I Scared Away Customers By Making My Product Too Cheap
Every entrepreneur worries about over-charging for their products. Should you also worry about under-charging?
I was showing my product to a venture capitalist, and he was impressed by what my team had built. Or, at least, I think he was impressed because he said, “This is incredible! All the companies in my portfolio should be using it. How much does it cost?”
“It’s $50 per month,” I answered.
“You mean $50 per user?” he asked.
“No,” I said. “It’s $50 for the company.”
“$50 dollars?” he asked. “For this entire thing?”
“Yes,” I said proudly.
“Oh,” he replied, his enthusiasm clearly waning. “I’ll be sure to mention it to my CEOs.”
After our meeting, I followed up with the VC asking for intros to his CEOs. Despite sending multiple emails, he never responded.
Sure, maybe he’d been lying to me, and he didn’t really like my product. But I’m pretty sure that wasn’t what happened. My product wasn’t the problem. My problem was the price.
