Joel Gascoigne is focused on the lean startup approach and customer happiness.

Joel Gascoigne





Few months ago I stumbled on a great tweet from a great blog. Since it’t been a while, I can’t really remember what was it about. What matters is, since that moment I wanted to interview Joel. You can see from a persons tweets, Facebook statuses and their blog posts what they are made of. You can see what drives them, and how they inspire other people. You can use people like Joel to see if you are going in the right direction. What a funny coincidence that perhaps a week from now two of us could be sitting together in San Francisco, and when we met online I was in Rijeka, Croatia, him in Tel Aviv, Israel.

Goran: Joel, first of all I have to say we have a very similar taste in books! 🙂 The Lean Startup by Eric Ries, Delivering Happiness by Tony Hsieh, Tipping point by Malcolm Gladwell, and Richard Branson’s autobiography Loosing my Virginity. I also read all of them, and these are some amazing books. But apart from those, which is your favorite or perhaps top 3 if you can’t decide? And also, has any of them made a big impact on your life?

How to win friends and influence people: Dale Carnegie

How to Win Friends & Influence People – By Dale Carnegie

Joel: By far my favorite book is How to Win Friends and Influence People by Dale Carnegie. Published long ago in 1936, it is still one of the most important and relevant books I know. The book is all about human relations, all about simply doing the right thing and finding ways to make others happy. It just so happens that this is by far the best strategy to get what you want, too. It also is a much more satisfying approach than being a typical “hard-nosed” business person. The book changed the way I approach others and find people I can get advice from. It has also shaped how we handle customer support at Buffer.

Goran: Why do I get the feeling you traveled a lot? Birmingham, Silicon Valley, Hong Kong, Tel Aviv did I miss anything? You wouldn’t happened to hear about a book Four hour workweek by Timothy Ferriss? What Ferris did was he lived a 1-3 months in a lot of different cities. Places like Berlin, Buenos Aires, San Francisco, Thailand, so it seams to me you are a bit of Timothy Ferriss yourself?

Joel: You missed a quick trip to Japan that we fit in there too, and another brief one to Spain in the earlier days of Buffer 😉 It’s interesting you mention the Four Hour Workweek, since I actually read that book when starting Buffer, before all the travelling happened. I never thought it directly influenced my decisions to travel, but I think that it perhaps did subconsciously. I certainly enjoy spending 3-6 months in other places and truly experiencing new cultures. It’s very powerful and I think the travelling has helped me in many different ways.

Goran: Since you are an experienced startuper I would like to set an example with your answers on how to pitch to an investor. Can you describe your business model? What does your startup do? How do you differentiate yourself from your competition and what do you have that they don’t? Why should I use your service?

Buffer logo

Buffer logo

Joel: Sure thing! Buffer is your smarter way to share to Twitter, Facebook and other social networks. Whenever you come across an article you love, throw it in your Buffer and we’ll share it for you with your friends and followers. If you add 5 articles to Buffer, we’ll space them out through the day so you don’t flood people with 5 Tweets at once. We’ve been running for 2 years now, and we have 350,000 users of which 35% are active. We have a super simple business model: people pay for a $10/mo Awesome plan if they want to share more in advance (e.g. line up 4-5 days of sharing) or want to share to more accounts (up to 12 of any social network). We have 1.5-2% of users on the paid plan, so we’re currently on a $800,000 annual run rate. Our key differentiation is that we’re not a dashboard for people to stay inside all day long. Instead, we’re a thin layer spread wide across the web and mobile apps. We have great integrations, for example you can add to Buffer right from inside Pocket, Instapaper, Reeder and TweetCaster amongst others.

Goran: On your Twitter account it says “Focused on the lean startup approach and customer happiness. “. I personally think that’s a great line, and that was the reason why I really wanted to interview you! Can you share some of the strategies you are using for your startup in order to achieve this? How does that work on a day to day basis when you fall into a routine?

Joel: The key question we try to keep asking ourselves on a daily basis to stay lean is “What can we do right now?” This means – what can we do right at this moment to learn about whether what we’re planning to do, what we’re working on, will turn out as we expect and as we hope? It means doing things manually, like manually emailing 100 users a fake weekly report of analytics from their social sharing in order to validate right now whether we should continue spending resources on that feature. More often, you don’t need a product or a feature to be fully built in order to learn if assumptions are correct.

Goran: Hypothetically speaking, if you sold Bufferapp for $100 gazillionbazillion what would you then do?

My other passion is to help others with their startups. I already talk with 5-10 founders every single week over coffee or via Skype to help them with their current biggest challenge (people can get in touch here: http://joel.is/startup-help). We have a long vision with Buffer, but if I were to do something else I would want to help other founders full-time. It would perhaps come in the shape of a co-working space, coffee shop or incubator, but the focus would be on helping others. I’ve found when I do that, I’m happiest myself too.

Goran: What does your tipical day look like? Do you code late, or do you get up early?

Joel Gascoigne

Joel Gascoigne

Joel: I awake early, around 5:30 and try and work for a couple hours until 8am. I then grab some breakfast and have our daily team standup Skype call where we update each other on what we’ve been working on and any improvements we are trying to make with our schedule, sleep, exercise or anything else. I split my time 50/50 between maker tasks (currently building our Android app) and manager tasks. Every day in the afternoon I head to the gym at around 2:30pm to break up my afternoon’s work.

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?

Joel: Haha, wow, that’s a difficult one. I think it would probably be one for a team I used to play online games with back when I was 12. It’s not live anymore 🙂

Goran: Does Bufferapp have any other cool domains like bufferapp.com? For example, would you be interested in registering buffer.app? Why yes, why not?

Joel: buffer.app would be cool, but I’m not sure the real use of it, so for now we’re avoiding picking up too many domains. I do like our short URL buff.ly though 🙂

Goran: You had a great post recently about naming startups, and the role domains have in that process. http://joel.is/post/29186927028/how-to-name-your-startup I do agree in large part, even my startup went through the same thing. We started as www.getwhoisxml.com, and by the time we were 100% sure, we switched to www.whoapi.com. But don’t you think that with proper strategy a domain name like www.twittlater.com or www.sharelater.com or one that’s still available for registration that I will mention privately. 🙂 After all you do own www.joel.is, if that’s not a cool domain I don’t know what is 😀

Joel: I think a good name is useful, especially if people will search Google using similar keywords to your domain. For us, that doesn’t happen, so the domain is less important. Rather than having an outstanding domain, I’d rather have an outstanding name and then get a domain that might not be the exact name. Yes, I’m very happy with joel.is though 😀

Goran: Would you like to ad something, perhaps if you are looking for new employees, or some special announcement, some news, or just say hi to mum and dad?

Joel: Absolutely! I’m back in San Francisco now and would love to meet any founders who want to ask advice. They can Tweet me at @joelgascoigne or book a slot from http://joel.is/startup-help. Also, we are of course hiring at Buffer. We’re looking for people who love our culture of improving ourselves and providing above and beyond experiences for our users. Right now we’re looking for front-end and back-end developers as well as devops, customer support and BD people too. Just email me directly at joel@bufferapp.com if you’re interested 🙂



I never go on a 1 week vacation, but when I do, I mentor 22 startups

Startupcamp Vis





Last week was one of the best weeks in my life, hands down. Why? First of all, thanks to Stevica Kuharski I was invited to come to Vis for free for a week. I asked what’s the catch? He said I have to do what I love, help startups and act as a mentor. I had absolutely no problem with that, and after talking with my investor (who was also coming as a mentor) and my partner (Edi, the other WhoAPI co-founder) I was on my way.

However, I wouldn’t be on my way if the whole camp wasn’t funded by the U.S. embassy! Now if that wasn’t cool I don’t know what is… Also, most of the images and video used here are from U.S. embassy’s in Zagreb facebook page.

Goran Duskic

Goran Duskic

On startupcamp Vis there were 22 startups, and top 3 already got coverage. Just to show you the quality of ideas and startups there I decided to interview co-founders of my three favorite startups there. Some may think why focus on the losers? Well here’s where they are wrong. I see them as winners. They were winners because they showed up on Vis, they were winners because they made profound progress from first pitch on day 1 to last pitch on day 3. And in my eyes, they are winners because they show passion and commitment to do what it takes to succeed. Perhaps there are projects at later stage or with better ideas. This doesn’t matter because these people are ready for overnight success, they are willing to work overnight. They will finish their projects, and if necessary find better ideas.

I published their answers in alphabetic order – I love them equally and if I was an investor I would do some serious due diligence in order to give them seed funding. This post is for them, and I am hoping to help them once again!

Oh yea, it’s ON, Croatia’s got startups!

Goran: Stevica, you an Saša Cvetojević from Croatian angel network were the two conspirators in the master plan called Startup Camp Vis. Can you tell my readears how did you get to this idea, and what was the crucial turning point when you realized that this is actually going to happen?

This idea crossed my mind while we were in Barcelona. Four of us, Sasa, Damir Sabol and Marjan Zitnik were living for 6 days together, which looked like a camp. Then I’ve realized that having a camp for startups would be blast. Participating a panel organized by US Embassy, I’ve expressed this idea to audience. Sita from US Embassy asked few questions and approached me after the panel asking “Were you serious about that camp?”. I’ve sad that I was. “OK, we’d like to pay for it”, she concluded.

Goran: You played a key role in organising the event, to which I personally thank you. I really think we made a difference. Can you tell me what was the most rewarding thing you saw in Startup Camp Vis. Obviously we all had to bail out from our offices to make this happen.

The most rewarding thing was seeing students changing their pitches and presentations. They have made tremendous progress during just two days. I still feel warm around my heart thinking of it.

Stevica Kuharski

Stevica Kuharski

Goran: Do you think that camps like this can make a real difference in the croatian economy, and what needs to happen on larger scale for this camps to occur more often?

Yes, in the long run it could make a difference. Pitched projects now need to grow more and to mature. Only then they will be able to attract foreign investors. For sure we would need more serious young entrepreneurs to have camps more often, not just in Croatia, but in the whole region as well.

Goran: In your oppinion, what was the thing that was missing? More mentors, more time, better ideas, more keyotes, something else? Can this be provided in perhaps next camp?

We’ve missed one more day. For the next camp we’ll squeeze it in and provide students lectures about dilution of ownership, how to create their pitches and basics of investments.

Allmyconferences.com

Goran: What makes your startup so special and why do you think you were invited to come to
Seedcamp, and this week’s Startup Camp on Vis? What exactly does your startup do, and tell us a
little bit about your team (age, background, qualities, etc)?

Ilona Spajic and Matea Torcic

Ilona Spajic and Matea Torcic

What makes us special are basically two things- firstly the team whose energy is unstoppable, and secondly the idea behind it. These two made us pass to the competition part in Vis, work all day and night there (literally) and get much more than we’ve expected (and we expected A LOT).

Our idea is to connect organizers of all kinds of non-formal educational events and their prospect users (attendees) by their previously chosen criteria. The reality is they sometimes just can’t seem to find each other. We want to provide them an ultimate place to meet and make their search and life much easier.

Our team for now consists of us two, Matea (22) and Ilona (24), we’re specialized in Marketing, Business and Finance fields, however we are on the search for the development partner, equally enthusiastic in this as we are. We both come from entrepreneurial families and, therefore, have the insight of all processes needed for something to succeed. And that’s exactly what we have in mind with this project.




Goran: Whats the most valuable thing you got during the Startup Camp Vis? Do you think camps like
this should happen more often, and should perhaps the Croatian government fund such an event/
camp? In general, what can you say about the Startup Camp Vis?

The most important thing we’ve learned in Vis was that we ought to share, comment, ask, criticize and pitch our idea as much as possible. That’s different from the usual Croatian mindset, but you just can’t progress alone, in your room, holding jealously your idea to yourself. Startups need to be dynamic, flexible and fast. With that in mind, Startup Camp Vis was the best place to be this year.

Things like SCVis should most definitely happen more often, and it would be great if the Government would fund them, but somehow we think it will continue to depend on the enthusiastic and crazy people who do it out of the pure belief in young people and their ideas. They were the ones who made Camp flawlessly organized, filled with awesome energy and people.

It’s really a great thing in every sense of that word for them to do it and, without any cliché, make the world a bit better place.

Goran: Were you satisfied with my performance as a mentor, and have the other mentors deliver what
you expected of them? Did we lack some critical information to your startup, and what would that
information be?

Mentors on startupcamp Vis

Mentors on startupcamp Vis

You were a great mentor, to be honest, one of the toughest but with the constructive critics. It was great to listen to you because were/are a startup yourself. Therefore, you were the only one who gave us opinion with the startup perspective which was very valuable.

All the mentors gave us some great feedback that really helped us, not just for the future, but we literary implemented them right away. It was incredible how none of the teams said for Camp it was “Ok”, or “Good”, we were all thrilled. Time of our lives, really.

Goran: At what stage is your startup, and what are you currently looking for? Is it funding, development
guy, biz guy, mentor, or perhaps clients and partners?

We are merely at the beginning of our project, and the Camp was the best thing that could happen at this moment. Our next steps are to establish the first version of our web site, get the developer, collect some data and get our startup going. Obviously, since we are students with limited budget, it would be great to get funding, but to be honest, not as much for the money part as much as for the mentoring, feedback and partnering part.

Goran: What do you see as your advantage compared to Silicon valley startups, and what’s your next
step in achieving that? What’s your and your teams next step in general?

Well, we are geographically in Croatia which is so much cooler than Silicon Valley 🙂

There’s nowhere in the world so much (stupid) bureaucracy obstacles like here, but we like to see it as a challenge. Like we said, we have a great team to start, but we’ll have to expand it a bit more to optimize our resources, skills and technical knowledge.

As we said, we are just beginning the story we believe it’s going to be big. Our passion for non-formal education drives us to work long hours.

Like Peter Drucker said, “The best way to predict your future is to create it.” And that’s exactly what we’re doing.

You can see allmyconferences.com presentation here.

Just a quick update, I hear the girls have a new name and a logo to replace allmyconferences.com 

Anctu.com
Goran: What makes your startup so special and why do you think you were invited to come to Seedcamp, and this week’s Startup Camp on Vis? What exactly does your startup do, and tell us a little bit about your team (age, background, qualities, etc)?

Marko Pavlovic

Marko Pavlovic

-Why is my startup so special? Well most of all, I think that we as a team make our startup special, not because we are some kind of a geniuses, but because we are very passionate about doing what we do.. simply „We are in love“ with the problem that our startup solves , its really breaking the limits once it comes to social media tools, gives users the ability to create their own environment and gives developers a „hotspot“ for building their social apps. Those are probably the reasons why we where invited on SeedCamp and Startup Camp on Vis.

Team is sustained of my coworker Goran Blazevic and me(Marko Pavlović).

We are building social media marketplace called Anctu. It’s an open platform for developers to have a place where they can build and sell their social apps for users, mostly community managers, so they can choose between a long range of social apps/tools that suits them and their business, this way they will be able to create their own working environment for managing and tracking their social media and finally do it all from one place; Anctu!

There are ton of social media services out there which are mostly broken,useless or even good but their are dying since its hard for them to profit, I think a lot of people will agree with me on that. We are not only trying to unite existing ones, but to create new ones and have it working in a harmony with users on a single platform!




Team is expanding rapidly since recently we met some people that share the same vision as we do. Goran is 5 years experienced frontend developer and graphic designer which comes from Đakovo, Croatia. He is 27 years old and just getting his bachelor’s degree at Electrical Engeenireing, very calm and hard working guy, we have a lot in common (we both love Anctu and rakija, that’s for sure!).

I am 20 years old PHP developer(4 of years exp.). Coming from Vinkovci, where I graduated from high school of economics and trade. I don’t know how I ended up there since I love coding & tech overall, from my 10. I started seriously with one unsuccessful Andriod app and ended up 4 years in freelance waters with dozens of web projects behind me. Curentlly studying on faculty of electrical engineering at Osijek, but I feel „one big“ dropout coming up since Anctu needs me here alot, but anyway I plan to finish it later on. At the moment I’m living at Osijek and Goran is moving here also.

Goran: Whats the most valuable thing you got during the Startup Camp Vis? Do you think camps like this should happen more often, and should perhaps the Croatian government fund such an event/camp? In general, what can you say about the Startup Camp Vis?

Most valuable thing I got from Startup Camp Vis is those great people I met there, for god sakes, we became one happy family and that’s awesome! I really felt the bound with all of them there, both teams and mentors! So much positivity, great working atmosphere and crazy fun-times! Startup Camp Vis made me believe in myself even more then I did! What a great experience, it should happen much more often. Croatian government should definitely fund it, especially since this explosion of innovativity is happening on Croatian ground, right?
Startup Camp Vis is connecting people with great ideas and helps them to improve, that’s something great!

Goran: Were you satisfied with my performance as a mentor, and have the other mentors deliver what you expected of them? Did we lack some critical information to your startup, and what would that information be?

You where amazing Goran and same I hear from others! You supported me, advised me, felt my passion and energy about my startup and most of all, you where bloody honest, not only to me but to everyone; that’s exactly how every mentor should be, good job! Every of you mentors where great, some of you had harder time to understand what my startup is actually about, since its pretty deep into social media and development world, but on the end you all got it even better then I expected. This is one thing that almost made me cry: After doing the final pitch, one older mentor came to me and said „I am 70 years old, its really hard for me to understand some tech and social media stuff, but you made me get it all in only 5mins, amazing job, amazing pitch!“. This was my StartupCamp Vis reward, 50 years older person telling me this words. Felt.Stuning! All of you showed interest in my startup, both inside agenda and outside, that’s great!

Goran: At what stage is your startup, and what are you currently looking for? Is it funding, development guy, biz guy, mentor, or perhaps clients and partners?

Anctu logo

Anctu logo

We are at „wrapping up“, we expect our first live beta to be out in a month or so. We are looking for people that have any of those skills and are interested in Anctu, we are looking for people who will share the same vision as we do. Mostly we lack „biz guy“ which would do the sales and keep business connections, but we are also open for all interested clients and partners!

We are looking for funding, but we will turn to that much more seriously once we get the product out, all trough, it would not hurt us if it happens at this point also.

Goran: What do you see as your advantage compared to Silicon valley startups, and what’s your next step in achieving that? What’s your and your teams next step in general?

Silicon Valley atmosphere is much more competitive, here we live in a high-friendly atmosphere, that’s one of the advantages being in smaller communities. For Anctu its just another great location with bunch of good startups, we are not intimidated by it. Our next step is to release the product and get first costumers in.

Get you’r preinvite for Anctu live beta at: www.anctu.com
You can download Anctu presentation here.




Squee.it

Goran: What makes your startup so special and why do you think you were invited to come to this week’s Startup Camp on Vis? What exactly does your startup do, and tell us a little bit about your team (age, background, qualities, etc)?

Ivan Ivankovis, Ivan Kapulica, Krunoslav Klaric

Ivan Ivankovis, Ivan Kapulica, Krunoslav Klaric

What makes us special? That is a hard one. We consider our self different, hmm. That is about it. We believe that we have a good project. That our application has what it takes to become popular not just in Croatia, but with broader public. Squee is a beautiful app that basically allows the user to discover, share and buy an independently developed gadgets directly from your iPhone. Today the Silicon Valley is going through Hardware Renaissance, due to the cheap 3D prototyping and new technologies a lot of small teams make incredible gadgets, they make a prototype in the US, Europe and then they ship it to China, India for “mass” production. A lot of those teams get funded trough www.kickstarter.com. Squee is basically a social hub (mcommerce) for all the gadget creators and lovers.

Squee iPhone app

Squee iPhone app

Ivan, he is a creative guy, designer (likes to brag with the Squee UX), at the moment he is a proud user of CodeAcademy, earning his badges, learning how to program and having a time of his life, also
he is our blogger. Most of our gadget reviews are coming from him. He is a proven entrepreneur. Ivan has successfully founded and runs the best and most beautiful espresso&wine bar and coffee house
in the city, in his words Rubirosa (the name of the place, named after Porfirio Ariza Rubirosa) is the perfect connection of pleasure and taste. Ivan has initially came up with the idea and now he strongly
believes that he is more cool than Mr. Cool himself, Steve McQueen.

Kruno, where to start with Kruno, hmmm. Lets say he is a adventures type of guy at least. Every one of us knows a guy like him. Example, when the waves are so high, and no one else is on the sea he is the first one to come with the idea to untie his sailing boat, pushing us to come with him. We believe he was brain washed by watching Thomas Crown Affairs and Indiana Jones movies just too many times. Also, he is our rock star marketing guy and strategist. As well, he is constantly harassing indie manufacturers to work with us and he is fiercely explaining to them what we are all about. Not that we are counting but we are pretty sure that he achieved seven restraining orders issued against him so far, talking about persistence :)). Kruno is also a consultant with additional self entrepreneurial
experience trough his whole life.

Squee logo

Squee logo

We have two Ivans in our team, not to be confused; the first one isn’t so in love with himself to write twice about his life :). The second Ivan is insanely focused, doesn’t sleep during day nor night, we still believe that he is a robot, or has a twin brother that we aren’t familiar with :). He is the Christopher Columbo of our team, always knows where we are going and in which direction. He deals with everyday problems and issues. Also he is contacting web portals and blogs around the world to develop mutual endorsement and he is spreading the good word. When other people are watching reruns of Two and a Half Men he is working hard as a community manager pushing info and sourcing gadgets. Ivan is working for 3 years now as a strategy consultant with a high number of successfully
executed projects.

Marin, he is our in house developer. Marin is developing our code and he is crazy good at it. Hence, he developed several iOS apps and successfully launched them. Few of his apps have a fan base of over 10.000 users. He is passionate about what he is doing and we are having a blast with him. The most important thing is that we utterly understand each other, when talking about women and wine
obviously.

Goran: What is the most valuable thing you got during the Startup Camp Vis? Do you think camps like this should happen more often, and should perhaps the Croatian government fund such an event/camp? In general, what can you say about the Startup Camp Vis?

The most valuable thing we got during the #scvis was the mentorship and all the networking with super creative and smart people. We definitely believe that camps like it should happen way more often. First thing on our mind when we came back in Zagreb was the feeling of emptiness, I cannot describe in words how much we wanted to wake up again in our apartment on Vis and start with the pitching, hustling and fast mentoring. We missed the entire crew, all the creative startup teams that became our friends and all the mentors. It is not expected from our government to fund such events, #scvis is something they cannot grasp or think off, and that is a shame.

Goran: Were you satisfied with my performance as a mentor, and have the other mentors deliver what you expected of them? Did we lack some critical information to your startup, and what would that information be?

Honestly, we will be forever grateful for all your help and all of your information and time you gave us. Your mentoring was incredibly helpful for us, thanks again for believing in our team and our project.

Goran: At what stage is your startup, and what are you currently looking for? Is it funding, development guy, biz guy, mentor, or perhaps clients and partners?

At the moment our startup is in seed stage. What do we mean by that? We are in a prototype phase and pushing hard to launch our app on the App store. We are looking for a in house developer and
funding.

Goran: What do you see as your advantage compared to Silicon Valley startups, and what’s your next step in achieving that? What’s your and your team’s next step in general?

Silicon Valley is full of large companies and great startups that are hunting for talented young people, so that is maybe the advantage compared to SV, here in Croatia you have a lot of talented people.
Hence, you can more easily gather a good team in the beginning. One big difference is the funding. Silicon Valley is fool of angel investors and VC-s, so startups in Silicon Valley can more easily get funded. Our next step is to push our application to MVP (minimum viable product) and launch it until the end of the year. Also, we are hoping to get funded.

You can download Squee presentation here.




Pricing strategy for startups: Do technical co-founders suck at pricing?

Psychological pricing - http://en.wikipedia.org/wiki/Psychological_pricing

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.

Psychological pricing

Psychological pricing

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!

Can you set the price on this 100 ft yacht? Why not?

Can you set the price on this 100 ft yacht? Why not?

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.

The secret of profitability is not to sell a lot, but rather to sell a specific offering to a specific group and, crucially, not to waste time or resources on customers who fall outside the target group.

The secret of profitability is not to sell a lot, but rather to sell a specific offering to a specific group and, crucially, not to waste time or resources on customers who fall outside the target group.

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.
Perhaps the most important thing in setting prices is that once you do set up prices, that is only the first step. After doing that, you just made the first step. Maybe you can try to integrate Eric Ries’s Lean Startup methodology? Launch some prices, see how you get traction, and then iterate, or take into account for your next product launch once you see your customer segment. You should always test new prices, new offers, new combinations. But never lose your vision, never lose your why (Simon Sinek). Remember, the price is just an end result. Somebody can always, and I mean always be cheaper! Every single time!
Skip to 20:19 of this video, and watch how Steve Jobs jokes about pricing the iPhone.

Another crucial component in pricing is measuring. There’s no point in doing anything if you don’t measure it. How do you know what made an impact on that change? Was it the price reduction, or did your sales feel more confident and managed to get more sales? Sometimes a salesperson has difficulties selling the product because he feels he is ripping the customer off, never a good feeling for a sales rep.

One thing is for sure with pricing, you will know really soon if you got it wrong…