To me it seems obvious, “charge money for your product”, but for some reason engineers and entrepreneurs love to under value their hard work and instead want to use Venture Capitalists as a business model, or are worried about scaring off users. When an entrepreneur comes into my office and says “We have 3 months of money left.” You need to be willing to make drastic changes, and charge, or at the very least charge more!
I have pushed 4 startups (All different types, mostly VR) in the last month to charge for their product, and to focus on delivering value only to their power users. One of these companies was able to quadruple revenue from $700/month to $3,200/month, just by charging more, not by changing the product. Now they cover all over their costs, and are off to the races, they don’t need to raise money anymore, and are still growing.
Here is how you can think about it:
- Do I have a product?
- Launch it and Charge for it.
A startup is all about solving someones problem. If you are solving someones problem and saving them time, you should be rewarded for that time.
“Adam, but my competition raised money.”
Great, then you better do less and charge more. You better start making money, while they burn through theirs. It’s not about winning the battle today, it’s about winning the war in ten years.
- Know who your customer is.
- Charge your user. Make your power users insanely happy.
- Win.
“But Adam, I might alienate my current users.”
If they aren’t willing to pay for it, you aren’t solving their problem.
There might come a time when you are going for a land grab, but a land grab comes when you know where the value is and how to price your product. When it is “land grab” time, VCs and Investors will be there, we smell when that’s happening.
Long story short — Get customer, Build value, Charge customers.
