4 ms·
There is a valuation issue here - if you have # of customers x, price your product at y and make revenue z=xy, your valuation in future seed rounds will somewha
by salman89 14y ago
There is a valuation issue here - if you have # of customers x, price your product at y and make revenue z=xy, your valuation in future seed rounds will somewhat become based on revenue z. If revenue z is not pivotal to your runway, you might be better off pitching to VCs that your revenue can be z'=xy', where y' is your real value to customers. If y and y' differ by a significant factor (which the OP seems to be advocating), you can make a significant negative impact on your valuation as a company.
I don't see that charging customers a fraction of what they would pay in the future provides the benefits the article says: "It meets two pretty crucial components of a proper early stage startup: talk to users and write code." You can talk to free users and you will still be writing code.
"The minor revenue is not the prize. The fact that someone will pay you at all for some promised product is the prize." If you are providing real value for your beta customers, it will not be hard to determine that they would pay in the future.