A SaaS Pricing Strategy Canvas to Guide the Pricing Process in SaaS Startups

Abstract

Canvases, such as the Business Model Canvas and Lean Canvas, are widely used tools for organisations to visualise and organise their business models. A multivocal literature review of the current state-of-the-art has shown that these frameworks do not sufficiently address the complexities of pricing. The literature review has shown that identifying a software-as-a-service (SaaS) pricing strategy is often performed in an ad-hoc and unstructured manner, leading to failure of the startup. This problem highlights the need for a specialised tool to support startups in making informed pricing decisions. The aim of this paper is to develop a pricing canvas to guide startups in identifying a more structured pricing strategy for their software product. To accomplish this objective, a first version of a Pricing Strategy Canvas was developed, integrating key activities and elements from the Business Model Canvas, Lean Canvas, and other literature. Expert interviews were conducted to refine and improve this canvas, incorporating best practices and real-world insights from SaaS startups and small medium enterprises. The final version of the SaaS Pricing Strategy Canvas bridges the gap between theory and practice, offering a tool that combines both theoretical knowledge and practical application. The canvas was validated and evaluated during hands-on workshops, which proved the canvas to be an effective way of sparking valuable conversations between (co-)founders, inspiring critical thinking instead of guessing, and supporting the flexible, uncertain, and experimental nature of startups. Ultimately, the Pricing Strategy Canvas helps startups make more informed, data-driven pricing decisions.