- Why We Changed Our Pricing
January 1, 2012 7 comments
I was leading a PD recently for a local school district about how to teach more effectively using real-world topics. Before the session a teacher came up to me and asked, “Do you work at Mathalicious?”
“I do,” I said.
“I love your lessons. I used to use them all the time, but had to stop once you started charging.”
——
In late 2011 we released a survey of our users around the country. 95% of teachers responded that their students enjoy Mathalicious lessons, while 97% said the lessons help their students become better problem solvers. 71% of teachers said they enjoy their jobs more when they use the lessons, and over half — including teachers who have spent more than ten years in the classroom — said that Mathalicious has helped change their approach to teaching.
I was very happy to see this.
Before starting Mathalicious, I spent years as an eighth grade math teacher and later a middle school math coach, and had come to realize that many of the challenges we face in the classroom — from fed-up students to worn-out teachers — stem directly from ineffective content. Content that presents math as a random set of skills to memorize, regurgitate and forget. Content that bores students, and sets teachers up to fail.
I believed, perhaps audaciously, that I could help change this, so I started writing lessons that taught math through real-world topics: using fractions & percents to determine whether Wheel of Fortune was rigged; linear functions to explore how Apple was charging for the iPhone. Teachers who used the lessons found that not only could they cover more material in less time, but that their students were actually enjoying class more. In the spring of 2009 I created a blog to share the resources (and named it after the rap group Blackalicious), and that summer resigned my position to focus on Mathalicious full-time.
Since then I’ve spent almost every day working from a small home office in northern Virginia. The lessons have evolved; they’ve become cleaner, leaner, better. I used to do a lot of photography, but math lessons had become my art, so I sold my camera equipment on eBay to pay for a new website. If you had told me ten years ago that this is what I’d be doing, I would have looked at you funny (or worse). If you had told me two years ago that it would take this long, I probably wouldn’t have started at all. But I’m glad I did. I believe math lessons, properly written, can change the world.
You can imagine my satisfaction, then, when I saw the survey results last month: 97 percent; 71 percent. Smarter students. Happier teachers. Classes debating whether Kobe is better than LeBron (percents), or predicting whether video games will ever be so realistic that we’ll one day be able to live inside of them (exponential growth). Students calculating BMI (order of operations) and the ideal target heart rate for burning fat (algebraic expressions).
But there was one thing that I was much less happy about, something that in fact really bummed me out: the number of teachers who said that, for them, Mathalicious was simply too expensive. The number of people who got into teaching to make the planet better, thought that Mathalicious could help, but decided they couldn’t afford the $20/month or $150/year.
Mathalicious has bills to pay — people to hire, features to add — and giving it away doesn’t make sense. At the same time, if a teacher thinks our lessons can help them teach more effectively, then money should not get in the way of that.
So what to do? How much to charge?
Figuring out the “right” price has always been a challenge. On one hand, you want it to be accessible to individual teachers who might have to pay out-of-pocket. On the other, it can’t be so inexpensive that schools and districts are asked to pay only a fraction of what they’d be willing to otherwise.
One way companies resolve this dilemma is to give their product away for free and make money through advertising. Since Mathalicious lessons are taught in a school environment, though, this seems inappropriate. (The purpose of the lesson is to explore the math of video games, not to sell them.)
Another approach is to tier the product or service: to offer a free version, and then charge for premium features. However, this “freemium” model doesn’t work for Mathalicious since everything we offer — a student handout, lesson guide & multimedia presentation — is required to teach the lesson effectively, and I’m not willing to pull the rug out from beneath a teacher simply to “up-sell” them on a premium plan.
So again, what to do? How much to charge?
As unsatisfying as this may be to the math teacher in me, perhaps there’s no right answer. Perhaps the quest for the “right” price is bound to fail because there is no right price. $20/month is fine for someone who values Mathalicious at $21/month; great for someone who values it at $30/month; but a real bummer for someone who values it at $19/month. This highlights the fundamental lack of creativity inherent in an economic system predicated on, It costs what it costs and that’s what it costs.
How inefficient. Indeed, how dumb.
And how pointless, too. Because the purpose of Mathalicious isn’t to maximize users in order to maximize ad revenue, but to maximize users in order to…maximize users. And so instead of picking a single, inflexible price — instead of erecting a barrier beyond which you either pass or don’t — we’d like to try something different: pay what you can.
Starting today, in addition to the existing $20/month, we’ve added three more options: $15, $10 and $5. Every plan is exactly the same. The only difference is how much teachers choose to pay. If they can afford $20, we expect them to pay that. If not, though, the alternative is no longer simply to go home. If I’ve learned anything from living so close to D.C., it’s that ultimatums are lame.
Of course, this is risky. I realize that. I used Napster and Kazaa, too, and am keenly aware of what the internet has done to our notions of value: how it’s bred a sense of entitlement that everything should be free, so long as you’re not the one who actually created it. I realize that, given the choice, many people will opt for the cheapest plan. After all, why pay $20 when you can pay $5? I’m also aware that even though teachers are underpaid — there’s no question about it — many of us still drop $20 at Starbucks every week.
Finally, I’m aware of how we often confuse how much a product costs with how much it’s worth. Perhaps more than anything, I worry that people will mistake inexpensive for cheap, and interpret pay-what-you-can to mean that Mathalicious must be no different than any other bargain-basement educational resource out there.
Yes, I’m aware of the risks. Mathalicious is a small company. It’s funded entirely out-of-pocket, and 100% of our money comes from subscriptions…and eBay.
And yet the alternative — that teachers not use the lessons because they can’t, or feel that they can’t, afford them — is even riskier. I truly believe that the content on this website can revolutionize what it means to teach and learn math, but the revolution only gets to happen if everyone gets to play. And so I changed the pricing.
A lot of people think this is crazy, and maybe they’re right. Maybe this experiment will fail. Maybe one size fits all really is the best we can do.
I don’t know, but I’d like to find out. And so we’re going to take the rest of this school year to see what happens.
That’s my thinking. That’s my motivation for changing the pricing, and experimenting with pay-what-you-can. And it may seem virtuous, but I promise you it’s not. You see, I don’t want to just help change how math is taught. I want to help change how business is run. It’s the world I want to live in, and there’s nothing more selfish than that.
But if you’re reading this, maybe you’re selfish, too.
7 Responses to “Why We Changed Our Pricing”
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Karim, as a fellow entrepreneur who it also trying to change the world one math student at a time, I applaud what you’ve accomplished with Mathalicious so far. Truly amazing! The world needs more people like you.
Honestly, $150 a year is within most people’s budget (even teachers) and saying you can’t afford it is really saying you don’t value it or you expect it for free.
I wonder why you don’t add a $30/mo and $50/mo plan for people who know what you are delivering is a steal at $20/mo. I’m serious about this.
And I can’t wait for your real world lesson plan based on this experiment.
Keep up the great work.
You guys are awesome to do have flexible pricing! THANK YOU SOOOO MUCH!
Yeah! What Raj said!
And I’m also totally serious about this…Maybe a Mathalicious coffee mug at the higher subscription levels? Do NOT underestimate the marketing value of swag!
Karim, I really appreciate educators like you who are dedicated to the craft of “teaching” our youth. It is amazing the amount of time and energy that you have put into this venture. Kuddos to you! I am impressed with the “real world” lessons. This lends me to question, “why don’t you contact the companies that you use in your lessons?” Particularly in the lesson pertaining to salaries. You highlight the salaries of famous athletes such as Lebron James and incorporate images/videos of brands like Nike, McDonald’s, Sprite, etc. I suppose you can contact these corporations and receive a sort of royalty fee. I believe that this is worth looking in to.
Good resources and a difficult problem to solve (“right” pricing). Depending how this goes, you might consider a “dutch auction” model (the more orders the lower the price) to encourage word of mouth.
Karim,
Firstly – let me applaud your honesty in admitting that good, curated content costs money in this world where our friend Sal has led people to expect that one can make available vast tracts of educational material for free.
I am always wary of folks who claim that they can provide a quality product in a sustainable fashion for free. Because quality takes care and care should rewarded – there is a great difference between fleecing your customers and giving away your hard work for free.
As a fellow math educator, I am more proud of efforts like yours which have the courage to believe that their work is worth the value it provides than others who claim a moral higher ground by giving away their stuff for free – be it Geogebra, CK12 or Khan Academy.
Best of Luck – and again am really proud of your work and my small association with it
Vishakha
I just stumbled upon your site via Hacker News Daily. It looks great, and I’m very interested. A quick Google search indicates that the word “homeschool” doesn’t show up anywhere on your site. My family homeschools because we are very dissatisfied with the current public school system. Part of this is because my wife is a former high school instructor, and knows the shortcomings all too well. Unfortunately for me, all my kids’ school supplies come out of my pocket, and we can’t get a refund of our school district taxes just because we’re using something different. Educational resources are too often priced for school districts. $20/month would break our budget (I gave up Starbucks and a bunch of other luxuries when we pulled our kids from school), but $5/month should be doable. Maybe you could use “per seat” licensing, like Microsoft does. $1/month for me , $5 for one class-hour, and other increments up to an entire school. Anyway, I will be showing your site to my wife this evening and I’m sure we’ll be signing up shortly..