Pricing your first product

Pricing is where a lot of founders quietly lose their nerve. Everything else in the product is an act of confidence — this is worth building, people need this — and then it comes time to put a number on it and the confidence evaporates. So they price too low, or default to free, and spend the next year trying to climb out of a hole they dug on day one. Early pricing done well isn't about nailing the perfect number. It's about learning what your product is worth without anchoring yourself to zero.

Price is a signal, not just a transaction

A price does two jobs. It captures value, obviously — but it also signals value, and the second job is the one founders underrate. Price too low and people don't just pay less; they assume it's worth less, take it less seriously, and treat it as disposable. A serious price attracts serious users, and serious users give you far better signal about whether the thing actually works. Cheap or free attracts tourists, and tourists teach you very little.

This is why "we'll charge later, once we have users" is usually a trap. Free users aren't a discounted version of paying users — they're a different species, with different expectations and no skin in the game. What you learn from them rarely transfers.

You're pricing the value, not your costs

The instinct is to price from the bottom up: what does it cost me to deliver, plus a margin. For most software that math produces a number that's far too low, because your costs have almost nothing to do with the value the customer gets. The right anchor is the value on the customer's side — what the problem costs them today in money, time, or frustration, and what solving it is worth. You're not charging for your effort. You're charging for their outcome.

You won't know that number precisely at first, and that's fine. The point is to anchor high — to the value — and then discover where reality sits, rather than anchoring to your costs and leaving most of the value on the table forever.

Charge early, adjust openly

My bias for a first product is to charge real money sooner than feels comfortable, and to treat the specific number and model as things you're actively learning. Early on you have permission you'll never have again: you can talk to every customer, ask why they paid or didn't, and adjust. Raising prices later is hard and a little scary; starting with a real price and refining it is normal. Founders who start at zero rarely find their way to a healthy price, because they've trained their whole market — and themselves — to expect free.

Keep the model simple while you learn

There's a temptation to design an elaborate pricing model — tiers, usage bands, seats, add-ons — before you've sold anything. Resist it. In the beginning you don't understand your value metric well enough to structure all that, and complexity just hides the signal you're trying to read. Start with something a customer can understand in one breath. Get to a real price, real customers, and a clear reason they pay. The sophisticated model can come once you actually know what you're charging for.

Pricing is one of those decisions where a little outside perspective saves a lot of second-guessing. If you're staring at the number and losing your nerve, I'm happy to think it through with you.