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Pricing hypotheses

Price is not an afterthought; it is part of the product. The way you charge determines whether you are selling time or building a business.

Anchor to value, not cost​

Charging "my hours × a rate" caps your income at your capacity and trains customers to see you as labour. Instead, anchor to the value the outcome creates: recovered revenue, avoided cost, time returned. If a workflow refills empty slots, its price relates to the value of a filled slot — not to how long the software took to build.

Separate the three revenue shapes​

  • Setup / onboarding — a one-off to get them live. Covers your integration effort and filters out non-serious buyers.
  • Recurring subscription or managed fee — the hinge that decouples income from your hours. This is what you are really building toward.
  • Usage or success components — optional, aligned to value (per location, per seat, per outcome). Keep it predictable; surprise bills destroy trust.

Price the buyer you are serving​

A two-chair salon and an enterprise platform team have different budgets, buying processes and expectations. The same underlying engine can be packaged as an affordable per-location fee for the former and a governed platform contract for the latter. See productization.

Test price like any other hypothesis​

  • Name a real number early in a sales conversation and watch the reaction.
  • Offer two or three tiers; where people land tells you what they value.
  • Raising price and losing no one means you were too cheap.

Write down your price hypothesis and what result would confirm or refute it, just as you would for the product itself.

Avoid the discount reflex​

Discounting to close a nervous first customer sets an anchor you will fight for years. Prefer a smaller scope at full price over the same scope at a discount.

Honesty​

Do not attach financial promises to a price. Value framing is a hypothesis to test with the customer, not a guaranteed return — see measuring economic value.