Find the Profit Because the Best Investors Are Customers

Congratulations! You have built this awesome company. You have products and services, and now you want to price them. The pros discuss the constructs of cost-based pricing and value-based pricing: “Value-based pricing is the setting of a product or service’s price based on the benefits it provides to consumers. By contrast, cost-plus pricing is based on the amount of money it takes to produce the product”. Deciding the model to adopt for the optimal value creation, in your startup, is the next level as you fix the launch date.

You possibly have some marketing guys to assist. Marketing is a great profession. The bests in the field understand how to present their product offerings to customers to get them to open their wallets. Irrespective of the quality of the product or service, a very poor marketing campaign could be very disastrous. This field is full of psychology.

People, profitability is key…read a zen-master.

“You don’t give a poor man something for free and then the next day you want to come charging for it. He will insult you. He will tell you, you should have left me where I was before. So this idea that I can win market share by giving you something to use for free, then one day, I can monetize it, you had better be sure your unit economics is right because you may never be able to monetize it.  And that is why a lot of fintechs today will never become profitable,”

“Getting profitable is what you must love to do and what that basically means is that you must get your unit economics right from the onset.  If you miss that it’s better to do something small, become profitable with it, and begin to scale sustainably.” 

“The MBAs are important, they’re necessary but they’re not sufficient. What kills most businesses are the things you did not learn in school that you have to deal with, especially, if you went to school abroad because most of the examples or cases you did have no relevance to your local environment,”  

“Two years ago, I went around the whole world, talking to investors, and everyone told me they were not investing in Nigeria. A lot of my fintech partners did not know because they were not on that journey. But I knew two years before that money was not going to come. 

“A lot of companies have failed because they were dependent on raising money. They hoped to raise one fund after another fund. That works very well in Silicon Valley. But we are in the Tropical Savanah, you only have one chance. Don’t waste it. You may raise your funds once or not be able to raise the second one. But if you just raised money two years ago, you should have known that this money may be the last one you will get in the next five years. So how you use it is important,” – CEO of Interswitch, Mitchell Elegbe.

Find the profit because the best investors are customers.

Mechanics Of Startup Product Pricing

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