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I'm surprised this had to be said. Basic economics will tell you that the only way to determine price is what people will pay... Not what they say they'll pay

I'm surprised this had to be said. Basic economics will tell you that the only way to determine price is what people will pay... Not what they say they'll pay, or what they say others will pay, or what they say people should pay. Only what they will pay. And everyone's price point is different, of course... Some would never buy, others would spend far more than most people. It's all about finding that sweet spot.

arkitaip 15y ago
The meta insight seems to be that you should never trust what customers say, only what they do. Other areas where this applies is user testing ("No, I don't think it's that difficult to use.") and marketing ("This ad looks way better than that.").
- mootothemax 15y ago
  The meta insight seems to be that you should never trust what customers say, only what they do. "Never" is a strong word, but I think it's a good general rule to stand by.
- reinhardt 15y ago
  The meta insight seems to be that you should never trust what customers say, only what they do. Other areas where this applies is user testing ("No, I don't think it's that difficult to use.") and marketing ("This ad looks way better than that."). One more area: (most) female dating advice. "I want a sweet nice guy" vs "all my ex-es were jerks". Guess who she's attracted to.
mootothemax 15y ago
I'm surprised this had to be said It's great that you're naturally that level-headed, but I think when you have a crowd of people telling you X, it's easy to forget that they're not customers - let alone that customers will usually tell you that they want to pay less ;)
wpietri 15y ago
You shouldn't be very surprised. It's true that the only way to be sure of what people will pay is to see what they pay. But by the time you have an actual product to sell, you will have asked people for advice and feedback about 8 million times. It's very natural at that point to go for 8 million + 1 and say, "What would you pay for this?" Pricing is one of the few things in business that's traditionally amenable to gathering hard data. Which is why I'm so excited about the Lean Startup approach; there one tries to apply the same data-driven spirit to everything.
- lurker14 15y ago
  The traditional and very successful approach to getting past the brittleness of "What would you pay for this?" is to sell vaporware. It's how Micro-Soft (before the S was lowercase and the hyphen was dropped) and many others got started. You say to yourself: "I have a pretty good idea of how much work and expense it will take me to build this", then you go off and try to sell it as though it was already done or just getting polished for release. Once you have orders (or even better, cash advance!), you (privately) commit to either finish the product or cancel/refund orders if you fail^Whave a great learning experience. It's dishonest, but it works, and if you structure your offer fairly (don't induce reliance on the vaporware, only induce desire), it's not evil. Successful established authors do this before they write books. It's a standard technique in publishing. See also KickStarter.

arkitaip 15y ago

The meta insight seems to be that you should never trust what customers say, only what they do. Other areas where this applies is user testing ("No, I don't think it's that difficult to use.") and marketing ("This ad looks way better than that.").

mootothemax 15y ago
The meta insight seems to be that you should never trust what customers say, only what they do. "Never" is a strong word, but I think it's a good general rule to stand by.
reinhardt 15y ago
The meta insight seems to be that you should never trust what customers say, only what they do. Other areas where this applies is user testing ("No, I don't think it's that difficult to use.") and marketing ("This ad looks way better than that."). One more area: (most) female dating advice. "I want a sweet nice guy" vs "all my ex-es were jerks". Guess who she's attracted to.

mootothemax 15y ago

I'm surprised this had to be said It's great that you're naturally that level-headed, but I think when you have a crowd of people telling you X, it's easy to forget that they're not customers - let alone that customers will usually tell you that they want to pay less ;)

wpietri 15y ago

You shouldn't be very surprised. It's true that the only way to be sure of what people will pay is to see what they pay. But by the time you have an actual product to sell, you will have asked people for advice and feedback about 8 million times. It's very natural at that point to go for 8 million + 1 and say, "What would you pay for this?" Pricing is one of the few things in business that's traditionally amenable to gathering hard data. Which is why I'm so excited about the Lean Startup approach; there one tries to apply the same data-driven spirit to everything.

lurker14 15y ago
The traditional and very successful approach to getting past the brittleness of "What would you pay for this?" is to sell vaporware. It's how Micro-Soft (before the S was lowercase and the hyphen was dropped) and many others got started. You say to yourself: "I have a pretty good idea of how much work and expense it will take me to build this", then you go off and try to sell it as though it was already done or just getting polished for release. Once you have orders (or even better, cash advance!), you (privately) commit to either finish the product or cancel/refund orders if you fail^Whave a great learning experience. It's dishonest, but it works, and if you structure your offer fairly (don't induce reliance on the vaporware, only induce desire), it's not evil. Successful established authors do this before they write books. It's a standard technique in publishing. See also KickStarter.