Find the right order of magnitude first and stop arguing about the exact number. Are you a ten dollar product, a hundred dollar product, a thousand dollar product or a hundred thousand dollar product? That decision follows from who buys, what budget it comes out of, and what they do today instead. Bound it from below by what it costs you to serve a customer and from above by what a heavy user is worth. Most early founders underprice badly, so if nobody has flinched at your price you are almost certainly too cheap. Announce pricing as late as you sensibly can, and build the product so pricing can change without an engineering project.
3 hand-picked resources, 1 India-specific, 3 link-checked. Pick how you want to dig in.
Why we picked it The bounding method for a first price (cost to serve as the floor, cost of a heavy power user as the ceiling) plus the advice to keep pricing changeable in the product. Written for founders who are about to underprice, which is most of them.
From Andreessen Horowitz by Steven Sinofsky long read
Open a16z.com →Why we picked it Campbell ran pricing research at ProfitWell across thousands of companies, and his sequence (value metric, then segments, then experiments) is the one to follow. The line worth memorising: get the value metric right and you can get a lot of the rest wrong.
From Lenny's Newsletter by Patrick Campbell with Lenny Rachitsky long read
Open lennysnewsletter.com →Why we picked it Gives you a way to actually pick a value metric rather than just being told to have one: plot activities by frequency and importance, then monetise the medium-medium ones and subsidise the high frequency ones. Worked through with CleverTap as the example.
From Accel India Insights (SeedToScale) by Dr. Ajay Sethi long read
Open medium.com →How pricing and packaging reads from a different seat.
The same ground, over in Money, pricing & model, our Starting Up track.
The same ground, over in Money, pricing & unit economics, our D2C track.
