Elon Musk made a strategic pricing decision for X Premium, formerly known as Twitter Blue, setting the monthly subscription cost at $8. This choice was influenced by the familiar price point of a cup of Starbucks coffee, as detailed in the book "Character Limit." Let's delve into the insights behind Musk's pricing strategy and the key influencers involved.
Consulting Inner Circle for Pricing Strategy
Before finalizing the price of X Premium, Elon Musk engaged with a select group of friends and acquaintances, some with limited experience in the social media realm. Among these individuals were David Sacks, a prominent venture capitalist, who proposed alternative pricing models.
Varied Price Suggestions
During the deliberation process, diverse pricing suggestions were put forth by Musk's inner circle. David Sacks recommended increasing the subscription fee to $20 per month, emphasizing the value of luxury branding and positioning. On the other hand, Jason Calacanis proposed a yearly fee of $99, believing that a double-digit price would attract a larger user base compared to a $100 annual charge.
Emphasis on Accessibility
Author Walter Isaacson, shadowing Musk for a biography project, stressed the importance of accessibility in pricing. Isaacson highlighted the need for a low price point to encourage widespread adoption of X Premium among users of varying financial backgrounds.
Final Decision at $8 per Month
Despite considering higher price points, Elon Musk ultimately settled on $8 per month for X Premium. A pivotal moment in this decision-making process was when Musk's assistant, Jehn Balajadia, advocated for affordability, citing the financial constraints faced by many individuals. Musk resonated with the idea of pricing X Premium equivalent to a cup of Starbucks coffee, aligning with his vision of democratizing access to exclusive features.
Public Announcement and Subscriber Response
On November 1, 2022, Elon Musk took to Twitter to unveil the pricing strategy for X Premium, emphasizing fairness and inclusivity in access to premium features. Following the rebranding of Twitter to X, the company garnered between 950,000 and 1.2 million premium subscribers, constituting less than 1% of its total user base.
As the narrative unfolds, Elon Musk's pricing strategy for X Premium sheds light on the intersection of affordability, exclusivity, and user engagement in the digital landscape.
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By: lloydlee@insider.com (Lloyd Lee)
Title: Elon Musk’s Decision: Why X Premium Costs $8 Revealed
Sourced From: www.businessinsider.com/how-elon-musk-priced-twitter-blue-starbucks-sacks-isaacson-calacanis-2024-8
Published Date: Mon, 26 Aug 2024 04:45:15 +0000
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