Y Combinator Kevin Hale — Startup Pricing 101

How should we price our service or products? We are going to cover from first principles.

We are going to talk about a lot of things surrounding pricing, there are a lot of things to consider for pricing. And since start-ups are usually working in a new market, it is hard to compare. So it is much harder.

The acquisition is more customers, retention is about keeping customers, and monetization is how much money per customer. The basic idea behind the pricing is supply and demand.

The relationship between value, price, and cost will control how your company will grow. The larger the gap between cost and price the more we want to sell. And the smaller gap between value and price, the more customers want to buy since they are getting that much value.

One way is to know the value of your company and figure out your price. In start-ups, you should strive for value-based pricing. The problem with that is they don’t know the cost and misplaces the actual price.

Prices are too low.

Underestimate your cost. (Margins not high enough)

You don’t understand your value, you have to convince the customers.

Focus on the wrong customers.

Above are some of the mistakes made due to wrong pricing.

Five different stages of the company, startups are in the first two stages, and thing to keep in mind the customers who are shopping at the first stages are not the same kind of…