Playbook / Lessons / First customers: the offer, the price

Startups

Price follows the buyer's situation, not your cost

Godin argues that a price is set by the buyer's situation and what the thing is worth to them, not by what it cost the maker to produce. He says the price paid will always be less than the value created for the purchaser. His takeaways are to understand what your customers need and want, and to remember that skill alone does not guarantee people will pay.

“Price is based on the purchaser’s worldview and situation, not the producer’s.”— Seth Godin, Understanding pricing, Nov 2024

Do this

Write down this week who exactly would pay for your product and what it is worth to that buyer, then set the price from that rather than from your costs.

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