Willingness to pay

Evidence that someone will part with money, as distinct from saying they like the idea.

Example

A signed letter of intent, a pre-payment, or an existing budget already being spent on the problem.

Important

'I'd definitely pay for that' is not willingness to pay. Asking for the money — even a deposit — is the only reliable test.

Related terms

  • Customer interview — A structured conversation about what someone actually does today, designed to produce evidence rather than encouragement.
  • Pricing — What you charge, how you charge it, and how the tiers are structured.
  • Confirmation bias — The tendency to notice evidence supporting what you already believe and discount evidence against it.

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)
  • Why customer discovery comes first — The cheapest way to find out you are wrong. Twenty conversations cost two weeks; building the wrong thing costs a year. (10 min)
  • How to run a problem interview — A specific script, the questions that work, and the ones that quietly destroy your data. (15 min)
  • Reading the evidence honestly — Separating what people said from what it means, and noticing when you are hearing what you hoped for. (12 min)
  • Testing willingness to pay — The only reliable test is asking for money. Everything else is people being nice to you. (12 min)
  • Problems versus ideas — An idea is a guess about a solution. A problem is a fact about someone's life. Start from the fact. (10 min)

All 176 terms in the Founder glossary