"What should we charge?" is one of the most common questions I get from early-stage founders. It's also the wrong question.
The right question is: what kind of business do we want to be?
Pricing shapes everything
Your price determines:
- Who your customers are. A £50/month tool attracts different buyers than a £5,000/month one. The acquisition channels, the sales motion, the support model — all different.
- How you sell. Self-serve? Inside sales? Enterprise field sales? Pricing dictates this almost as much as product.
- What you can build. Higher prices fund deeper engineering. Lower prices demand mass scale. These lead to genuinely different products.
- Who you compete with. A B2B tool at £200/month competes with one set of products. The same tool at £2,000/month competes with a completely different set.
The two failure modes
Underpricing. The most common founder mistake. Driven by fear of losing deals and lack of conviction in value. Result: you attract price-sensitive customers, can't fund the depth of product they need, and get stuck.
Overpricing without conviction. Less common but worse. You charge enterprise prices for a small-business product, hoping the price signals quality. It doesn't. It signals desperation, and sophisticated buyers see through it.
What works
Pick a customer segment deliberately. Understand the value you create for that segment. Price accordingly — usually higher than you're comfortable with, because the value is almost always more than the founder thinks.
Then defend the price. Discounting destroys trust faster than any other thing you can do. If the price needs to come down, change the package, change the segment, or rethink the product. Don't just discount.
And revisit pricing every six months. The right price at launch is rarely the right price two years in. As you learn more about value, you should be charging more.