When you sell a product via direct sales, your initial price point has to be high enough that after factoring in your close rate, you are making money for each AM/SE account team in the field. You can't sell a specialized $5000 product direct, because the AM alone runs you $150-200 fully loaded, and would need to solo-close a deal a week just to break even.

Yep. In that sort of business model, they have to set really high price points because:

1. they have to cover a much higher staff cost for the "non-productive" types (compared to the 37Signals model, eg.)

2. they have to, as you say, go to the conferences, strip clubs, steak dinners with clients, going really big with paid advertising early, etc.

3. pay for all the costly-but-failed sales attempts

If instead you forego all those extra costs, and try to keep it cheap and grow organically, you can sell at lower price points, and keep revenue ahead of costs, instead of the other way around. With no big upfront cash burn needed, then no big outside upfront investment needed, and therefore the founders can continue to maximize control, freedom and retained equity.