A special thank you to Aakash Gupta for collaborating on this piece, and first issuing it on his Substack

Your Pricing Problem is a Positioning Problem

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2024-07-09 18:00:07

A special thank you to Aakash Gupta for collaborating on this piece, and first issuing it on his Substack "Product Growth". An additional thank you to Lenny, Elena, Alex, David, Patrick, Jason & Bobby.

For months now, at June, we have been doing some intense positioning and brand explorations. I’ve been trying to reconcile everything that I have learned in the last 15+ years about building, positioning and pricing software on-line with the 2024’s awakening realization that the tech industry has well past a maturity point and it just looks like most other sectors.

Some instincts led me to focus on one of the most debated dichotomies in startupland that I think captures well the dialectic at play between today’s and yesterday’s practices and approaches around product building. I think my instincts were right and that idea is the pricing-positioning relationship.

Every startup founder wrestles at some point with the idea of pricing. And if you’ve been working in this industry for the last decade or so, you’ve probably already read hundreds (if not thousands) of things on the topic. The conundrum is a classic, not just for the newcomers who are busy building whatever the next generation of consumers and businesses require (AI powered software or hardware, etc) but also for many of the early practitioners who have been down in the trenches for years and still have plenty of questions and doubts. In 2024 I still hear and read questions like “Should I go with a freemium model or not? When does it or doesn’t work?” “Free trial or freemium, what does work best here?” or also “I built XYZ product, how should I price it? Is X-price too high or is it too low? Maybe, is it too average?”