Few months ago, I had an idea that might be either a breakthrough or a delusion.
"What if we gave away unlimited users for free? What if 75% of our customers never paid us? What if we charged ₹2,999 (~$35) when competitors charge ₹15,000/20,000 (~$170/$225)?"
My inner skeptic (and several advisors) said: "That's financial suicide."
But the math I kept running said: "This might actually work."
So I am spending the next couple of years testing a hypothesis about SaaS pricing in India & MENA region. I might be completely wrong. But I wanted to share the thinking in case it's useful to others, or in case you can help me see the flaws I am missing.
What I Keep Seeing (And Can't Stop Thinking About)
I have spent some time talking to and observing small business owners's workflow. The pattern that emerged surprised me:
Most are still running their businesses on Paper (Notebook, Diaries, Khatabooks), Excel, WhatsApp...
Not because they haven't heard of CRMs or project management tools. They have. Many have tried them.
But they went back to papers/spreadsheets because:
- Per-user pricing scales painfully (₹800-2,000 per user × 15 employees = tough economics for a small business)
- Most tools feel built for enterprises, not for a 12 person operation in a small town in Bihar
- 14-day trials ends just as you've finished setting things up
- Free tiers feel more like demos than real tools
- User experience was not good enough
I kept wondering: Is there a different way to think about this?
The Experiment I'm Running
I am building what I'm calling a Business Operating System (though I am honestly still debating the name: "Business Operations Platform"? "Business OS"? Would love your thoughts on this).
The concept: Everything a small business needs in one place. Contacts, deals, projects, accounting, invoices, tasks, inventory - all connected.
But here is the experiment that might be naive:
What if we offered unlimited users on every tier? Including free?
When I mentioned this in conversations, the reactions split roughly:
- "That's impossible to monetize" (most people)
- "Your costs will destroy you" (several people)
- "Interesting... tell me more" (a few brave curious souls)
I am still figuring out which group is right.
The Math That Surprised Me (And Maybe I'm Missing Something)
Here's what I found when I modeled this out, and I'd genuinely welcome someone poking holes in this:
Estimated infrastructure cost per user at 5,000 users: ~₹5/month
Potential revenue per paying user: ₹2,999-9,999 (~$35-$110)/month
Projected gross margin: 90-95% (Excluding Payrolls ofcourse)
I keep double-checking this because it seems too good to be true.
The reasoning:
Hypothesis 1: Maybe Volume Works Better Than Premium
There are different paths to ₹10 crores (~$11M):
- 50 enterprises at ₹20 lakhs each, OR
- 10,000 small businesses at ₹30,000 each
The first path is proven. The second is uncertain. But everyone is competing for those 50 enterprises. What if there is an opportunity in the 10,000 small businesses that others are overlooking?
I am not sure yet. But I am curious enough to try.
Hypothesis 2: Infrastructure Might Be Cheaper Than I Thought
When I started modeling costs, I assumed infrastructure would be the killer. But modern cloud infrastructure has gotten remarkably efficient:
At 5,000 users, total monthly infrastructure costs might be around ₹15,000-18,000 (~$170-$200):
- Application servers
- Database servers with redundancy
- Caching layer
- Email infrastructure
- File storage (2+ terabytes)
- Monitoring and backups
₹15-18k to potentially serve 5,000 users.
This assumes:
- We use efficient tech
- We are smart about caching and optimization
- We self-host where it makes sense
- Storage costs continue their downward trend
- No major surprises (there are always surprises)
What am I missing here? I am genuinely asking.
Hypothesis 3: Maybe Network Effects Matter More Than Conversions
Our working assumption: maybe 20% of users eventually become paying customers.
That means 80% never pay us directly.
But what if they're valuable anyway?
- They tell others (word-of-mouth in MSME circles is everything)
- They create network effects (more users = more valuable platform)
- They generate insights (understanding what works will helps everyone)
Or maybe I am rationalizing giving away too much for free. Hard to say without testing.
An Idea About Habit Formation
Standard free trials: 14 days
What I am considering: 180 days of full access
The thinking here:
- Research suggests habits take 60-66 days to form
- 14 days is barely enough to finish setup
- 180 days gives you six full monthly cycles to integrate the tool into your workflow
After 180 days, instead of locking features or data, we would simply transition you to the free tier. Your data stays. You can still access everything. The only difference is limits on adding new data.
No pressure. No hostage-taking. Just: "You've grown beyond the free tier. Maybe it's time to consider upgrading?"
At least, that's the theory. Reality might teach us something different.
The Pricing Question That Keeps Me Up
I am planning to price around ₹2,999/month for a full-featured tier.
For context:
- Traditional SaaS charges ₹800-2,000 per user
- A 15-person team might pay ₹12,000-30,000/month elsewhere
- We'd charge ₹2,999. Total. For everyone.
This could be:
- Too low (might signal poor quality, might attract only price-sensitive customers)
- Too high (might still be out of reach for struggling MSMEs)
- Just right (maybe it's impulse-buy territory for growing businesses)
I don't know yet. Pricing is part psychology, part economics, part guesswork.
But here's the interesting part: Even at ₹2,999 (~$35), the unit economics might work because:
- Per-user pricing taxes growth (you pay more as you succeed)
- Flat pricing encourages adoption (add your whole team, no penalty)
- Each additional user costs us almost nothing in infrastructure
- But increases switching costs (more users = harder to leave)
Is this thinking sound? Or am I missing something fundamental about willingness to pay in this market?
What I am Learning About SaaS Playbooks
The traditional approach seems to be:
- Build a tool
- Offer a limited trial
- Gate features to create upgrade pressure
- Charge per user to maximize revenue
- Focus on enterprise customers who can afford it
This works really well for certain markets, especially when:
- You're selling to enterprises (budgets are larger)
- You're solving acute pain (they need your solution now)
- You're in a winner-take-all market
But I am wondering if there is room for a different approach when:
- Selling to price-sensitive small businesses
- Solving chronic pain (they've lived without a solution for years)
- Entering a market with established players
Maybe you can win by being more generous rather than more restrictive?
Or maybe I am underestimating how hard customer acquisition will be at any price point.
Time will tell.
What Success Might Look Like (If This Works)
Here is what I am hoping for, though I am fully aware it's aspirational:
In 3 years: A shop owner in Bengal might say, "We use [this platform]. It works well for us."
In 5 years: Maybe "switching to [this platform]" becomes as natural as "switching to Gmail" was in 2007.
In 10 years: If everything goes right (and many things could go wrong), perhaps 500,000 Indian businesses might be using this.
The potential math if we somehow get there:
- 500,000 total users
- 20% conversion = 100,000 paying customers (hopeful, maybe naive?)
- Average revenue: ₹3,500/month
- Potential ARR: ~₹421 crores
- Infrastructure costs: Perhaps ₹40 lakhs/month
- Theoretical margin: 98% (Exclusing Payroll ofcourse)+
But honestly, the numbers that matter more to me:
- Helping businesses run more smoothly
- Giving people less chaos, more clarity
- Contributing to better organized operations across thousands of companies
If we can do that (even at a smaller scale than these projections) it would feel meaningful.
What Could Go Wrong (Plenty, Actually)
I have been thinking a lot about this. Here are the real risks:
1. Customer Acquisition Might Be Brutally Hard
Even at ₹2,999/month, we need to acquire customers for under ₹8,000 to hit reasonable payback periods. In a noisy market where everyone's competing for attention, that's genuinely hard. What if CAC ends up at ₹15,000? The model breaks.
2. Behavior Change Is Really Difficult
MSMEs have used Khatabooks (Papers) and Excel for decades. "It works fine" is probably the most expensive sentence in Indian business, and changing that mindset... I might be underestimating how hard that is.
3. Conversion Rates Might Be Worse Than Expected
I am modeling 20% free-to-paid conversion. What if it is actually 10%? Or 5%? The model still works mathematically, but growth becomes much slower. And patience (mine, investors', team's) isn't infinite.
4. Competitors Could Copy This Tomorrow
There is nothing technically stopping Zoho, Odoo, or Freshworks from launching an "unlimited users" tier. If we prove this works, they can pivot faster than we can scale. Our only defense is speed and focus (which might not be enough).
5. Infrastructure Surprises Are Inevitable
My cost projections assume:
- No major security incidents requiring expensive remediation
- Storage growth stays linear (what if users store way more than expected?)
- No cloud provider price increases
- Our architecture performs as expected at scale
One bad assumption and margins compress quickly.
6. Market Size Assumptions Might Be Off
I am betting there are hundreds of thousands of Indian MSMEs ready to adopt a business platform. What if the real number is 10% of what I think? Or what if they exist but aren't findable through digital marketing? (Will have to come up with different strategies.)
7. I Might Be Solving the Wrong Problem
This is the scariest one. What if MSMEs don't actually want an all-in-one platform? What if they prefer point solutions? What if the real barrier isn't pricing but something else entirely, like trust, or integration with their existing tools, or something I haven't thought of? Though, integration with existing tools is part of the plan.
I will not know until we launch. And by then, I'll have invested a year and whatever runway we raise.
Why I'm Doing This Despite the Uncertainty
Recently, I met a business owner in Pune. 15 employees, about ₹3 crore revenue, growing steadily at 25-30% year-over-year. Impressive by any measure.
He was managing everything across multiple diaries, khatas, notebooks, tally, gmail and many other softwares (semi digital, not completely paperless). Customer data in one. Inventory in another. Projects in a third. Nothing connected. Constant manual reconciliation.
I asked why he hadn't adopted a CRM or business management tool.
His answer was simple: "I tried Zoho. ₹12,000 (~$135) a month for my team. That's basically one employee's salary. I can hire another salesperson or pay for software. Which would you choose?"
He wasn't wrong. The ROI calculation was genuinely unclear.
That conversation stuck with me. Not because I thought "I can build something better" - I'm not sure I can. But because I kept thinking: "What if the pricing model itself is the problem?"
Maybe the software isn't wrong. Maybe the business model is.
And once I started seeing it, I couldn't unsee it.
Where We Are Now
I am currently building the first version. It's early. Really early. Target for initial testing: Q2 2026.
The team is small, bootstrapped, running lean on our budget. Current runway: 12 months if I am careful enough.
I am looking for:
Design Partners - 10-15 businesses willing to test an imperfect V1 and give honest, brutal feedback. Not looking for cheerleaders; looking for people who'll tell us what's broken.
Strategic Investors - People who understand that this is a long game. We're not building a quick flip or chasing unicorn status in 18 months. We're building something sustainable that might take 5-7 years to mature. If that timeline and approach resonates, I would love to talk.
Advisors and Mentors - Especially folks who've built for Indian MSMEs before, or who understand the unit economics of high-volume, low-price SaaS models. I have way more questions than answers.
Honest Skeptics - People who'll help me see the flaws I am not seeing. The assumptions I am wrong about. The risks I am underestimating.
If any of that resonates, whether you're excited about the idea, skeptical but curious, or think I am missing something important, I'd genuinely appreciate hearing from you.
The Questions I'm Sitting With
Can you build something substantial by being generous rather than restrictive?
Can you win by giving more and charging less, trusting that value compounds over time?
Can you create something meaningful by refusing to play the traditional game?
I honestly don't know yet. These aren't rhetorical questions - they're real uncertainties I'm living with.
But I think they're worth exploring. And if you believe there might be a better way to build software for Indian businesses (one that doesn't require choosing between growth and affordability) maybe there's something here worth paying attention to.
The math suggests it could work.
The market seems to need it.
The risks are very real.
I am going to spend the next couple of years finding out which forces are stronger.
If you have thoughts (supportive, skeptical, or anywhere in between) I'm genuinely interested to hear them.
P.S. If you think my infrastructure cost assumptions are off (they might be. There are always surprises), or if you think 20% conversion is too optimistic (maybe?), or if you have strong opinions about "Business Operating System" vs "Business Operations Platform" (I'm genuinely undecided), I'd love to hear your thinking. I'm very much learning as I go.
P.P.S. If you are interested in early access, being a design partner, or just want to share perspective, feel free to reach out. Looking for genuine conversation, not just validation.
About the Author:
Currently building something that might work or might teach me expensive lessons. Former Engineer/Architect. Now exploring whether there's a better way to build business software for Indian MSMEs. Based in Bengaluru. Learning more than I'm teaching. Always open to conversation.
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