I am glad to share my experience. If you end up learning from my mistake, I am happy for it. The sad thing is that I was thinking that I was doing it right: I had the whole freemium thing with individuals using the free version and larger entities going for the paid accounts. Turns out that if there is a large competitor in the space it doesn't matter that they are twice as expensive for their cheapest plan: a business will go with them because of the reputation. In fact, I think their price point makes people feel more comfortable. My paid plan was $4/month (vs PingDom's $9), but I think that's what made it seem like the cheaper alternative. But the biggest problem was that the free plan was too good. It should have lasted for 30 days and then automatically started charging for the premium service.

Anyways, good luck!