Pricing is one of the hardest things in every founder’s journey. A particular price attracts one kind of customers and shoos away others.
Why are we complicating it?
- We may not know the unit to price. We go wrong with the unit – we price the wrong thing.
- We think we know our costs. As costs shoot up – our pricing can look weak to ourselves.
- We want to make and X profits per sale. This conflicts with what customers are willing to pay for it.
- We want to scale and want to fend competition. This drives the price down and we make the eco-system fail.
The right way to get the pricing is to do it
- without fear – knowing you will go wrong with it
- and then learn very quickly from it
- and adapt as you get feedback from customers
What customers need in pricing?
- If they don’t understand the unit of pricing and it connects to them – they don’t pay for it.
- Even if they love using your product or service.