Alex Rampell wrote and sold his first software when he was 11, but he knew nothing about what to charge customers. Checks just showed up at his house for licenses to his products, which he started selling for $5. As luck would have it, at the same time he hit 1,000+ software license sales a week, he was also taking high school microeconomics, learning about the elasticity of demand. What he learned in the classroom by day, he immediately applied to his business at night, ultimately raising the price of his product to $18.95. For many startups, it seems mission critical to pinpoint the perfect price as soon as possible. But according to Rampell, now CEO of alternative payment startup TrialPay, the real lesson is you can’t, and you shouldn’t. One price means you’re leaving a lot of money on the table. At First Round’s recent CEO Summit, he explained exactly why this is, and how to escape the pricing trap.
Good article about pricing strategy by @FirstRound
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