fairly.
Assumptions
- We need to generate sustainable revenue streams that can cover expenses
- We don’t need to decide the prices now, just put a framework in place
- Circular economies require revenue
- The customer wants to pay for features s/he needs
- The RR (regen renaissance) wants to support it
- The VP (value proposition) is clearly defined
- Exact pricing should be part of governance (need to define who/how)
Models
1 Free (genesis)
2 Freemium (default)
3 Premium (service)
Types
- Freemium approach (not until we can reduce our costs per new DHO via automation; orgs need skin in the game);
- SBP - subscription-based pricing (also on top of a Freemium model, typical SaaS model);
- UBP - usage-based pricing (also on top of a Freemium model, typical on-demand model);
- VBP - value-based pricing (let the customer decide, see deck below from CAWW);
- PPS - paid premium services that are only sold to premium users (mostly providers);
- PBU - price by users; (no go, see article by David Sacks below)
Notes on models
Freemium Grants
Instead of "free usage until you cross a threshold" or "hidden admin features" we can just issue grants (coupon) for N number of no-fee transactions.
Variations on UBP usage-based pricing (via Max)
3.1 pay per proposal;
3.2 pay per claim;
3.3 pay per feature;
3.4 pay per redemption (free for EOS);
3.5 pay-as-you-go, although may require a deposit, as well as pricing at broader levels
5.1 Connection to DeFi exchange
5.2 Accounting module
5.3 Incorporation (e.g. as Wyoming DAO)
Also to consider are options around longer commitment, annual vs monthly.
Teams vs Individual Licenses
Team plans are where the opportunity is, and therefore where founders should focus their energy and resources. Individual plans can be useful to generate leads, but their long-term revenue potential is significantly smaller. Account-level churn rates for Individual plans are commonly around 5% per month, but only 1-2% per month for Team plans. Team plans build on a solid long-term foundation whereas Individual plans are the definition of a Leaky Bucket.
Article: https://sacks.substack.com/p/individuals-or-teams-whos-the-better (via Augusto)
Process
1 select new DHO (e.g. via impact metrics)
2 set pricing model (and other params)
3 propose and launch DHO from parent DHO (hand over protocol)
Tokenomics
1 What tokens to use
2 Staking vs burning
3 Cost of services (infrastructure/capital, labor/roles)
4 Financial/knowledge/value/credit flows
5 Treasury/Store of value
Our Model (TBD)
- How much "basic usage" can we afford and where is the threshold to UBP?
- Are accelerators using VBP or other pricing model (T&E, Flat Rate)?
- Is there revenue sharing between Hypha and Partners? (blue/orange and green boxes)
- Is there a pricing policy needed and an agreement with Hypha?
- Should we also have a commission program for sales reps?
References
Discussion from Reiki on token-based staking and fee accounts
https://discord.com/channels/722537361480613950/738713478533087354/858514452097794088
https://stories.platformdesigntoolkit.com/pricing-platforms-marketplaces-151ab67b130a (Simone Cicero who created the Platform Design Toolkit)
https://docs.google.com/presentation/d/1NE2gxibDXvgfediqRHRKs7IJjh18P4mO_qpEIr84L4A/edit (Value-based Pricing model we developed at CAWW)
https://speckyboy.com/freelance-design-value-based-pricing/ (more on VBP)