Pricing

What you charge, how you charge it, and how the tiers are structured.

Example

$29 per user per month, billed annually, with a three-seat minimum.

Important

Pricing is not 'what competitors charge'. It is a statement about who you are for. Most early startups price too low and then cannot afford to sell.

Related terms

• Business model — How the company creates value and captures some of it as revenue.
• Willingness to pay — Evidence that someone will part with money, as distinct from saying they like the idea.
• Value-based pricing — Setting price from the economic value the customer receives, rather than from your costs or a competitor's list price.

Lessons that explain it

• Pricing — Not what competitors charge. A statement about who you are for — and most early startups price far too low. (15 min)
• Testing willingness to pay — The only reliable test is asking for money. Everything else is people being nice to you. (12 min)
• Localisation, currency and pricing — Translation is the smallest part. Currency, payment methods and local price expectations matter more. (12 min)

All 176 terms in the Founder glossary