I was in Colorado most of last week to meet the TechStars entrepreneurs and see friends. And, of course, to participate in the second annual ping-pong tournament (see amusing logo here). Sometime between ping-pong matches, Andrew Hyde jumped into a meeting Tom Higley and I were having about entrepreneurship and grabbed five minutes of footage. It’s below. We talk about co-founders, coming up with ideas, and evaluating customer feedback. I’m wearing a Ben & Jerry’s t-shirt and have no shoes or socks on, if that gives you a sense of the casual nature of the conversation!
I developed a new product that has both HW and SW aspects to it. It is extremely useful and you have never seen anything like it. A patent was applied for, and I spent a year and a half working all the bugs out of it.
But, right now I am getting tangled up in pricing. I read what you say about pricing according to the value customers place on a product, and not the costs… fine. I also read elsewhere that almost always, entrepreneurs price new products too low. I don’t want to make this mistake, either. Unfortunately, all these things have become sound bites for me.
I guess the essential question is, then, how do I determine what value the customer will place on the new product? I first imagined a customer would examine the product and immediately compare it known alternatives. But that’s the rub. I don’t think that’s it at all! I only do this with commodity items. Not this.
Thanks for allowing me to post.
I cannot find any books regarding pricing a new product that represents a unique proposition. It won’t help to just ask friends. I need more than that and hoped you would have some advice. I can analyze it objectively, but that doesn’t help. I can’t just shoot high, either. Thanks again.
S: You have to test different price points and see what the market response is. You’ll inevitably under or overprice the product initially until you find the optimal point. But the best way to find out the right price is to just price it at some level, push it out to the market, and evaluate the customer response.
dy·ad·ic (d-dk)
adj.
1. Twofold.
2. Of or relating to a dyad.
n. Mathematics
The sum of a finite number of dyads.
The American Heritage® Dictionary of the English Language, Fourth Edition copyright ©2000 by Houghton Mifflin Company. Updated in 2003. Published by Houghton Mifflin Company. All rights reserved.
Speaking of Colorado, your buddy Jared Polis won the primary:
http://www.rockymountainnews.com/news/2008/aug/12/colorado-primary-elections-results/
Prevetik vsem kto ne spit
Ja tuta nakladu a vi uberite pliz