The Hard-To-Guess Reason Starting With A Higher Price Loses You Money

Start lower than you think. And this is not popular advice. It's certainly not common. And here's why. So let's assume right now that mathematically and statistically, the odds of you getting the exact right price, like let's say the universe came down, some know-all oracle could tell you like, this is what the price should be. The odds of you actually conjuring up that price in your head are zero. You can err on charging too little and you can err on charging too much. The problem with charging too much is that in the event that as you kind of evolve the company, as you get customers on, adjusting the price downward is near impossible. Because what ends up happening is like, okay, well, we were charging, let's say $1,000 a month and we have 20 customers, 50 customers. And then we realized like, oh, well, that's actually higher than it probably should have been. If you reduce the price, now you have this revenue impact because now going from $1,000 to $500 means you're going to go back to your existing customers. Otherwise they'll be pissed off. Like, why are they paying twice as much as new customers coming in? The other direction is actually relatively easy. So let's say you started at $100 a month. You can go in a year later and say, oh, we've got 1,000 customers at $100 a month and say, now we're gonna charge $200. And what you do is you say, oh, all the existing customers, we're gonna continue to charge you $100 a month, but if you're new, we're gonna charge you $200 a month. And no one's gonna complain about that. Existing customers are happy. New customers are like, okay, this is the price. And it works out. And you, you could do that repeatedly until you find some sort of steady state on pricing where you feel comfortable that It's roughly right. We'll roughly approximate value.