I agree with you Seth. I try to ask the reference for other contacts that would be relevant to the candidate. Also in my experience, the "would you hire this person again" question is a tough one to answer straight-up for the reference. As an alternate, I ask: "if you were to rehire this person, what advice would you give them to ensure greater success in their position". The responses have been pretty insightful.

I would argue that most web applications do not charge enough for their products. You just have to make it EASY to get started and experience the value of the service, which includes making the pricing easy to understand. www.wufoo.com is a great example for me as we use it all the time and are paying customers. They made it dead simple to give it shot and we became hooked on the service. To Bill's point, they probably only needed to provide a trial and not a freemium offering to land our business.

With regards to Aziz's point, I believe the value your product brings to the customer should improve over time, not just your operating margins. Either raising prices or providing additional tiers of service are ways to capitalize on your product's evolution. Keeping in mind you have to stay in touch with the "Is my app is a good value for the price? (Y/N, 1 - 5)" answer from your target market.