Most founders pick a price by guessing, then feel nervous about it for months. Pricing is hard because there is no formula, but there is a sensible order of operations. Here is one.
Start with the problem, not your costs
Price against the value of the problem you solve, not against what it costs you to run the product. If your tool saves a team five hours a week, the question is what five hours of that team's time is worth, not what your hosting bill is. Costs set your floor. The problem sets your ceiling.
Pick a number you can say out loud
A good early price is one you can tell a customer without flinching. If you mumble it, it is wrong. Too low signals the product might not be serious. Too high means every sales conversation starts with an apology. Say the number to a few people in your target market and watch their faces.
Anchor with alternatives
Customers never evaluate your price alone. They compare it to the other ways of solving the problem: hiring someone, doing it manually, a competitor, or doing nothing. Know which alternative you replace and price so the comparison flatters you.
Charge from day one if you can
Free users are generous with signups and stingy with honesty. Paying customers tell you what actually matters because their money is on the line. Even a small price filters for people with the real problem and gives you revenue to learn from.
Raise prices on new customers first
You will underprice at the start. Almost everyone does. The fix is not a painful across the board increase. Raise the price for new customers, keep existing ones where they are, and see if signups slow. If they do not, you were leaving money on the table.
A quick checklist
- Do you know the most expensive alternative your customer uses today?
- Can you say your price out loud without apologizing?
- Is at least one person paying you, even a small amount?
- Have you tested a higher price on new customers in the last few months?
The takeaway
Pricing is not a decision you make once. It is a dial you keep adjusting as you learn what your product is worth to people. Start with a number you can defend, charge early, and revise without fear.
When you are ready to put your product in front of more founders, submit your startup on Maidensail, or browse the registry to see how others present their pricing. For help finding the words that carry your price, read our guide on writing a one-line product description.