Not the parent, but DAUs make a lot of sense when you have lots of external collaborators than seldomly login. That way you don't pay a full month license for somebody that logged in twice or once in that period, I rather log them in manually :-)
About the pricing, I haven't made the calculations in your product, but in other products I sometimes miss a middle ground between free and pro like a "hobby" or "mini" tier. maybe I have a small product, an SMB, or a personal thing thing that needs a service, and I don't want to be a "freeloader" on the free plan, but the pro is too much.
There are services I've used that I know I'll stop using once I grow out of the free plan, because it's so expensive.
I guess this would be a good start, it would allow instances for smaller companies.
Another thing would be to mix daily active users and monthly active users. For example in the ratio 1:10 (100 DAUs or 10 MAUs). Just cap the DAU counter for a user at 10 logins per month.
It's really hard to predict how often users are going to log in. So if you have a company with 50 people, you know 50 MAUs are enough. But will 500 DAUs be enough? You just don't know that in advance. The DAUs can also grow a lot even if MAUs stay the same, if your product becomes better and is used more often in the company. Really hard to tell the customer at a later stage that Zitadel is now more expensive, because people log in more often. The DAU/API limit is also an incentive to cache authentication/2FA longer and compromise on security.
Maybe remove a few enterprise features for the cheaper plans like SAML or restrict branding. But please keep passwordless/2FA, for me those features were the main reason to try Zitadel, that's one of the features where Zitadel shines over auth0.
About the pricing, I haven't made the calculations in your product, but in other products I sometimes miss a middle ground between free and pro like a "hobby" or "mini" tier. maybe I have a small product, an SMB, or a personal thing thing that needs a service, and I don't want to be a "freeloader" on the free plan, but the pro is too much.
There are services I've used that I know I'll stop using once I grow out of the free plan, because it's so expensive.