Money, Pricing & Model

How do I price my very first product when I have no idea what to charge?

A starting point

Start from the value you create for the customer or the cost of their current alternative, not from your costs, and then just talk to people about money early and often. Pick a number that feels slightly uncomfortable to say out loud, because most first-time founders underprice out of fear. You'll adjust it within months, so treat your first price as a hypothesis to test, not a decision to agonize over.

Go deeper

Hand-picked from around the web, each with a note on why it earns your time.

3 resources 3 link-checked Watch Read

Watch

▶️ Video
✓ Link checked Free Beginner

Why we picked it Kevin Hale's YC lecture is the clearest introduction to pricing first principles and the mistakes founders repeat. The pricing-thermometer framework (cost, price, value) is worth the watch alone.

Startup Pricing 101

On ycombinator.com by Kevin Hale (Y Combinator) ~35 min video + transcript

  • The most common pricing mistake is charging far too little
  • Price sits between your cost and the value delivered, anchor to value
  • Small price increases often have an outsized impact on your ability to grow
Open ycombinator.com →

Read

📖 Book
✓ Link checked Paid Intermediate

Why we picked it This is the clearest full-length argument that price should follow willingness to pay, not your costs or your fear of charging too much. The authors run pricing consulting at Simon-Kucher, and their whole method starts by segmenting buyers on what they will actually pay, which is exactly what a narrow niche gives you leverage to do. Read it as a starting point for building your price around the value a specific buyer gets, rather than defaulting to cheap because your market is small.

Monetizing Innovation: How Smart Companies Design the Product Around the Price

From Goodreads by Madhavan Ramanujam and Georg Tacke ~256 pages

  • Have the willingness-to-pay conversation with customers early, before you finish building, so price shapes the product instead of being an afterthought.
  • Segment buyers by what they value and will pay for, not by demographics, because a narrow well-defined segment often pays a premium for a tailored fit.
  • Sort features into leaders, fillers, and killers so you charge for what the niche actually wants and stop giving away the parts that justify a higher price.
Open goodreads.com →
✍️ Essay
✓ Link checked Free Beginner

Why we picked it This is the classic counterweight to the first-timer instinct to price low out of nervousness. McKenzie's core argument is that price should reflect the value the customer receives, not the hours or ease it took you to build, and that most makers systematically undercharge because they see their product's flaws instead of its alternatives. Read it right after you draft a number, then ask honestly whether you flinched too low.

You Can Probably Stand To Charge More

From Kalzumeus Software by Patrick McKenzie (patio11) About a 10 minute read

  • Price on the value a customer gets, not on how long or how easily you built it: the demand curve is external to you.
  • "Coder's remorse" (undervaluing your own work because you see its flaws) is the main reason founders set a price too low.
  • Because software's marginal cost is near zero, you have far more room to price on value than you think.
Open kalzumeus.com →

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