issued on:
July 7, 2025
author:
Ulrik Lehrskov-Schmidt
TLDR: If you don't think your product is worth it - your customers won't either.
Monday Price Point:
Sometimes the largest obstacle for a company to significantly increase prices is in the heads of the founders or executives.
They simply don't believe that their product is worth it.
"Well, it's just a simple application that does X. It's really nothing".
Or: "We can't charge that much! Our customers are [insert 'cheap'] !"
Customers can smell this like sharks smell blood.
If you don't believe in the value of your product: neither will they.
And you will fold when they ask for discounts.
And you will not raise prices. For years or decades.
This is particularly a problem for technical founders. They see the input (the work it took making the thing) and fail to value the output (the work the thing does for the customer).
This is fundamentally a self-worth issue caused by accepting a flawed price anchor : either one based on cost inputs, market ignorance etc.
Your self-worth as a business should be tied to the value you actually bring.
Anything you charge below value should feel like you are doing the market a favour.
Here is how you do it:
Shift your mental frame around what your product is worth.
Do back-of-napkin math on the economic value you bring to customers.
E.g. 4 hours saved per front line staff per month at $15/hour x 500 staff on 1000 customers = $360M of value per year.
This number is the value you bring to the economy.
Your gift to society.
Now : decide to keep some of this value.
The best attitude or mental frame I see is founders that fundamentally see any gap between your current revenue and the value number as an error.
As if the market is somehow unfairly 'ripping them off' or 'profiting off of the value they bring'.
Like that $360M is somehow theirs.
For better or worse: that mental frame usually pushes you to find ways to monetize better.
As promised: a point about pricing every Monday.
PS: It's a new thing for me to write these newsletters and the only way it grows is by word of mouth - so if you like it then please help to spread it by liking and commenting on the associated linkedin post.
