The first personal project ever tried to sell was a community platform for founders. At the time, I had no idea how to price a product, so I offered lifetime deals for just $20—usually with a 50% discount added on due to an incomplete feature set. Even with this arbitrary (and extremely inexpensive) pricing model, I was terrified to hop on calls and pitch to people.
The point? I know how hard it can be to price your products.
Value-based pricing is now something I prioritize when coaching other founders. Why? Because it allows you to match your pricing with the value of what you offer. Plus, the logic is very intuitive—here’s how it works:
- Look at the problem your product is solving.
- Calculate how much your ICP is currently paying to solve this problem another way.
- Set a starting price that’s 10-50% of the current cost.
- Increase or decrease as needed based on feedback.
This approach is simple, but can dramatically increase your revenue depending on how much you’re currently undervaluing your product (and yes, it’s almost always under
To illustrate, I like to give the example of a biotech startup I worked with. They charged $100,000+ for an annual license, but in the process of working out a GTM strategy, we noticed something was off. The companies they were targeting were spending $6 to $12 million annually to solve the same problem without their product!
Even with a $100,000+/year price tag, they were still undervaluing their product by at least 6X.
For more insights on pricing strategies, explore our detailed Enterprise SaaS Pricing Guide