Y Combinator Startup Podcast How To Price For B2B with Tom Blomfield | Startup School
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Nov 16, 2024 In this insightful talk, Tom Blomfield, a YC Group Partner with a wealth of experience in guiding startups, reveals the secrets of pricing for B2B products. He tackles the perennial question of how much founders should charge and discusses effective pricing strategies tailored for software. Discover the importance of value delivery, competitive positioning, and avoiding price wars. Tom's practical tips will help you set a price that resonates with customers and drives sales.
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Value-Based Pricing
- Determine the value your product delivers to the customer, involving them in the process.
- Price at 25-50% of this value, ensuring a good deal for both parties.
Cost Consideration
- Consider your costs after determining value-based pricing.
- Ensure costs are significantly lower than your revenue, targeting 80-90% software margins.
Competition Strategy
- Avoid price wars with competitors; differentiate your product instead.
- Focus on unique features or niches to stand out, rather than competing solely on price.