
Charging for our product originally hurt but ultimately saved our startup - evilsimon
https://medium.com/initialized-capital/how-charging-for-our-product-originally-hurt-but-ultimately-saved-our-startup-391e69ae42ba
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avitzurel
> We didn’t want to teach ourselves how to find money-losing customers

This!!!

Coming from the travel business. I remember this vividly.

You acquire a customer that is not loyal to your product even for 3 seconds
for 1$ and you make 0.8$ out of that customer.

Building a customer acquisition strategy that will work in the long run and
will make you money is such a key realization.

Even if it takes you longer and seems like you are moving slower, you should
not be tempted.

At one point, we saw a 200% increase in users over the course of two weeks due
to some "growth hacks". Those ended up just costing money in server and
engineering costs. None of the customers actually stuck with the product for
the long run.

~~~
wpietri
100% agreed. Eventually, most companies come down to people being willing to
put money down in exchange for something they value. And then doing that again
and again over the course of the relationship.

So many entrepreneurs are really building _products_ , not _businesses_. They
want to be insulated by money while working on making their perfect thing. And
I get that. Building is fun. It's scary to put yourself and your product out
there. And it's hugely unpleasant to have that fail.

But until we try for real, we'll never truly know what works. The sooner and
more often we try for real, the more likely we are to find what works.

~~~
matt_the_bass
>So many entrepreneurs are really building products, not businesses.

This!

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cvsh
>Around 2012, we and a whole cohort of other startups — Simple, Plastc, Swyp,
Coin, Final, Stratos, Clinkle, and others — were getting card-issuing
companies off the ground.

Let's play a game I like to call "Supporting Character in Thor: Ragnarok, or
FinTech Startup?"

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paulie_a
Generally a client does not have any reason to use your product until they
have some skin in the game. They are more than happy to try a free product,
but probably will never actually utilize it. And the ones that are on the free
plan will be a pain point. If a client or customer is unwilling to spend any
money on your product/service there are two options: They are cheap and will
never be paying customers, or your sales people are bad at their jobs.

That is slightly hyperbolic, but in my personal experience dead on.

~~~
ghaff
Skin in the game doesn't _have_ to mean money. In an enterprise sales context,
for example, if a company is going to commit a lot of employee time to an eval
or workshop, that may be sufficient. You also presumably have sales reps who
can gauge how serious the prospect is. But, definitely, if all you're talking
about is a web signup, then there's no skin in the game.

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yeukhon
I think there is a sense of “if I pay, it probably has a value so said company
can charge a customer, and it is likely said company will not to fail so
soon.” Not that this is always true, but with a reasonable trial and active
customer support team, I think a starter plan is never a bad idea at all.
Making a paid plan also means the company has to work double harder now to
deliver a better product and a better customer experience, unlike IMO a free
tool has the “we will get there eventually, let’s test with free users first.”

~~~
ccallebs
I'm debating the merits of this right now. For the moment, I'm not charging
for my beta. I have received some good feedback so far, but people haven't
been as active using it as I would like.

I'm wondering whether it would be better to find a smaller number of people
willing to pay for the product and really tailor the experience to them.

~~~
mikeleeorg
I would argue yes, find a smaller number of paying customers and tailor the
experience to them. It's incredible difficult to get paying customers, and if
you can get some, then you can begin the journey of expanding your feature set
/ distribution channels / promotions to reach other customers.

It's kind of like the idea of focusing on fewer people who love you, vs lots
of people who just like you, where love = paying customers :)

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kaistinchcombe
Hi everyone!
[https://www.truelinkfinancial.com/careers](https://www.truelinkfinancial.com/careers)
:)

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juskrey
Hi, how are your "Personalized plans using sophisticated data analysis"
protected from extrinsic fraud and extreme drops in value?

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z3t4
Unless you control the market, you don't set the price, the market does.

~~~
gnode
You set your price, and if you do it wrong, you miss the market.

~~~
z3t4
So if I clap my hands, and the sun rises, I made the sun rise (sarcasm)

