Thread 
1/ Pricing is a subject that tends to fly under the radar for most startups until a crisis hits
That being said, it's a critically important factor in becoming profitable for any business
Here are some tips on effective pricing from some of the best:

1/ Pricing is a subject that tends to fly under the radar for most startups until a crisis hits
That being said, it's a critically important factor in becoming profitable for any business
Here are some tips on effective pricing from some of the best:
2/ Price is the most leveraged driver of profits
@HermannSimon: "Every business has only 3 profit drivers: price, volume and cost. Prices get the least attention, but have the greatest impact"
@destraynor: "Nothing impacts your bottom line better than improving your pricing"
@HermannSimon: "Every business has only 3 profit drivers: price, volume and cost. Prices get the least attention, but have the greatest impact"
@destraynor: "Nothing impacts your bottom line better than improving your pricing"
3/ Your prices are probably too low
@tyler_gaffney: "Even the most confident teams price too low. Very rarely do I encounter early-stage founders who've priced too high"
@pmarca: "The #1 theme w/ our companies when they're really struggling is that they're not charging enough"
@tyler_gaffney: "Even the most confident teams price too low. Very rarely do I encounter early-stage founders who've priced too high"
@pmarca: "The #1 theme w/ our companies when they're really struggling is that they're not charging enough"
4/ Successful companies rely on innovative products & premium price points
@HermannSimon: "After 40 yrs, I'm convinced only very few companies will achieve long-term success w/ a low-price strategy"
@meraynor: "Very rarely is cost leadership a driver of superior profitability"
@HermannSimon: "After 40 yrs, I'm convinced only very few companies will achieve long-term success w/ a low-price strategy"
@meraynor: "Very rarely is cost leadership a driver of superior profitability"
5/ Start thinking about price early
@MadhavanSF: "The root of all innovation evil is a failure to put the customers' willingness to pay at the core of product design"
@ttunguz: "Decide which pricing strategy to pursue & align sales/marketing/product efforts along those lines"
@MadhavanSF: "The root of all innovation evil is a failure to put the customers' willingness to pay at the core of product design"
@ttunguz: "Decide which pricing strategy to pursue & align sales/marketing/product efforts along those lines"
6/ Your prices should change as your company grows
@Patticus: "Adjusting prices on a regular basis trains customers to understand that the value is going to be changing as the product improves"
@plibin: "If you picked your price once and never changed it, it's probably wrong"
@Patticus: "Adjusting prices on a regular basis trains customers to understand that the value is going to be changing as the product improves"
@plibin: "If you picked your price once and never changed it, it's probably wrong"
7/ To maximize profits, optimize pricing. To optimize pricing, understand your customers' willingness to pay.
@fredwilson: "You must know the price elasticity of your product. This allows you to optimize price/margins/profitability which, after all, is the goal of a business"
@fredwilson: "You must know the price elasticity of your product. This allows you to optimize price/margins/profitability which, after all, is the goal of a business"
8/ The fundamental driver of willingness to pay is perceived value
@rorysutherland: "All value is subjective"
@mcgd: "What matters is not the distance b/w the cost to produce something and its price, but the difference b/w the price and the perceived value to the end user"
@rorysutherland: "All value is subjective"
@mcgd: "What matters is not the distance b/w the cost to produce something and its price, but the difference b/w the price and the perceived value to the end user"
9/ Value Created + Value Communicated = Perceived Value
@peterthiel: "Outside economic theory, every business is successful exactly to the extent that it does something others cannot"
@HermannSimon: "Value alone does you little good unless you can communicate it successfully"
@peterthiel: "Outside economic theory, every business is successful exactly to the extent that it does something others cannot"
@HermannSimon: "Value alone does you little good unless you can communicate it successfully"
10/ Real buying behavior will always trump customer surveys
@jasonfried: "The only answers that matter are dollars spent"
@MadhavanSF: "If you want to transition from hoping your product will be successful to knowing your product will be successful, make price your core focus"
@jasonfried: "The only answers that matter are dollars spent"
@MadhavanSF: "If you want to transition from hoping your product will be successful to knowing your product will be successful, make price your core focus"
11/ An inability to raise prices is indicative of a weak business
@WarrenBuffett: "The single most important decision in evaluating a business is pricing power. If you have to have a prayer session before raising the price 10%, you've got a terrible business"
@WarrenBuffett: "The single most important decision in evaluating a business is pricing power. If you have to have a prayer session before raising the price 10%, you've got a terrible business"
12/ Here are the five best resources I could find on pricing for startups:
1). https://tomtunguz.com/pricing-summary/
2). https://www.sequoiacap.com/article/pricing-your-product/
3). https://firstround.com/review/the-price-is-right-essential-tips-for-nailing-your-pricing-strategy/
4). https://www.heavybit.com/library/video/harrison-metals-michael-dearing-on-pricing/
5). https://www.amazon.com/Confessions-Pricing-Man-Affects-Everything/dp/3319203991
1). https://tomtunguz.com/pricing-summary/
2). https://www.sequoiacap.com/article/pricing-your-product/
3). https://firstround.com/review/the-price-is-right-essential-tips-for-nailing-your-pricing-strategy/
4). https://www.heavybit.com/library/video/harrison-metals-michael-dearing-on-pricing/
5). https://www.amazon.com/Confessions-Pricing-Man-Affects-Everything/dp/3319203991
13/ For those looking to do a deeper dive on pricing:
https://medium.com/@aleetyson/12-how-to-price-415e038e5720
https://medium.com/@aleetyson/library-of-pricing-resources-63263f48d079
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https://medium.com/@aleetyson/12-how-to-price-415e038e5720
https://medium.com/@aleetyson/library-of-pricing-resources-63263f48d079
End