The Number
The Living Brainstorm · what they'll pay, found before the build decides for you
Money
The standard order is build it, love it, then work out what to charge and hope. The inversion is to find out what people will pay for which outcomes, then design the product that fits the number. That isn't cynicism about the product. It's refusing to spend a year discovering nobody was ever going to pay.
Dependency: nothing on this page works on strangers who don't have the problem. Run The Last Time first. A willingness-to-pay conversation with the wrong person produces a number that describes nobody, and worse, it produces confidence.
Adapted from Monetizing Innovation by Madhavan Ramanujam and Georg Tacke, credited as inspiration. The Yardstick is adapted from Utpal Dholakia's treatment of reference prices in How to Price Effectively, adopted selectively. Vocabulary is Robert's. Nothing reproduced from either source.
01
The four ways it goes wrong
Hold any idea against these. They're diagnostic rather than aspirational; you can usually feel which one you're heading toward, and the feeling arrives long before the evidence does.
Overbuilt
Packed with features, most of which nobody values enough to pay for. You gave a lot and got little.
The tell the roadmap is long and nobody can say which item closes a sale.
Underpriced
Genuinely good, and you asked for too little. You got exactly what you asked for.
The tell it looks like success. Units move, reviews are warm, margin never arrives.
Overlooked
You're sitting on something valuable and haven't noticed. Usually a byproduct, a dataset, or a courtesy.
The tell customers keep asking for the thing you give away without thinking.
Unwanted
Nobody wants it at any price.
The tell there isn't one, which is exactly why the conversation happens early.
Four modes
Diagnostic, not aspirational
Overbuilt is the most common. Underpriced is the hardest to notice.
Every unused feature cost money to build and now costs money to keep alive.
Yours: better to find Unwanted in week two than month fourteen. That's the entire argument for having the conversation early.
02
The pay conversation
Not a survey. A conversation, and it should feel like the same one you were already having, because it is. You're not fishing for a price; you're after the range and the reasoning underneath it, because the reasoning is what tells you what to build.
AbsurdAt what price would this be so expensive it's not worth discussing?
JustifiableAt what price is it expensive, but you'd still make the case internally?
ObviousAt what price is it an easy yes without asking anyone?
→ Then feature by feature: what would you pay to have this, and what would you want off the price to lose it?
→ Weight what they've actually bought over what they say they'd pay. Every time.
The conversation
Range, then reasoning
Describe an outcome, not a feature list. Let them price the outcome.
The feature-by-feature pass is the point of doing this early: it sorts the build list by revenue rather than by enthusiasm.
Yours: direct price questions make people uncomfortable and slightly dishonest. Past purchases outrank stated intentions.
03
The Yardstick
Nobody evaluates a price in isolation. They compare it to something, silently, and that comparison decides whether your number feels fair, regardless of what it cost you to make or what it's worth to them. So find out what they're measuring you against.
Same product. Same £400 a month.
Against the £39 tool they're using nowreads extortionate
Against the nearest competitor at £350reads expensive
Against a spreadsheet and their own Friday afternoonsreads reasonable
Against two days a month of an analyst's salaryreads obvious
The number never moved. The comparison did.
The Yardstick
More moveable than the price
What they compare you to decides whether your number feels fair.
Usually one of: what they pay now, the salary of whoever does it by hand, a competitor, or free plus their own time.
Yours: this is a positioning decision, and it belongs in the message rather than the price. Fix the comparison before you touch the number.
04
Pullers, Padding, Poison
Sort every feature before you configure or bundle anything. The third category is the one that catches people, because nobody ever complains about the feature that quietly made them not buy.
Pullers
People pay for these and choose you because of them. Few in number.
Build first. Price visibly. Never give them away in the cheap tier.
Padding
Nice, unobjectionable, nobody switches for them.
Fine in a bundle, worthless as a headline. Padding in volume is what Overbuilt is made of.
Poison
Actively reduces willingness to pay for some segment. Complexity that scares the simple buyer; an integration that whispers "this is for enterprise."
Invisible until tested. Cut it, or hide it behind a tier.
Segment before you configure. One product built for the average of two segments usually satisfies neither.
Feature sort
Three piles, before bundling
Pullers earn the sale. Padding fills. Poison quietly costs you buyers.
Decide who you're losing on purpose. Refusing to choose is choosing badly.
Yours: poison never shows up in feedback, because the people it repelled never got far enough to give any.
05
How you charge
Often worth more than what you charge. The metric you charge on should track the value the customer gets, so their bill rises when their benefit rises and neither party feels robbed.
| Ask | Why it decides things |
|---|
| Would they accept it? | A model customers find alien costs more to sell than it earns |
| Does it fit the stage you're at? | Usage-based needs volume; subscription needs retention you can prove |
| Does it survive what's obviously coming? | Per-seat pricing ages badly when the work stops being done by seats |
| Can you actually bill it? | This one kills more clever models than the other three combined |
The model
Charge on what they get
Per seat, per use, per outcome, subscription, tiered, free step, one-off.
If the bill rises when their benefit rises, nobody feels robbed on renewal day.
Implementation is the constraint people discover last and regret most.
06
Hold the line
Set the price from value, not from cost-plus and not from whatever the competitor charges. Then hold it through the part where holding it is uncomfortable.
1 Early sales are slow. The reflex is to discount.
2 Discounting in the first weeks teaches the market what you're worth, permanently, on the least information you will ever have.
3 Most early resistance is a value-communication problem, not a price problem.
4 Check the Yardstick first. Fix the message. Change the price only if the message was already right.
A price war is the one contest where the winning move is not to enter.
Price integrity
Fix the message first
The first weeks set the anchor, and the anchor is very hard to move upward.
Value-based, not cost-plus and not competitor-matched.
Yours: discounting early is a decision made with the least information you'll ever have, and it's the one you're most stuck with.