This interview between Dan Keldsen and Luke Hohmann discusses the importance of pricing and profit streams in software businesses, based on Luke's latest book "Software Profit Streams" a spiritual successor to the long legacy of "canvas" style books first started by Business Model Generation.

Key Points

• 🕰️ Time-based cadence is one of the triggers to change pricing.
• 🏢 Internal triggers like adding new features can also necessitate pricing changes.
• 🌍 External triggers such as regulatory changes, competitive forces, or hardware changes can impact pricing decisions.
• 💰 Customer benefit analysis is the foundation for effective pricing strategies.
• 🎯 Ilities (Reliability, Maintainability, Curability, Scalability) can be recast into current or future economic terms to inform pricing and licensing decisions.
• 🤝 Intangible benefits of working with a company, such as being more flexible and willing to listen, should be considered in customer benefit analysis.
• 📈 Pricing decisions should be revisited at least once a year, but more frequently in fast-growing products.
• 📚 The book "Software Profit Streams" provides guidance on pricing and packaging decisions in a remarkably easy to understand, beautiful on the eyes, but quickly allows you to go VERY deep into software pricing.
• 🧑‍🤝‍🧑 Collaborative decision-making is essential for pricing strategies.
• 🧠 Simulations can be useful in building mental models, but relying too much on them can be risky due to unknown external triggers.