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As a solo founder, what if I were to flip the pricing model on its head. Let us assume I need $100 per month to survive, my Google adwords budget is $40, my AW
by manishsharan 6y ago
As a solo founder, what if I were to flip the pricing model on its head.
Let us assume I need $100 per month to survive, my Google adwords budget is $40, my AWS /bill is expected to be $45, my overheads are $50 -- how do I price my product ?
- elliotbnvl 6y agoI think the $50-$100 figure is a rule-of-thumb, and Jason goes into some great detail on how he arrives at those numbers in the video. Something else which might seem more appropriate in that case is to determine your price based on the value you deliver rather than the cost it takes you to deliver that value. If your value delivered is less than what it costs you to deliver that value, you have a broken pricing model and there's no way to make it work.
- manishsharan 6y ago>> If your value delivered is less than what it costs you to deliver that value, you have a broken pricing model and there's no way to make it work. You raise a good point. The challenge is how do you quantify the value. Should I be using the cost of alternatives or substitutes ? Or do you evaluate the actual value delivered by improved efficiency or revenue etc. This could turn into a very deep rabbit hole.