What’s the best way to set pricing?

Bill Macaitis (CMO at Slack)
Five Words of Wisdom from SaaS Office Hours with Bill Macaitis

The price a software startup can charge is a function of the difference in net promoter score between that startup’s product and its competition’s. In other words, a startup product with a very high promoter score compared to the competition can charge a premium in the market and vice versa.

What’s the best way to set pricing?

Bill Macaitis (CMO at Slack)
Five Words of Wisdom from SaaS Office Hours with Bill Macaitis

The price a software startup can charge is a function of the difference in net promoter score between that startup’s product and its competition’s. In other words, a startup product with a very high promoter score compared to the competition can charge a premium in the market and vice versa.

Jason Fried (Co-Founder & CEO at Basecamp)
How to price something

You are not allowed to ask people: “What would you pay for this?”, “Would you buy this for $20?”, “How much do you think this is worth?”, “What’s the most you’d pay?”.

Jason Fried (Co-Founder & CEO at Basecamp)
How to price something

Put a price on it and put it up for sale. If people buy that’s a yes. Change the price. If people buy, that’s a yes. If people stop buying, that’s a no.

Seth Godin (Founder at Yoyodyne Entertainment)
Seth’s Blog: Anchoring can sink you

Canny negotiators know that people respond to anchors. If you tell me that your baseball card is for sale for $18, I’m unlikely to offer you $3. Your offering price anchored the conversation.

Neil Patel (Co-founder at Crazy Egg)
5 Psychological Hacks That Will Make Your Pricing Page Irresistible

1. Place a third and mispriced option to nudge customers toward the preferred purchase. 2. Put your best option in the middle. 3. Show the value of pricing options, not just the price. 4. Point out which option is the most popular. 5. Make your prices relatively consistent with each other.

Seth Godin (Founder at Yoyodyne Entertainment)
Seth’s Blog: When to charge by the hour

Most professionals ought to charge by the project, because it’s a project the customer wants, not an hour.

Surgery, for example. I don’t want it to last a long time, I just want it to work. Same with a logo or website design.

Or house painting. The client is buying a painted house, not your time.

One exception: If the time is precisely what I’m buying, then charging by the time is the project. Freudian therapy, say, or a back massage.

Another… (read more)

David Jackson (Founder, Seeking Alpha)
Pricing your product? Don’t be afraid to ask for a *lot* of money | A Founder’s Notebook

Pricing your product? Don’t be afraid to ask for a *lot* of money

Judah Gabriel Himango (Founder & CEO at BitShuva)
My startup’s dead! 5 things I learned – Debugger.Break();

Money is just business. It’s not insulting to ask for a lot of money. Charge as much as you can.

Ruben Gamez (Founder of BidSketch)
What I Learned From Increasing My Prices | ExtendsLogic

Before thinking about price, I had to restructure my features / pricing plans. I created a list of the top features and ordered them by importance. Then, I removed core features or the ones that every segment would expect a product like mine to have.

Raj De Datta (CEO at BloomReach)
Principles

Let’s say you want to build a $100M recurring revenue SaaS business. There are really only two fundamental ways of doing it: 1. Tackle the enterprise: Sell 1000 companies @ least $100,000 per year deals with a market size of at least 5,000 companies. 2. Tackle the small & medium business: Sell 100,000 companies @ least $1,000 per year deals with a market size of at least 500,000 companies. The valley of death is often in the middle.

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
Measuring Price Elasticity And More – AVC

The good news is that it has never been easier to determine the price elasticity curve of a product or service. Here is how you do it: 1. offer the product or service on the web and make the purchase as easy as possible (Stripe and/or Paypal). 2. establish the range of pricing you want to measure, start at a number higher than you can imagine anyone paying and end at a number that is equal to the cost to produce your product or service (the cost … (read more)

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
Negative Gross Margins – AVC

The bottom line is the primary way this strategy [market entry pricing] works is if you obtain a monopoly position in your market and you are the only game in town for your customers and suppliers. But given the massive amount of startup capital that is out there and the endless number of entrepreneurs starting businesses similar to each other these days, I think it will be hard for most companies to achieve monopoly position