Team plan pricing · Thursday 29 October

Keep Team at $12 and charge for heavy usage

Approve Option B on Thursday: a usage add-on above 50 GB storage or 500 AI actions per seat a month. It commits six weeks of billing work, not a price rise for all 4,100 workspaces.

69% margin

Team gross margin today, down from 78% a year ago.

Team margin fell 9 points in a year

Storage and AI usage costs drove most of the drop.

At $443k a month in Team revenue, each point is about $4,400 a month. The 9 points are about $478k of gross profit a year.

Team gross margin: 78% twelve months ago, 69% today12 months ago: 78%Today: 69%−9 points
The top 10% of workspaces account for 55% of usage costsShare of Team workspaces10%the other 90%Share of usage costs55% from the top 10%45%

A tenth of workspaces drives 55% of usage cost

A flat price rise makes light users pay for heavy ones.

We judge on margin first, then retention, then speed

Margin is the problem we are here to solve. Retention decides whether a fix pays off.

  1. 1

    Margin

    9 points lost in 12 months.

  2. 2

    Retention

    A fix fails if it loses more than it earns.

  3. 3

    Speed

    Weeks matter less than a 12-month trend.

A · $15 per seatB · usage add-onC · wait 6 months
Who pays moreAll 4,100 workspaces, +25%About 12%, roughly 490No one
MarginAbout 75% if costs holdRises with heavy use69%, likely falling
Retention risk2023's smaller rise lost 6%Limited to the 12%None now
Takes effectAbout 30 daysAbout 6 weeksRevisit in 6 months

A is fastest, B is targeted, C costs nothing now

$15 lifts revenue even if 2023's churn repeats

A 25% rise is steeper than 2023's 20%, so losses could be larger. Revenue only falls below today if 1 in 5 workspaces leaves. Margin returns to about 75%.

Option A: monthly Team revenue under different churn outcomesMonthly Team revenueToday at $12$443k$15, no one leaves$554k$15, 6% leave as in 2023$520k$15, 20% leave$443k, break-even
Option B reaches about 12% of the 4,100 Team workspaces4,100 Team workspaces12%88%: about 3,610 stay at $12, no changeAbout 490 pay the add-on
Triggers
Over 50 GB storage, or over 500 AI actions per seat a month.
Price
$5 per extra 100 AI actions.

B charges only the 12% whose usage outgrows Team

How much it earns depends on how far those workspaces go over.

Waiting six months likely costs more margin

If last year's pace holds, margin is about 64–65% by the revisit. The current gap to 78% is already about $40k of gross profit a month.

Team gross margin: 78% a year ago, 69% today, about 64 to 65% in six months if the trend holds60%80%78%69%≈64–65%A year agoTodayRevisit
Weeks from approval on 29 October until each option takes effectA · $1530-day noticelive about 28 NovB · add-on6-week billing buildlive about 10 Decnotice runs alongside0246810 weeks

A could be live in a month, B in six weeks

A's one-week billing change fits inside its notice. If B's notice waited for billing, B would go live about four weeks later. C revisits in week 26.

B gives up speed and certainty for fairness

What we give up
About two weeks against A, and revenue we can forecast.
Best case against
A is simpler and gets margin to about 75%, even if 2023's churn repeats.
How easy to undo it
Easily: we can raise thresholds or drop the add-on. A price rise is hard to walk back.
What would change our mind
Finance showing the add-on recovers far less margin than a $15 price.

The biggest risk sits with our largest customers

Two of our five largest Team customers have already asked sales about annual price locks.

Large accounts
B holds their seat price at $12, but heavy use can still raise a bill.
Reach estimate
If more than 12% cross the limits, more customers see higher bills.
Billing build
A slip in the six-week build moves the launch. Sending notice late in the build limits that.

Approve the usage add-on on Thursday

This approves
Keeping Team at $12, six weeks of billing work, and 30 days' notice to customers before the add-on starts.
It does not commit
A list-price change. We can still choose $15 later if the add-on falls short.
We need you to decide
Should we offer annual price locks to the two large customers who asked? Sales needs an answer before the notice goes out.