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Patio11 is practically synonymous with the phrase "charge more" in the startup world, however, his catch phrase cannot be more misleading. For most prospective

Patio11 is practically synonymous with the phrase "charge more" in the startup world, however, his catch phrase cannot be more misleading. For most prospective customers, you should charge less. For a select few customers, you should charge way more. Upping the ante indiscriminately only continues to make the world even more unequal and inaccessible for the people who need your products the most.

patio11 6y ago
Software has two natural prices: free* and expensive. AppAmaGooBookSoft can take care of the free*, and they will invest billions upon billions of dollars more into that than you will. Your market opportunity, and your job, is to write the expensive stuff. (The asterisk reflects that they give the software away for free because it is a complementary good to the business where they make most of their money.)
graeme 6y ago
I think you’re disagreeing with him. It’s incorrect to describe his advice as misleading in that case. The idea of charge more is that it brings more revenue into the business and allows it to continue succeeding and producing value for customers. Charging more charges for that value. The advice is also mostly for b2b or b to professional, so if the product truly brings value to the customer they actually can afford it. Undercharging kills businesses and does no one any favours in the long run.
Axsuul 6y ago
A business is always evolving. A business charges more initially so they can become default-alive. A business can then charge less and move downmarket with more resources. The greatest loss is a business going poof because they didn't charge enough in the beginning.
threeseed 6y ago
Charging less has the disadvantage of bringing in customers who statistically are more likely to need customer support. Also no business should be run on a foundation of altruism.
PragmaticPulp 6y ago
"Charge more" can be misleading if you assume it means to raise prices and keep everything else the same. In practice, the idea behind "charge more" is to move more toward the expensive end of the demand curve. You're better off building a $1000/month product for 1000 customers than a $100/month product for 10,000 customers, and you're even better off building a $10,000/month product for just 100 customers. The cheap, highly-scalable products become a race to the bottom where competitors one-up each other with lower and lower prices until they arrive at basically free. Unfortunately, I've watched most people interpret "charge more" to mean that they should raise their prices and keep everything else the same, which only works if your product was underpriced to begin with. Many startups are underpriced, so it works for a while, but eventually people get SaaS subscription fatigue and start trimming away the high cost / low value services. The "charge more" services that don't also offer more value are the first to go.
notdonspaulding 6y ago
> Upping the ante indiscriminately only continues to make the > world even more unequal and inaccessible for the people who > need your products the most. Ah, "From each according to his ability, to each according to his need?"

patio11 6y ago

Software has two natural prices: free* and expensive. AppAmaGooBookSoft can take care of the free*, and they will invest billions upon billions of dollars more into that than you will. Your market opportunity, and your job, is to write the expensive stuff. (The asterisk reflects that they give the software away for free because it is a complementary good to the business where they make most of their money.)

graeme 6y ago

I think you’re disagreeing with him. It’s incorrect to describe his advice as misleading in that case. The idea of charge more is that it brings more revenue into the business and allows it to continue succeeding and producing value for customers. Charging more charges for that value. The advice is also mostly for b2b or b to professional, so if the product truly brings value to the customer they actually can afford it. Undercharging kills businesses and does no one any favours in the long run.

Axsuul 6y ago

A business is always evolving. A business charges more initially so they can become default-alive. A business can then charge less and move downmarket with more resources. The greatest loss is a business going poof because they didn't charge enough in the beginning.

threeseed 6y ago

Charging less has the disadvantage of bringing in customers who statistically are more likely to need customer support. Also no business should be run on a foundation of altruism.

PragmaticPulp 6y ago

"Charge more" can be misleading if you assume it means to raise prices and keep everything else the same. In practice, the idea behind "charge more" is to move more toward the expensive end of the demand curve. You're better off building a $1000/month product for 1000 customers than a $100/month product for 10,000 customers, and you're even better off building a $10,000/month product for just 100 customers. The cheap, highly-scalable products become a race to the bottom where competitors one-up each other with lower and lower prices until they arrive at basically free. Unfortunately, I've watched most people interpret "charge more" to mean that they should raise their prices and keep everything else the same, which only works if your product was underpriced to begin with. Many startups are underpriced, so it works for a while, but eventually people get SaaS subscription fatigue and start trimming away the high cost / low value services. The "charge more" services that don't also offer more value are the first to go.

notdonspaulding 6y ago

> Upping the ante indiscriminately only continues to make the > world even more unequal and inaccessible for the people who > need your products the most. Ah, "From each according to his ability, to each according to his need?"