One of the most important lessons that I’ve learned when it comes to company building is from Marc Andreessen:
Simple enough, right? Wrong.
Raising prices is hard because it requires the builder to overcome an incredible amount of internalized-pressure and cognitive load. In other words, this shit gets emotional!
The reason is because, especially in the beginning, you are effectively pricing
yourself — and that can feel really, really hard to do. What, exactly, are YOU “worth” to a customer? That’s a hard question to entertain and ask!
But, the growing entrepreneur knows that it must be done because at the super-early stage, you have to keep pressing on your assumptions, testing your hypotheses, and putting yourself in grossly-uncomfortable positions in order to learn as much as you possibly can about your target customer, the market / industry / vertical, and how much
value per price can be extracted from the ecosystem.
In other words, as Andreessen also likes to say, you have to be “ruthlessly open-minded":
So you have to be ruthlessly open-minded and constantly willing to reexamine your assumptions. You have to take the ego out of ideas, which is a very hard thing to do.
You’re going to make those bets of the places you choose to go and the people you choose to work with. You’re going to screw some of those up.
It’s okay to “screw up” your price in the beginning! It’s actually great data if you’re open-minded enough to see it that way! If no one buys your product, then, you’ve learned something very valuable about your offering and it’s relative placement in the mind of the potential buyer! Take this data and do something with it.
Recently, I raised prices on YEN.CAMP in a way that was transactionally-cheaper (one-time fee is less) but I bumped the
per month cost by
more than 3X! And we still have willing (and excited!) customers.
[This is why we were able to cross the
$1k in MRR mark recently! 💥]
This doesn’t mean that I’ve “landed” anywhere with the price! All it means is that I’ve managed to find one possible “upper bound” to the price matrix that I may eventually build out as the product and service improves.
I’ll sit on these pricing scenarios for a few cycles (e.g. YEN.CAMP cohorts) and see if the market can bear it. If not, I’ll pivot and change it again.
Don’t be afraid to experiment with pricing, just as much as you do with your product design, development, and even marketing copy and/or positioning. In fact, you MUST experiment with
#allthethings if you’re going to build a project that is fiscally responsible and successful (i.e. profitable)!
Keep going — you can do this, I know you can.