Team plan pricing review · 29 October 2026
Keep $12 and add a usage add-on
Recommended over a $15 seat price or waiting six months
Approve option B on Thursday so billing can start its 6-week build. Heavy users would pay for usage above the limits from about 10 December; the $12 seat price stays.
Team margin fell 9 points, driven by a few heavy workspaces
Storage and AI usage costs took gross margin from 78% to 69% in 12 months.
At today’s revenue of $443k a month, 9 points is about $40k of gross profit a month.
Judge each option on margin first, then retention, then speed
- 1. Restore margin
- Margin is the problem we are here to fix, so an option that leaves it at 69% fails.
- 2. Keep workspaces
- Lost workspaces undo the fix: the 2023 rise lost 6% of workspaces within 3 months.
- 3. Time to take effect
- Speed matters, but weeks of difference count for less than a slide that took 12 months.
Three options, compared on the same criteria
| A · $15 per seat | B · $12 + usage add-on | C · Wait 6 months | |
|---|---|---|---|
| Who pays more | All 4,100 workspaces, +25% | About 12% of workspaces (~490) | No one |
| Margin | About 75% if cost per workspace holds | Charges where cost sits; lift unknown | Stays at 69%, or falls further |
| Revenue | +$77k to +$111k a month | Set by how far heavy users go over | No change |
| Churn risk | Broad; 2023’s smaller rise lost 6% | Limited to heavy users | None from price |
| Takes effect | About 30 days | About 6 weeks | Review in late April 2027 |
| Undo | A rise is hard to walk back | Limits and rates can change later | Nothing to undo |
Option A grows revenue even if 2023’s churn repeats
A 25% rise lifts revenue 17.5% if we lose 6% of workspaces, as in 2023.
Revenue only falls below today if more than 20% of workspaces leave. This rise is larger than 2023’s 20%, so churn could be higher.
Option B leaves 88% of workspaces at today’s price
AI actions above the limit cost $5 per 100. For example, a 9-seat workspace with every seat 100 actions over pays $45 on top of its $108.
A takes effect in 30 days, B in 6 weeks, C in months
Assumes notice for B goes out by 10 November, while billing builds. If it waits for billing, B starts about 10 weeks after approval.
Choosing B gives up speed and a predictable number
- What we give up
- About two extra weeks before anything bills, and a revenue figure we can forecast less well than A’s.
- Best case against
- A is live in 30 days, lifts margin to about 75% and grows revenue even at 2023’s churn.
- How easy to undo
- We can change the limits and rates later; A remains a 1-week build if B falls short.
B’s main risk: our largest customers may be heavy users
- Large accounts
- Two of our 5 largest Team customers have asked about annual price locks. Sales should talk to them before notice goes out.
- Small lift
- If the 12% use only a little above the limits, the add-on will not move margin much.
- What would flip it
- Usage data showing a small overage, or large accounts in the 12% ready to leave, would point to A.
Approve option B on Thursday so billing can start
- This approves
- The usage add-on and 6 weeks of billing work, with charges from about 10 December.
- This does not commit
- Any change to the $12 seat price, or any price lock.
- Storage rate
- What should storage above 50 GB cost? The add-on needs a rate before notice goes out.
- Price locks
- Should we offer the two large customers who asked an annual lock? It shapes how they take the change.
Appendix: how the numbers were worked out
| Figure | Working |
|---|---|
| Revenue today | 4,100 × 9 seats × $12 = $442,800 a month ($5.3M a year) |
| A, no churn | 36,900 seats × $15 = $553,500 a month (+25%) |
| A, 6% churn | 3,854 workspaces × 9 × $15 = $520,290 a month (+17.5%) |
| A break-even churn | $12 ÷ $15 = 80% of workspaces must stay, so up to 20% (820) can leave |
| A margin | Today’s costs are 31% of $442,800 ≈ $137k; 1 − $137k ÷ $554k ≈ 75%, same at 6% churn if cost per workspace holds |
| One margin point | 1% of $442,800 ≈ $4.4k a month; 9 points ≈ $40k |