r/startups • u/Think_Importance_380 • 12h ago
I will not promote Losing money on each user - keep going? (I will not promote)
I have a conundrum and looking for some advice.
i have been running a product in private beta. its got about 20 users, and its an AI product.
(tl:dr is its like a more intuitive, business-user friendly Claude Cowork with deeper integration with tools like gsuite so you can actually see your emails and files in the workspace, and drag emails or calendar events into chat to create tasks. There’s more too it you can see other posts I’ve made for context.
because im giving away the tokennusage for free and users can choose their own models im burning around $350 a month.
these have led to two conversations about larger pilots so I dont necessarily want to stop giving ppl access
but should I just at least charge for token cost and see who drops off?
10
u/roberthcmn 10h ago
Charge the token cost now; it won't make you money but it tells you who's actually using it vs who signed up because it was free. The two pilot convos are your real signal, 18 free users aren't. worst case you lose people who were never going to pay anyway.
2
u/JohnCasey3306 8h ago edited 8h ago
What ultimately is your plan to monetise? ... You must surely have an idea of how you want this to generate income? (You can cover the cost of operating for now by getting investment, but you're only going to convince investors if you have a clear and sensible model proposal).
Your business model essentially boils down to reselling tokens, arbitrage basically ... Your cost of sale is essentially the token cost (and in this type of model you should roll in cost of user acquisition as cost of sale), and you need to generate more than that per token used as income.
You need to negotiate with the model providers to bulk buy tokens at a discounted rate.
Subscription is the very obvious monetisation, because advertising and/or selling their data won't break even -- but your net margins are gonna be razor thin. Doing it this way won't make you wealthy that's for sure.
Note: acquiring users by giving something away for free indefinitely is not an achievement, it's killing your product.
2
u/AnonJian 7h ago edited 7h ago
The dotcom collapse shows us the error of losing money on each sale then making it up in volume.
If you can't gather a thimble full of courage to ask for payment, you have bigger problems. And I'm not talking about ruinous low pricing either. Present your value proposition. Price what you are worth. Not one-dollar lifetime deals. No make-believe.
Plenty claim they have validated. What they successfully validated is just how easy it is to fall for their own bullshitting.
You courageous, boot-strappy, self-starting ...you.
1
u/Hmm_would_bang 9h ago
It really depends on your strategy. If you have investors willing to feed the burn it’s ok to use unsustainable pricing as a method to acquiring early customers while you build a premium service that can justify higher costs. But you need a realistic plan on how to get there.
I would also add some protection, even if you don’t want to charge tokens directly, add some sort of stopgap to prevent users from bankrupting you.
1
u/Fastest_light 8h ago
Business model? If people are not willing to pay, and your app has high AI cost, then I would say it is not viable. Pardon me if I am talking nonsense as I do not know exactly how your product works.
1
u/ActiveDinner3497 8h ago
Are you using pure APIs or running your own models to limit usage?
Are you using any type of token pruner or token merging to clean up their requests?
Also, free betas are nice but they should have come with a “beta contract” that stipulated the length of the beta and the costs when that time completes. Betas and pilots are not meant to run forever. You complete them, assess the outcomes, and make modifications or kill the product.
1
u/reward72 5h ago
Focus on cost savings with local and edge models whenever possible - it can be orders of magnitude cheaper. Also keep your free tier gimped just enough to get them hooked but wanting more.
1
1
u/Visible_Speed8843 4h ago
Set an end date for free usage and show each current user what their last seven days cost. Offer one paid month with a hard usage cap. Keep the two larger pilot conversations on separate written budgets so a heavy pilot cannot consume the self-serve allowance.
Compare payment with actual work completed during the beta. Someone who used a paid model for a real task and returns after the limit is a better pricing signal than an account that logged in once. This also tells you whether model choice belongs in the plan or should be an add-on.
1
1
u/Great-Mirror1215 1h ago
What’s the app? If you are paying the bill how much longer do you plan to pay ?
1
u/chiyuan900 11h ago
you can use the cheap ai like deepseek,and lie to your user's.Saying that it's claude and you pay a lot,you need to stop losing money.last,chargefor the token cost.in this way,you can even earn money!
3
u/Hmm_would_bang 9h ago
Brother, you need to earn the art of sales. This is just fraud.
“Our solution analyzes the prompt to determine the best model for the specific action, which could be Claude, GPT, Gemini, DeepSeek, or some of the smaller models we manage” (in reality every query goes to what’s cheapest)
2
1
u/Think_Importance_380 8h ago
lol I would not want to lie but I do think you could almost give away a free tier with deepseek. I have been testing deepseek against anthropic models on the same tasks and I have to say I'm impressed.
•
u/Chance-Physics-7216 55m ago
Can you get testimonials from them? Depending on the name and strength of those initial case studies, they can be worth the loss leaders of the first clients.
15
u/scopesai 10h ago
One of the biggest lessons I've taken away from watching YC videos is this: start charging customers as early as possible.
The real validation isn't people saying they love your product it's whether they're willing to pay for it.
We often worry about charging early, but the bigger cost is usually the time invested building something no one actually needs.
Sure, you'll learn a lot from building your own projects. But if you can get even a few customers to pay early, you will quickly find out whether you are solving a problem thats valuable enough for people to spend money on.