Team plan pricing · Thursday review

Keep $12. Charge heavy users.

Three ways to stop the Team margin slide: raise the price, add a usage fee, or wait.

We recommend Option B, the usage add-on. We ask you to approve it on Thursday so billing can start its six-week build.

Team margin fell nine points in a year

Storage and AI usage costs drove most of the fall.

Team brings in about $442,800 a month: 4,100 paying workspaces, 9 seats each on average, at $12 a seat.

Team gross margin: 78% a year ago, 69% today, about 64.5% in six months if the fall continues 78% 69% 64.5% A year ago Today In 6 months, same trend

One in ten workspaces drives over half the usage cost

The top 10% of workspaces account for 55% of usage costs Workspaces 10% Other 90% Usage costs 55% from the top 10% 45% from the rest

A flat price rise spreads this cost across every workspace. Finance estimates a usage fee would reach about 12% of workspaces.

We judge options on margin, customers, then speed

1 · Restore margin
The fall from 78% to 69% is the reason for this review.
2 · Keep customers
The 2023 rise from $10 to $12 lost 6% of workspaces within three months.
3 · Speed
Weeks matter less than the first two, as long as the fix lands within months.

Margin comes first because it is the problem; churn second because it is the known cost of the last price change.

Three options, compared on the same terms

A · Raise to $15B · Usage add-onC · Wait 6 months
Change$12 to $15 a seat, +25%$12 plus a heavy-usage feeReview again in six months
MarginAbout 75%, costs heldNot yet sized by FinanceAbout 64.5% if the fall continues
Who paysAll 4,100 workspacesAbout 12% of workspacesNo one
Churn riskThe smaller 2023 rise lost 6%Falls on the heaviest usersNone now, but margin keeps falling
In effectAbout 30 days6 to 10 weeksAbout 7 months

A lifts revenue fast, even if 2023's churn repeats

Monthly Team revenue: $442,800 today, $520,300 at $15 if 6% of workspaces leave, $553,500 at $15 if none leave Today at $12 $442,800 $15, 6% leave $520,300 · +$77,500 $15, none leave $553,500 · +$110,700

Revenue stays above today's unless more than 20% of seats leave. The catch: a 25% rise is larger than 2023's 20%, so churn could exceed 6%.

A takes effect in a month; B needs six weeks

Weeks from approval to the new price: A about 4, B 6 to 10, C about 30 0102030 weeks A · $15 About 4 weeks: 1-week change inside 30 days' notice B · Add-on 6 wks 6 weeks if notice goes out during the build; about 10 if it waits for billing to be ready C · Wait 26 weeks to the review +notice

Assumes approval on Thursday. Any change needs 30 days' notice to customers under our terms.

B charges the workspaces that create the cost

The margin went to usage, so B puts the price on usage.

Who pays
About 12% of workspaces, by Finance's estimate. The other 88% see no change.
The fee
$5 for each extra 100 AI actions above 500 per seat a month, and a fee above 50 GB of storage.
Why not A
A charges every workspace 25% more for costs mostly made by one workspace in ten.

What B costs us, and the best case for A

We give up certainty
We know who B charges, not how much margin it recovers. A’s 75% is known today.
We give up time
B takes six weeks or more against A’s four, so margin stays low for longer.
Best case for A
Revenue still rises unless over 20% of seats leave.
What happens to A
It stays available as a one-week change.

How B could go wrong, and how we would know

Heavy users leave
The fee lands on the heaviest users. Sales talks to them before notice goes out.
The build slips
Margin stays low for longer, so notice waits for a firm billing date.
How easy to undo
Easy. The fee can be switched off, though the build is spent either way.
What changes our mind
If Finance finds B recovers less than A would after 6% churn, about $77,500 a month, choose A.

Approve Option B on Thursday to start the build

This approves
Keeping Team at $12, the usage add-on, and six weeks of billing work.
It does not commit
A notice date. That follows once billing sets a launch date.
We need you to decide
Should we offer annual price locks to the two large customers who asked? Locking $12 could keep them steady during the change.

Appendix: how the numbers were worked out

FigureWorkingResult
Revenue today4,100 workspaces × 9 seats × $12$442,800 a month
A, none leave36,900 seats × $15$553,500 a month
A, 6% leave3,854 workspaces × 9 × $15$520,290 a month
A, break-even$12 ÷ $15 = 80% of seats must stayUp to 20% can leave
A, marginCost of $3.72 a seat (31% of $12) heldAbout 75%
C, margin in 6 monthsHalf of the 9-point yearly fallAbout 64.5%
B, workspaces charged12% × 4,100, Finance estimateAbout 490

Assumes leavers are average-sized and cost per seat holds.