Today we’re talking about starting to charge your customers money.
1. A common pitfall for most founders is undercharging over fear of rejection. Trust me, you’re going to get plenty of noes anyway, so it’s best not to price as a budget service.
2. Don’t worry about setting too high a price. The “wince” test solves your problem. Where if a customer balks at your price, you simply negotiate down. It works surprisingly well.
3. I recommend segmenting your first customers into 5 groups. For enterprise tools, a group might be just 1 customer. For consumer apps, it might be 100 customers. Let the first customer group use the product for free, we just want feedback. For Group 2, set a nominal fee, say $1, to test the purchasing process. Then for the remaining groups, 3 through 5, escalate the price significantly each time and use the wince test when a customer pushes back.
Best of luck out there.
Sterling Road invests in idea stage and pre-seed B2B startups based in the US, Canada and UK.
