Should you undercut pricing when your app almost runs itself?
I’ve been circling around one idea lately.
If an app costs me less to build and operate because a big part of the work is automated, why wouldn’t I just charge less than everyone else?
On paper, the logic is clean. Competitors have bigger teams, heavier support, slower processes, and sometimes more expensive stacks. If I can build faster, iterate faster, maintain with a lot of autonomy, and keep the structure lean, I obviously have more room on pricing.
So yes, the natural temptation is: I’ll ask an LLM for 10 competitors, check their pricing, and come in below them.
The problem is that if that’s all you do, you can hurt yourself pretty fast.
The trap of “same thing, cheaper”
If your whole positioning becomes “we do the same thing, but cheaper,” the market gets a very clear message: your main advantage is price.
That pulls in a certain kind of user. Usually the most price-sensitive ones, the least loyal ones, and not always the people who give you the best product feedback. That’s not automatically bad, but it’s a hard place to build from.
You don’t want to become “the cheap clone.” You want to become the product that’s simpler, cleaner, more focused, and also a better deal.
That distinction matters a lot.
The real advantage of an aI-heavy app business
The real advantage is not just lower pricing.
It’s that you can:
- ship faster,
- test more angles,
- iterate more often,
- fix things quicker,
- launch more niche products without drowning,
- and adjust packaging almost continuously.
So yes, AI may lower your cost structure. But the bigger win is that it speeds up how fast you learn from the market.
And honestly, that is often worth more than shaving a couple dollars off your monthly plan.
Where aggressive pricing actually works
I still believe in aggressive pricing. I just don’t believe in reckless pricing.
The healthier version looks more like this:
- benchmark competitors,
- study their prices, but also what they leave free,
- look at what they lock behind the paywall,
- build an offer that feels cleaner,
- then come in slightly below them, or at the same level with stronger perceived value.
If the market sits around $7.99 or $8.99 per month, you don’t need to arrive at $2.99 and start a price war. You can be at $6.99 or $7.99 with a better annual plan, a cleaner onboarding, and a smarter paywall.
A lot of the time, that’s enough.
The paywall matters more than the price
For me, the biggest issue is not even the price itself. It’s where the paywall shows up.
If you block too early, the user doesn’t feel anything yet. They won’t pay because they haven’t understood the value.
If you give away everything, they may love the app, but they have no reason to upgrade.
The balance is simple: let the free version deliver the first real win, then charge for depth.
That’s the model I keep coming back to:
- free should allow the aha moment,
- paid should unlock continuity, depth, or intensity.
That’s where freemium starts to make sense.
What i would keep free
In most cases, I’d keep these free:
- the full onboarding,
- the basic use case,
- one or two features that prove the value,
- the mechanics that create retention,
- enough access to make the user come back tomorrow.
This matters. If the free version doesn’t create habit, then you don’t have a conversion funnel. You just have a prettier landing page.
What i would charge for
The paid layer makes more sense around everything that adds depth.
For example:
- full history,
- longer data retention,
- advanced analytics,
- deeper customization,
- stronger AI,
- automations,
- exports,
- richer sync,
- higher usage limits.
I especially like limited data retention on free plans. Not in a nasty way. Just enough to keep the app useful while making the limit obvious once someone really starts relying on it.
Simple example:
- 7 days of history on free,
- maybe 30 days on another product,
- then full history on pro.
The free user still gets value. The engaged user starts to feel what they lose if they stay on the basic tier. That feels much more natural than throwing a paywall pop-up in their face after 30 seconds.
Retention features vs premium features
I think there are really two families of features.
Some features make people come back. Others add comfort, control, power, or convenience.
The first group should often stay free, or at least be easy to access early. The second group is usually where the paywall belongs.
That sounds counterintuitive at first, because there’s always a temptation to monetize the thing that works best.
But if you lock the feature that creates retention, you can kill the loop that was supposed to lead to conversion in the first place.
The product stops breathing.
My personal rule right now
If I had to summarize the strategy in one sentence, it would be this:
I want an app that feels simpler, more focused, with a better free value moment, then a paywall that monetizes depth. And I want pricing that is a bit more aggressive than the market, without turning the brand into a discount product.
So not: “we are the cheapest.”
More like: “we are cleaner, easier to understand, and the deal is better too.”
That is much stronger.
The thing to watch closely
The danger, when you can launch fast with heavy automation, is thinking that production cost alone should define your price.
In reality, price is not just tied to cost. It’s tied to perceived value, trust, timing, the urgency of the problem, and how well the offer is packaged.
You can have a product that is very cheap to operate and still underprice the value it creates.
That’s a trap too.
What i would do for each app
For every launch, I would use a process like this:
- Use an LLM to get a first list of competitors.
- Manually verify 5 to 10 real ones.
- Benchmark monthly, yearly, and lifetime pricing if it exists.
- Audit the free vs paid package.
- Identify the real aha moment.
- Decide clearly what stays free to create habit.
- Decide clearly what becomes paid to sell depth.
- Position slightly below the market, or at equivalent pricing with better packaging.
Simple. Repeatable. Concrete enough that it doesn’t turn into theory.
In practice
I believe more and more in smaller, sharper products that are easier to improve and easier to monetize with smarter paywalls.
You don’t need a giant feature monster to justify a subscription. You mostly need the user to feel a real friction disappear quickly, then understand naturally why the paid version is worth it.
If AI gives me more margin, good. I’ll use part of that margin to create a better price.
But not to build a discount brand.
I think that would be a mistake.