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Some founders fear charging their users for their product early on. I think it happens out of fear that it's premature & worry it might demotivate them. But I think it's much worse to toil on the wrong thing & waste precious minutes of your life. Use Venmo/PayPal & test!
Providing a free product isn't sufficient to test the value of what you're building. People will lie to you & it is hard to estimate the importance of a problem even when you talk to users. So, let money talk.
Early on with Mixpanel, I charged our first customers using PayPal. I didn't even have a UI. I'd just ran SQL queries for customers & messaged them interesting things I learned about their data. Then, once I had a UI, I charged more! That's when I knew it was valuable to someone.
Don't overthink the price. Start small, then keep increasing it until it's pissing customers off. If it's a big customer, pick a big number & see what happens. Long sale cycles are grueling early on so avoid them to get lots of customer feedback/data. Just make money if you can!
If startups were plants, instead of water they need traction, customer feedback, and product progress & momentum to grow. Nothing motivated me more than knowing people gave a shit about what I was building so much that they actually *paid* for it. Highly recommend!
If your market is big & is greater than 500 customers, don't sweat a company getting a great low-priced deal early on. You can always optimize later. I assure you, 6000+ paying customers later, I never looked back & regretted giving someone the product for $25/mo at first.
Last but not least: embrace the possibility people don't value your product enough to pay. Don't be scared, be curious. Better to find out now than in 6 mo. An open mind may lead you to a quarter pivot to a higher growth rate with an even better/more valuable product.
One clarifying point: this doesn’t mean don’t do freemium. Maybe it’s great for you. It was extremely important for us. But, staying fully free too long is to your detriment. Revenue has a lot positive motivators: (1) easier to hire, (2) lower burn, (3) simpler prioritization.
This was our very first pricing plan that was about "right" & lasted for 6+ years-was in our demo day slides during YC. Eventually, we did charge more.
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