Guy is currently on vacation. I tried sending him an interview request, and a responder replied. Plus I also saw on Google+ another person asking for the interview. So that wont work. I will try to get to the person that got the investment from Guy so I can reach him, but that means more research. Every step. Hustle! Research! Hustle! Work smart – work hard. Hustle!
What do you need to know about Guy Kawasaki?
He loves rottweilers. How do I know? Well, I’ve read 3 of his books (The art of the start, Enchantment: The Art of Changing Hearts, Minds, and Actions and What the Plus!: Google+ for the Rest of Us, watched several presentations, follow him on 4 major social networks and have his picture in my room (to remind me every morning not to be a bozo). So yes, Guy has a bloodhound/Rottweiler, I am sorry I can’t remember his name, and I am not sure Google will help you with this one.
Now you also know why Guy loves to talk about selling dog food online. Pets.com, epets.com, dogfoodonline.com and many others. There’s no need for me spending time about their patent pending, curve jumping, paradigm-shifting, service with revolutionary SEO strategies. But you should know that Guy survived online dog food, and the .com bust. He also likes to say you need to eat your own dog food. Let me explain what he means by that.
My startup delivers information about domain names. We still haven’t launched, the system isn’t ready. I am using the faulty prototype, and with it I have signed our first client. Our client isn’t actually using WhoAPI, I am using it, and the first client is the end user. The client isn’t technically aware of full possibilities of our project, but he is aware of the benefits and wants to use them. I have a rottweiler. I eat my own dog food and it’s not even cooked yet.
He loves ice hockey. I am not really sure where one can play ice hockey in San Francisco or Hawaii (where Guy is Born), but if you want Guy’s attention, ice hockey is the right path. I am not sure what’s his favorite team, but I am not here to speak about hockey either. I have two great hockey analogies for you. First one was used both by the late Steve Jobs, and Guy Kawasaki and of course the legendary hockey player Wayne Gretzky. He said:”I skate to where the puck is going to be, not where it has been.“. Wow, now that’s profound. Use this in your business, and especially in the technology. Never do what everyone else is doing, see the future, and see where the industry and the markets are going. Invent!
There were people that were cutting and delivering ice, then there were companies that were producing and shipping ice cubes, then there are people like Einstein who invented refrigeration (Szilard-Einstein refrigeration patent) and companies who built refrigerators, and you will have companies in biotech that will make food that doesn’t need freezing. That’s curve jumping, skating where the puck is going to be.
The other hockey analogy I learned from Guy Kawasaki is that of an ice resurfacer. In his presentation Guy uses the term “Zamboni” which is the most popular brand. What the ice resurfacer does it removes all the lines, and irregularities from the ice. It creates an intact ice, perfection. Similar to first snow, where no one set foot. This is the same as a new company. It’s not ruined by the logo your aunt made. It’s not ruined by nagging customers who want a discount, or by a lousy service you provide. Guy says that at that point (fresh ice, new company) is also difficult to set priorities. I don’t have to say how much I agree to this, because you have to agree to everything that Guy says (unless one thing, which I will leave for the end). He was the Macintosh evangelist, and part of the team around which the universe revolved, and one must respect that. Your focus must go towards the things you will be proud to share with your spouse. Why spouse? Well Guy celebrates women, and in all his books he is referring to “she”, rather than “he” when he wrote. This is his way of repaying them. You know what? This wouldn’t be a Guy Kawasaki post if I didn’t do the same.
Maybe that’s the reason Guy loves to fly Virgin? On a more serious note – this is what happened.
Backstage in Moscow. Richard Branson is speaking before me. He asks me if I ever fly Virgin; I admit that I never have. He asks me to try it. I say to him: “If Richard Branson asks me, I guess I have to.” He then gets on his knees and starts polishing my shoes with his jacket in order to convince me. Can it get any better than this?
So, there you have it. When was the last time you polished your prospective client shoes? Maybe today is a good day to start. Lot’s of people use some company’s products just because of the way their CEO/owner behaves. I am sure you can find examples in your lives. Be that CEO.
I have never flown with Virgin Atlantic because I can’t afford it, and I was never on a flight longer than 3 hours. But, I will one day. I’ve read Richard Branson’s autobiography “Losing my virginity” and it inspired me. I love inspiring people, and I love to inspire other people (or at least try). I also love successful high school/college dropouts, they are like that statistical spike that no one can explain. Flying Virgin Atlantic, increases your chances of bumping into Guy Kawasaki by 0.0000001% and it also gives you a common topic with your favorite VC. You won’t bump into Richard Branson, he flies with an air balloon, or water skies.
Guy loves his family. He has 4 children, and I cannot begin to explain the respect I have for successful business people (especially investors) that have children. This also means Guy turned down a job offer from Yahoo, that he says cost him 2 billion dollars. So, if Guy doesn’t invest in you, don’t take it to your heart. He has Meniere’s disease, and he can always say he didn’t hear you right. Hint, if you are are a startup that helps people with Meniere’s disease, go for it. Guy likes to joke about his condition, and that he got it from hearing lousy pitches. What’s a lousy pitch?
Enter the bozos. A bozo by Steve Jobs’s and Guy Kawasaki’s definition is a person who… for example, reads of the slides. When you give a presentation, DO NOT, I repeat, DO NOT, read of the slides. The slides are not there for you to be your crutch, you must know your shitake. (Shitake is a word Guy often uses) They are there to help people understand what the heck you are talking about. A picture is worth a thousand words, right? Use pictures, use videos! If you want to create inspiring presentation read Carmine Gallo’s book The presentation secrets of Steve Jobs. It helped me tremendously! When I gave my first presentation it was of bozosity (you see you can use this as an adjective) proportions. And then one day, I gave a presentation to about 50-70 college students. First thing I said I am not going to talk about my startup because it’s really technical and niche, and they wouldn’t understand any of what I said. I then proceeded with the 20 minute presentation about investors, inspiring companies like Apple, Zappos, and Simon Sinek. The first question from the audience after the presentation was: “What is it exactly that your company does?”. I am not telling you this to brag, but to give you an example that this stuff works! Don’t be a bozo, don’t read of the slides, remain eye contact, people want to be inspired. Guy Kawasaki also has a 10-20-30 rule. 10 slides, 20 minutes, 30pt font. Do just this, and you are better than 50% presenters. As you might have guessed, Guy doesn’t love bozos, in fact, he sets his Rottweiler on them.
Every man loves his car (no matter what they tell you). Guy drives a Porsche. One does not simply buy, drive, have a Porsche. It is a special connection. Guy often posts photos of his Porsche, of the replacement Porsche they send him, and when he goes to the track to drive a special Porsche. Tip, respect the Porsche.
One last thing. Whatever you do, if Guy Kawasaki says your startup sucks, don’t believe him. He said so himself. As a matter a fact, don’t believe anyone like him. He says, the most dangerous people for your startup are VC’s who say they won’t invest in you, and that your startup sucks.
Some VC funds even display their anti-portfolio, and there you can find companies like Apple, Google, etc. Thing is, hitting a jackpot with an investment is close to gambling. A barefoot guy on LSD, and a guy wearing flip-flops are responsible for the creation of Apple and Facebook. The asocial guy responsible for the creation of the biggest social network. Seriously, are you kidding me? Richard Branson was a dyslexic who didn’t get through high-school. How do you find the courage to invest in people like that? There are no analytic skills that can tell you where to invest for a big return. Go with your gut feeling. Why is going with your gut feeling the right thing to do? Well read Simon Sinek’s Start with Why: How Great Leaders Inspire Everyone to Take Action, and Malcolm Gladwell’s “Blink: The Power of Thinking Without Thinking“.
It’s been a working Sunday for me, and it’s time for my first of many to come VC interviews. I am proud to present Jason Mendelson a co-founder and Managing Director at Foundry Group an early-stage technology venture capital firm. Yes, he is a venture capitalist. Previously, he was an attorney at a large San Francisco Bay Area Law firm and prior to that, a software engineer at Accenture. And before that he was a drummer. Yes, drummer.
Foundry group invests in a range from $100,000, up to series A – up to $10 million. So far, they have invested in: attachments.me, www.admeld.com (that was acquired by Google), www.seomoz.org and www.trada.com, www.yesware.com (my three personal favorites) and www.zynga.com (perhaps you’ve heard of them). All together 49 startups, you can see there portfolio on their website. Not bad for a drummers portfolio.
Jason Mendelson Talks About Startup Failure
Goran: Jason, thank you very much for taking the time to answer these questions. As you may know, there are a lot of startups looking for funding, looking to become great entrepreneurs. What is the most common pattern you see in someone who just doesn’t have what it takes to get the investment, to bring that startup to the next level, to succeed?
Jason: Knowing one’s strengths and weaknesses are key. Not only will this allow the person to scale into different roles with the company, but also build out a great management team. While the founder may be the CEO from start to finish, the actual job changes greatly over time, as the company matures.
Having self-awareness to be able to constantly monitor one’s own performance is key. Aside from that, have a maniacal focus on the product and customer is a must. Release product often and be deep into analytical thinking to gauge success.
Goran: As you already know, I interviewed Ben Coe, the co-founder of attachments.me. He certainly doesn’t fall into the previous category, but what was the sexiest thing him and Jesse did in order to get Foundry group to invest? Back than, they were in Toronto, how did that affect the negotiations?
Jason: I thought both Ben and Jesse were super smart, had a ton of passion for what they were doing and identified a real problem in the market. Personally, I’ve wasted way too much time dealing with the problems that their solution fixes. Also, I just really liked the guys. They are the type of people that you want to spend a lot of time with and that is a good quality for a VC investment.
Goran: Was moving them to Silicon Valley a part of the deal? Do you remember Ben’s and Jesse’s reaction when you told them you want to go through with the investment?
Jason: Not part of the deal – they put that on the table the first time that I spoke to them. As for their reaction, they were excited. So was I.
Goran: What does your every day look like, what is your passion? Is there something that you think about every day?
Jason: Best part of being a VC is that I don’t have an “every day.” It’s always different and that is what I’m passionate about – change. I love thinking about how quickly technology is changing the complex and simple things we do every day. I appreciate every day the great entrepreneurs that we get to work with.
Jason: Wow, that’s a good one. I think I’m essentially the same guy who grew up in Detroit, Michigan, but with more grey hair. I really love helping, in any small way, folks who have a good head on their shoulders and are trying to do the right thing.
Goran: Can you recommend a book, speaker, or something else for those who are knowledge hungry?
Jason: I’d be remiss if I didn’t mention that my partner Brad Feld and I have a book out called “Venture Deals, how to be smarter than your lawyer and VC”. It’s a book that teaches folks how to get a VC funding done correctly and removes all the secrets of the process.
Goran: Is there something you wish to say that is important to your portfolio, is someone hiring, did someone reach a huge milestone? What’s the biggest news currently around Foundry group?
Jason:There is always so much going on that news will be stale by the time your readers get this article. I’d say that I’m tremendously proud of our portfolio’s success and even more proud of the great relations between the Foundry Group partners, the entrepreneurs we get to work with and our investors.
It’s really important to us that everything we do is done in an open and transparent manner. It is really important to me that being a VC means you can do well by doing good.
You can find out more about Jason on his website JasonMendelson.com.
There’s something about serial entrepreneurs… Take cliff diving for example. You are standing on top of a cliff, let’s say 10m high. It doesn’t matter if your plan is to jump on a head, or legs. You are scared as hell! Some of your friends, and “friends” are teasing you, saying you don’t have the guts to jump. You know that the chances of something bad happening are minimal, but there’s this loud voice inside your head yelling you could break your back, neck, embarrass yourself.
And than finally, finally you beat the coward in yourself. You take the jump! Just do it, as the commercial said so. The rush goes through your body, as you hit the water you are relived. You are victorious as your friends are chearing, not tesing you. Entrepreneurs, you know what I am talking about.
Than a funny thing occurs. Along comes winter, and the next summer. You are up on that big rock again. Guess what, your legs are shaking of fear. Once again you have to beat the devil, the diablo. What in the world led you to that silly rock again? What in the world were you thinking?! Why, why, why do you persist? Maybe because you choose to. Maybe because you are foolish enough to think you can change the world. Maybe because you want to help people. Or maybe you just have that drive within you, and you are like a rocket prepared to do what it takes to reach Mars.
This is why I interview entrepreneurs. In our country, entrepreneurs like Saša don’t get (wrongfully) much media attention, because all the bad entrepreneurs get it. This leads the public oppinion in the wrong dirrection, so the public turns into a crowd that laughs at you, points fingers for no apparent reason, and throws accusations, because they are used of entrepreneur wrong doing. I choose to believe differently, I see entrepreneurs as saviours of the society. Paying way more taxes that drives country budget, and drive the ecnonomy by spending more, hiring people that were unemployed, and inventing new services (or bringing old ones to mass market) so they solve problems. Basically entrepreneurs are problem solvers, they are the solution!
I am sure there are some people in your country as well that call themselves entrepreneurs, when they are not. Know thy true entrepreneur, the force is strong within him.
Why Saša Šarunić? Oh well, no particular reason… He founded a succesfull mobile and software development company (5minutes) and got an $1.7 million for a third (ShoutEm) (The Next Web, 50 cent use it and even Eric Ries with Lean Startup to name a few), that’s innovation and high tech wrapped into one. You could say cliff diving is second nature to him, if you know what I mean. They were the first Croatian startup to get VC funding, went to Seedcamp, and the whole shebang.
Goran: Saša, how do you measure your success with your projects/startups/companies? You co-founded Pticica and Trosjed (which was sold to Net.hr), then 5 minutes, and then ShoutEm, in your eyes how do you measure success in them?
Saša: I measure success in work by two parameters – fun that you have by doing a work, and money as a compensation for your effort. I started all four projects with Viktor Marohnic who proved to be a great partner, full of energy and good ideas. Working with him was already guarantee enough that we were looking at fun times 🙂
While both of us were pretty enthusiastic about Pticica and Trosjed and had a great time working on them, those projects were complete failure in terms of revenue. The whole concept was based on our false presumption that advertisers will stand in a queue to advertise on such great social networks we had built. 🙂 Nevertheless, we learned a lot on our failures and entered the web and multimedia business which was completely unknown area for us before.
Experience gathered on Pticica and Trosjed allowed us to establish Five minutes which is currently going really, really great in terms of interesting projects and amazing coworkers. The money is not bad either. 🙂
ShoutEm is definitely the most fun project we’ve being working so far. It’s for us what’s going for Olympics to a sportsmen – fighting with the best ones. While not profitable yet, ShoutEm has, at our opinion, the potential to outgrow Five minutes significantly.
Goran: Can you tell my readers where did you learn to code so well? How would you compare yourself with some of the best coders in the world that work at Google, Facebook, Twitter? Would you say coding is your passion, and why did you choose this particular programming language?
Saša: I’m programming since I was 12. I’m 37 now so you can do the math 🙂 It must be a passion since no one was forcing me to do it.
There is no chance that I can compare or compete with the best coders in the world. Most of ShoutEm and Five minutes employees are better developers than I am. However, I think I have a knowledge and people skills broad enough that I can be a CTO and do it well.
Since the team is growing and management roles take more and more of my time, I must admit that I’m programming less and less, just a few hours a week on some non-critical tasks. I do it to stay in shape and because I love it.
Goran: At what point and why, did you choose to go after a VC money? Whas the process difficult, or should I ask, what was the most difficult part? How did you feel when RSG Capital said they were interested in investing, how did they tell you the good news?
Saša: Viktor and I knew from the beginning that we don’t have enough money to finance ShoutEm development and were aiming for VC money from the day one. The process lasted for the full three years. During that time we were constantly rejected by VC-s as being in too-early stage of development (which is just a VC’s code for “we are not sure if you will succeed or not”). RSG was one of the first VCs we contacted and they passed on a deal as well. However, we were persistent as hell, and this didn’t went unnoticed. After years of pushing it, we finally closed a deal. Since it didn’t came overnight, there was no ecstasy, just a relief that we’ll be able to finish the project for which we knew will be a success.
Goran: How are you coping with the employee growth? Do you use any strategies, attend seminars, read any books, gut feeling? Werner Vogels for example likes to use small times, and he calls it the 2 jumbo pizza rule. If you can’t feed your team with 2 jumbo pizzas, the team is to big. 🙂 Do you have any particular company culture, do you do something different?
Saša: I must say that I’ve read a pile of books on organisation, project management, psychology and software development in general, but non of them survived the touch with reality. Each company is different in its own matter and best practice books are good to get a general feeling on how others do it, but you have to find what works best for your own company by yourself.
When we looked where to grow the team, we always did it where it “hurt” the most. For example, we didn’t employ a secretary only until we couldn’t do the paperwork by ourselves because of lack of sleep.
If I could stress one thing we constantly promote in our company(ies) is pro-activeness. That is a trait that pushes the company forward.
Goran: Hypothetically speaking, if you sold ShoutEm for $100 gazillionbazillion what would you than do?
Saša: I would rest for a year (just sleeping and doing nothing 🙂 and probably start some new venture the year after 🙂
Goran: What does your tipical day look now? Do you code late, or do you get up early?
Saša: When I was younger, I really liked programming in the silence of the night and that was the most productive part of my day. However, now I have a lot of coworkers who depend on me being available in the company, and I can’t afford to wake up at noon anymore 🙂 To my great relief, I discovered that mornings are great for working as well. I would even dare to say now that you can’t be really successful in life if you don’t get up early (except if you are a rock star, maybe).
Goran: My startup WhoAPI deals with domains, so I need to ask you a couple of domaining questions 🙂 What was the first domain name you registered?
Saša: That was time.hr, a domain for my first company – Time d.o.o. This was a company doing software development for radio stations, real estate agencies and lawyers. Although it was a one-man-show, helped me earn some money during my university days.
Goran: Time.hr, that’s a great domain name, what are your plans with that!?
Saša: It is now a company ran by my mother doing marketing for local newspapers in Dalmatia. It is interesting that time.org and time.net domains were for sale at the time but I didn’t want to buy them. I thought that it was too much to give $70 for the domain (the price of a domain in 1995.). Stupid me! 🙂
Goran: Does ShoutEm have any other cool domains like shoutem.com? For example, would you be interested in registering shout.app? Why yes, why not?
Saša: Yes, we bought all variations that we thought people would type in and address box instead of shoutem, like shoutem.net, shoutm.com, shoutm.net and are always looking for a new ones. I consider good (short and simple) domain name crucial for the success of the company and would be interested in buying shout.app as well.
I even have a few of my own, like – sarunic.com, truehackers.com, hackerville.net, etc… waiting for me to finally start a personal blog.
Goran: Would you like to add something, perhaps if you are looking for new employees, or some special announcement, some news, or just say hi to mum and dad?
Thank you for your time!
First of all, I should say that 50% out of nothing is still nothing. You shouldn’t be afraid of giving equity, however, you should be smart about how much you give and to whom. If an investor asks for 50% of equity he is probably inexperienced. Why?
1. If he has the majority of equity, you are actually not the owner of “your” company, ergo it’s not your company. If he is asking for 50% he is probably an angel investor, which means you “lose” a lot and you haven’t even started. In fact, you just had your first exit, and you can go on vacation. This will most likely kill the entrepreneur inside you and if the dark days come (and trust me, they will) you are probably more likely to raise hands, say that it’s not your project anyway, and leave.
2. If you are willing to give away 50% of something that’s so valuable and spectacular, why are you doing it? If it’s not that spectacular, why would I want to do it in the first place?
3. If the investor is experienced, he is probably testing you, your negotiating skills and your perception on value of the idea. But in this case, he will probably start with a much lower take in equity depending on the region, industry, market size, etc.
How much of equity should you give away to an angel investor? It depends on many factors, sadly your location is the first one that will influence this decision. In Silicon Valley, angel investors get below 10%, but in other parts of the world equity goes as high as 30%. You should also take into account if it’s „smart money“ or just money, that you are getting.
If your angel has a big contact list, or Rolodex, as they like to call it, perhaps it’s worth a consideration. Sometimes 30% equity means the success of your startup, and 6% means failing. This is something you will have to decide on the spot, since these decisions are really unique, custom and differ from case to case.
Giving away equity also depends on the amount of money you are getting. Also, this sets the current value of your company. But, company valuation isn’t something you should be concerned at this stage. Now your top priority is to launch early, launch often or as some say “fail fast”. Or as Guy Kawasaki would put it: „Don’t worry, be crapy“. So let’s take the 50% equity as an example and see how it would play out.
Angel investor: Your project looks interesting, and I am interested in taking a shot. I can give you $50.000 for return of 50% in equity.
You: Thank you very much, I am glad you like what we are doing. But, I am willing to give 10% at most. I want to leave room for first team developers, and VC fond.
Angel investor: Ok, even 10% sounds good, but than I am willing to give only $10.000.
The question now is, what are you going to do with only $10.000? Is this investor worth the bother? Are you going to answer his phone calls on Sunday when the project starts to go south? Is this investor going to scare away other bigger investors that want to be alone before the VC fond comes? What if you took 30000 for 15%? How much money do you need in order to get the startup moving and making first sales? How much money/time do you need until first sale? How much money/time do you need until break even?
I know I put up a lot questions, and not so much answers. However, asking the right questions will move you in a direction you want to go.
You have just read the 3rd question and answer of my book. Interested in reading more? Preorder my ebook, and support the good I am doing.
[EDIT 22nd, August, 2014] If you liked this blog post, perhaps you will like the ebook]
I was just looking at the new prices for WhoAPI, and I have to say that for better part they were set up by the other co-founder. I wanted to raise some concerns, and instead of just going to him individualy, I decided to write this blog post. Hopefully it will help startups like Webiny who are just in the process of changing their pricing strategy. And also give me a chance to go through some things on my own, and give an opportunity to the other co-founder to learn something.
In startups like WhoAPI, and Webiny where there is a mix of a technical and business oriented co-founder pricing is a tough call to make. The technical guy either overprices (because he cares about his masterpiece) or underprices (because he is considering only the cost of his development time). It’s not that the other one doesn’t care about his masterpiece, it’s just that technical co-founders are short sited when it comes to pricing.
I believe that nobody is good at everything, and I have yet to meet a technical person that kicks ass at pricing strategy. Maybe I did meet him, but we didn’t talk about pricing. That’s because techincal guys don’t like to talk about pricing, business guys do. Get it? Rocky will knock you out with his left hand, but his right hand is just not so powerfull. Then why does Rocky like to punch with his right hand? Now, don’t get me wrong, I love technical co-founders, I work with one for the past 10 years, and you will find here interviews with them, but at least they could read a little bit about this, if they wan’t to make such a key desicion.
The technical co-founder needs to put in the quality input guiding the business co-founder, giving him a ballpark on the complexities of their product. And than the business co-founder needs to set the prices. After all, it’s his ass on the line if the product doesn’t sell, or the company isn’t making enough money. (That off-course is unless it’s a lousy product). But it’s not about covering your ass, it’s about getting the company (meaning everybody on board) move forward!
Pricing a product is one of the toughest things to do in business, especially in startups, and especially in disruptive startups with innovative products (or services, but I am using the word product). Pricing your products properly in many ways leads to company’s success!
Before setting prices, one must be clear about one thing, you are here to make money. The creative part is over, now it’s time to focus on making money. This does not mean “rip people off”, but take into evaluation what your client’s ROI will be. So, don’t sell that life insurance to the poor guy who barely has money for bread, just to make the sale. Making money means generating enough revenue from selling your products so that you can not only cover your costs, but take a profit and perhaps expand your business.
The biggest mistake many businesses make is to believe that price alone drives sales. Prices, rebates, discounts are just short-term rush, like a drug. It creates addiction, and takes you to a downward spiral! There are no passionate clients and buyers tha tattoo a companies logo on their body! Do you think that a 20% discount will make you client tattoo your logo? On more information about this, please read Simon Sinek’s: Start With Why.
Selling price is a function of your ability to sell! Everybody can sell a Ferrari for $200, but can you do it for $200,000? It’s no surprise technical people aren’t good at setting prices, most of them aren’t good at sales! You can find more about this with How to Sell at Margins Higher Than Your Competitors : Winning Every Sale at Full Price, Rate, or Fee, Lawrence L. Steinmetz, co-author of How to Sell at Margins Higher Than Your Competitors : Winning Every Sale at Full Price, Rate, or Fee.
“What’s the difference between an $8,000 Rolex and a $40 Seiko watch? The Seiko is a better timepiece. It’s far more accurate? The difference is your ability to sell.” says Lawrence L. Steinmetz.
Usually it involves considering certain key factors, including pinpointing your target customer and take into account how much will he profit from your product (or what will your product provide him), tracking how much competitors are charging, and understanding the relationship between quality and price.
- Your actual product costs, including labor and the costs of marketing and selling those products.
- All of the operating expenses necessary to own and operate the business.
- The costs associated with borrowing money (debt service costs).
- Your salary as the owner and/or manager of the business.
- A return on the capital you and any other owners or shareholders have invested.
- Capital for future expansion and replacement of fixed assets as they age.
You may realize that you have missed your target audience by pricing your products too high. You can always choose to discount your products or give customers something for free in order to get them to try your product or generate traffic to your storefront or website. “You have to get people in,” says Charles Toftoy, associate professor of management science at George Washington University. “People like getting something for free or some kind of discount.
Your product price should vary depending on a number of factors including:
- What the market is willing to pay.
- How your company and product are perceived in the market.
- What your competitors charge.
- Whether the product is “highly visible” and frequently shopped and compared.
- The estimated volume of product you can sell.
One thing is for sure with pricing, you will know really soon if you got it wrong…