Y Combinator Startup Podcast

#148 - Startup School Week 7 Recap - Kevin Hale on Conversion Rates and Pricing

Oct 16, 2019

Kevin Hale, a Partner at Y Combinator and co-founder of Wufoo, shares his expertise on conversion rates and startup pricing. He dives into the importance of understanding user behavior and optimizing the ‘magic moment’ in customer interactions. Hale breaks down common pricing mistakes startups make, like undervaluing their products and focusing on the wrong customers. He also introduces innovative pricing strategies that can yield significant returns. This engaging discussion is packed with practical insights for aspiring entrepreneurs.

30:54

Creator website

Episode guests

Kevin Hale

Highlights

AI Chapters

Episode notes

Value Over Price: The Key to Successful Price Optimization

01:08

The Knowledge Spectrum Approach to Solving User Interface Problems

01:16

The Pricing Thermometer

01:23

Mastering Conversion Rates and Pricing Strategies for Startups

31min

We've cut down the seventh week of lectures to be even shorter and combined them into one podcast.

Kevin Hale gave both lectures this week. Kevin’s a partner at YC and cofounded Wufoo. His first lecture is on how to improve conversion rates and his second lecture is on pricing for startups.

Y Combinator invests a small amount of money ($150k) in a large number of startups (recently 200), twice a year.

Learn more about YC and apply for funding here: https://www.ycombinator.com/apply/

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Topics

00:00 - Intro

00:27 - Kevin Hale - How to Improve Conversion Rates

1:02 - Why we care about conversion rates

2:02 - Shareware conversion rate is .5%

2:22 - Casual download games is 2%

2:32 - Freemium SaaS range from 1.5 to 5%

3:57 - Knowledge spectrum

5:52 - The one button interface

6:37 - What is the call to action? And the magic moment.

8:02 - What is it?

8:38 - Is it right for me?

9:02 - Is it legit?

9:22 - Who else is using it?

9:52 - How much? What's the catch?

10:39 - Where can I get help?

11:30 - Kevin Hale - Startup Pricing 101

13:15 - Monetization gives you the biggest bang for your buck

14:35 - Price thermometer

16:35 - Mistake 1 - Prices are too low

16:55 - Mistake 2 - Underestimate costs

17:08 - Mistake 3 - Don't understand your value

17:27 - Mistake 4 - Focus on wrong customers

18:05 - Sales and profit over a product's life

19:20 - Why is pricing innovation hard?

21:27 - How to optimize prices

22:32 - $1B formula

24:05 - Price and complexity

26:55 - 10 - 5 - 20 rule

28:20 - Summary

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