Product

How to Charge What Your Product is Worth

Here’s why you may be underpricing your product and four concepts that can help you set prices for new products.

Photo by Ricardo Annandale on Unsplash

When I started my entrepreneurship journey 10 years ago, I wanted to give my product away for free.

At the time, taking payments online was difficult. VCs cared more about capturing user’s eyeballs than their money; business plans consisted of growing a free product and monetizing it later — usually by hiring a chief monetization officer, building more features, or plastering its website with adverts.

A lot has changed since then. Payments are easier, making money with adverts is much harder, and VCs aren’t funding eyeballs anymore. Yet I still felt a certain resistance to charging for my latest online service.

Why was this?

Self-protection

Intellectually, I understood that people don’t value free products as much as paid ones, and that charging for my product would force the issue: is this product valuable or not?

But my resistance wasn’t intellectual, it was emotional. What if the answer was, ‘No, this isn’t valuable enough to pay for.’ It was safer to defer this possibility, giving me…