Thursday · CFO + Head of Product

Favor the usage add-on

Keep Team at $12 per seat; charge for heavier usage.

Approve B’s direction and a six-week billing build, subject to the economics. Approve final pricing and customer notice separately.

TEAM PLAN   /   PRICING REVIEW   /   A: $15 per seat · B: usage add-on · C: wait six months

Concentrated costs call for a targeted response

Team gross margin fell from 78% to 69%; top 10% of workspaces drive 55% of usage costsGross margin78% · 12 months ago69% · nowUsage costs55% · top 10%45% · other 90%

Storage and AI usage drove most of the decline. Team serves 4,100 paying workspaces averaging nine seats.

Rank margin recovery first, customer exposure second, speed third: costs are uneven.

Each option wins on a different criterion

Criterion, in orderA · $15 per seatB · usage add-onC · wait six months
Margin recoveryBroad revenue liftTargets heavy usageNo pricing relief
Customer exposureAll workspaces~12% affected¹No price change
Build timeOne weekSix weeksNo billing change
Best argumentFast, simple recoveryPreserves $12 baseAvoids disruption

¹ Finance estimate. Margin outcomes depend on retention and usage; none is a forecast.

A offers a fast, broad revenue lift

Monthly base revenue scenarios for Option A: current $442,800; no attrition $553,500; six percent attrition $520,290Monthly base revenueToday · $442.8kAt $15, no attrition · $553.5k (+25%)At $15, 6% attrition · $520.3k (+17.5%)

Illustrations use 4,100 workspaces × nine seats; attrition assumes equal average seats. The 2023 increase from $10 to $12 lost 6% of workspaces within three months. That history is a risk signal, not a prediction.

B links added charges to heavier usage

Recommended direction

Keep the $12 base price.

Finance estimates ~492 workspaces affected (12%).

Usage add-on triggers: above 50 GB storage or 500 AI actions per seat per month; five dollars per extra 100 actionsStorage triggerAbove 50 GBORAI triggerAbove 500 actions / seat / month$5 per extra 100 actions

Revenue and margin lift are unquantified. Direction approval excludes final storage charging terms.

C preserves stability while margin pressure continues

At constant revenue, monthly gross profit is 305532 dollars at 69 percent margin versus 345384 dollars at 78 percent marginMonthly gross profit at today’s $442.8k base revenue69% margin · $305.5k78% margin reference · $345.4k

Six months at this gap: about $239.1k.

Constant revenue and margins assumed; this is a reference gap, not savings any option guarantees. C avoids pricing disruption and allows more usage evidence, but offers no pricing response for six months.

Customer notice adds time beyond the billing build

Sequential rollout from approval: A takes 37 days including seven days build and 30 days notice. B takes 72 days including 42 days build and 30 days notice.ApprovalCharge*A · flat price7d30d notice37 daysB · add-on42d build30d noticeB: 72 days total

*Assumes notice follows build readiness and approval starts work. If valid notice runs concurrently, theoretical minimums are A: 30 days; B: 42 days. C revisits in six months.

Price certainty matters to two major Team customers

Two of five largest Team customers asked sales about annual price locks2 asked about locks3 other largest customers
Interpretation
These requests signal price-certainty concerns, not proven churn.
Mitigation
Show usage and estimated charges before notice to reduce surprise.
Decision
Will annual locks cover the base price, usage charges, or both? Sales needs a consistent promise.

B trades speed and simplicity for cost alignment

Strongest objection
A is faster and simpler; B’s margin benefit is unquantified.
Evidence gate
Compare modeled gross margin and affected-customer bills before final pricing approval.
Reversal
B’s build cost is sunk; removing charges later requires communication.
Fallback
Favor A if B’s economics disappoint; favor C if disruption dominates.

CFO and Product: approve B’s direction on Thursday

Authorize
Will you approve B’s direction and the six-week billing build to target usage costs?
Limit
This does not approve final rates, customer notice, annual locks, or a budget amount.
Accountability
Who will own the economic model and rollout so final approval has one accountable lead?

Finance estimates 12% affected; all other inputs are internal Team pricing and usage figures. Calculations are illustrative.