Better pricing, revenue & product strategy
for SaaS, AI/ML, startups, legaltech, marketplaces, edtech, apps, martech, browser extensions & technology companies
What is pricing & product strategy?
A rigorous and structured approach to addressing these questions:
How should we monetise our products?
How do we set & optimise pricing to affect the KPIs which matter to us most?
How do we build & iterate on products which our target market wants to use and pay for?
Real examples of my projects (anonymised)
Real examples of problems companies have asked me to work on (anonymised)
“We’re launching this new product. How should we price it?”
“We’re thinking about acquiring a company. Realistically, how much incremental revenue will it deliver post-acquisition?”
“A few of our customers are responsible for a disproportionate percentage of our revenue. How are those customers different from the others, and how do we grow average revenue from the ‘long tail’”?
“How can we calculate & track LTV if we’re unable to accurately attribute revenue on a per-user basis?”
“We want to make our internal software tool available to third parties as a SaaS proposition. How should we turn it into a necessary proposition for our target customers, and how should it be priced?”
“Our proposition has failed to find product/market fit. Why has this happened, and what should we do about it?”
“We’ve got a range of products & services, but need to figure out how to prioritise them so as to accomplish specific objectives and improve these KPIs”
“Our customers vary considerably in their ability to pay. How do we amend our pricing and value proposition to deal with this?”
“How do we turn an existing ad-hoc de-centralised multi-sided marketplace into one which runs through our SaaS?”
“We’ve identified several opportunities adjacent to our core proposition. These could expand our addressable market and drive new revenue streams, but we’re not sure which — if any — we should pursue”
“We’ve got users, but we’re not monetising them effectively. What should we do now?”
“We know we’ve messed up our pricing. How do we fix it?”
“How do we transition from a perpetual license model to annually recurring revenue SaaS, and how can we further monetise the customers who already purchased perpetual licenses?”
“We’ve an opportunity to enter the Chinese market. How much should we change our product roadmap to do so?”
“Our new customers spend a long time onboarding, but too many of them only use our proposition once or twice, and then never come back. Why are we losing those customers, and what should we change in our pricing or our product to improve their retention?”
“How should we ‘productise & package’ this combination of tools, content & training into a value proposition which customers want to use and pay for?”
“We’re trying to do too many things, but aren’t sure how & what to cut”
“How should we structure & price the paywall on our content while we also try to boost engagement from non-paying customers?”
“How do we calculate churn if we have no visibility on when our product is uninstalled?”
My public writing on pricing & product strategy
Just because some companies act in ways which appear — and often are — wasteful, perverse and value-destructive, that doesn’t mean all their employees are blind to the inefficiencies. Ironically, at the heart of effective procurement, are decision makers’ profound understanding of the dysfunction inside their own organisation. It is the dysfunction that will prevent them from realising the full benefits of whatever they’re buying; but awareness of the dysfunction which gives them a truer understanding of the benefits.
The old proverb — about leading a horse to water — has a corollary: the horse won’t thank the person who showed them the pond.
This is a problem for companies who provide SaaS & software services which give customers AI-derived insights. If customers don’t act on those insights, then how much value will they place on the source of those insights? How long will it take them to ask why they’re paying so much?
A B2B founder recently asked how transparent he should be about pricing with early beta users who would initially enjoy free access to his company's proposition.
Other than always trying to avoid nasty surprises, there is no hard-and-fast answer because it will depend on what you’re selling and who you’re selling to. But there are some key points to keep in mind.
When users and decision-makers lack the usual incentives and motivation to hit targets or meet objectives, it can be hard to sell & deploy a product which enables them to do their jobs better.
This post describes why and where this happens, and what B2B SaaS & services vendors can do about it.
Internal startups tend to be drip-fed their funding by the mothership. This reduces the CEO’s agency to operate, has undesirable unintended consequences, and ultimately increases the probability of failure.
Employees in innovation groups, intrapreneur programs or internal startups are vulnerable to the fact that most other employees (i.e. those with no involvement in the internal startup) will perceive these projects quite differently from their main stakeholders — if they perceive them at all.
These perceptions are important because of the role they can play in determining the internal startup’s success.
In this post, I’ll define six common responses.
Every marketplace has at least two sides, but it’s not always obvious which side is really paying the fees. The key concept is the burden of the fee does not necessarily fall where the fee is collected.
So, understanding fee incidence is important because, as the marketplace operator, it can affect your approach to pricing, and impact the fundamental operations of your marketplace.
Why does an internal startup exist? Why would a large company go to the bother & expense of creating an internal startup? There are good answers to those questions. But, this post is about what happens when the answer isn’t clear, or it changes radically depending on who and when you ask.
Internal startups often suffer contractual, practical, cultural and emotional ambiguity regarding which company the founding team and employees actually work for. This has so many apparently small details, which then ripple out to a cumulatively big impact.
I’ve seen enough underperforming companies and products that it’s hard to avoid identifying common anti-patterns. But internal startups and corporate innovation groups are a special category. They face structural and organisational challenges — common to corporate innovation — which can be exceptionally difficult to avoid or overcome. First up: how one of the most powerful benefits a corporate could bestow on an internal startup can actually turn into a huge problem.
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