41. If you’re only winning on price, rethink the value you add
Unless you’re Amazon, a price war can be brutal. Instead of being cheaper, think about how to differentiate.
42. Consumers and businesses behave differently when it comes to money
As a company, we pay a huge amount of money for software and don’t flinch, but in my personal life, I’m still on a free Spotify account.
Many founders don’t have real work experience before starting a company, myself included. Without being in a work environment, it’s hard for a founder to imagine how much companies pay for software, which leads to underpricing their product.
43. If you’re a SaaS product, read this post over and over again
This is easily the best SaaS analytics post I’ve read.
Revenue isn’t a bad thing. Want to know what we do with revenue? We support a team of terrific people that help us build and support this product. Every day we make the product better, because we have revenue. The more revenue you have, the better you can make your product for your customers.
For some reason, the mental default for founders is that their product should be free – and charging needs to be justified. The inverse should be true – the mental default should be that your product should be paid and being free should be justified.
In fact, most pricing truisms should be reversed. Statements like “cheaper and better” should need to be justified, instead of spoken and accepted as truth.
Today is a good day to grow revenue! No reason to wait. I find it weird that I meet with founders and have to convince them that growing revenue is important. Then, runway decreases, they can’t raise, the game is over and everyone acts surprised. (Don’t be the startup that accidentally runs out of money)
In fact, if you get this figured out, you may get to the mythical “infinite runway”. Then, if you want, you can turn on the spigot and operate at a loss in exchange for revenue growth. That’s the moment increasing your burn rate for growth makes sense, but rarely before.
Give me a few more years and I’ll post the next 40 lessons! I’d love to hear your lessons in growing revenue in the comments.