I’m in the middle of a classic startup pricing standoff.
A client has developed an impressive new tech product that solves a widespread problem. The solution works beautifully, but now comes the tricky part — deciding what to charge for it.
Two partners are locked in an arm wrestling match that might sound familiar to anyone who’s launched a product:
The inventor wants to price competitively with existing alternatives. His focus is market adoption and helping as many people as possible solve the problem he’s been obsessing over for years.
The investment partner wants to position and price it as a premium solution. His focus is recouping startup costs and establishing the product’s value in the marketplace from day one.
I see this pricing tension all the time, and it reveals a fundamental difference in perspective:
The inventor is thinking primarily about the problem. The investor is thinking primarily about the solution.
The inventor, like many technical founders, isn’t fully considering the mountain of costs beyond product development — marketing campaigns, legal fees, compliance, customer support infrastructure, and the inevitable surprises that always emerge.
Meanwhile, the investor risks overplaying their hand.
Premium positioning only works when buyers clearly SEE the value difference. Set the price too high without establishing that perceived value, and sales will suffer no matter how mind-blowing the product is.
In I Need That, I explore how the dog brain (our emotional decision-making system) makes snap judgments based on price anchors and perceived value. Price a product too low, and that system assumes it’s inferior. Too high, and it triggers resistance before the value proposition can be understood.
The sweet spot:
A price that signals premium value while leaving room for strategic flexibility.
For online products especially, initial pricing needs to accommodate future promotional strategies — capturing emails through limited-time offers, optimizing for cart abandonment recovery, seasonal promotions, and building a sustainable customer acquisition funnel.
Product Payoff: At first Peloton faced this same pricing dilemma. With competitors selling stationary bikes for $500-1,000, they launched at $2,245 plus a $39 monthly subscription. This premium pricing signaled quality and exclusivity while funding infrastructure. And, hugely, they maintained flexibility by offering financing options (as low as $59/month) that brought the psychological entry point down without cheapening the premium positioning.
Action for today: Consider adopting a “tiered anchor” pricing strategy. Set your premium price point where it needs to be for profitability and proper positioning, then create strategic “entry points” that maintain the premium anchor while providing more accessible options. These might include introductory offers, stripped-down versions, financing options, or loyalty programs — all are ways to broaden your market WITHOUT sacrificing your value positioning.
Have you faced similar pricing tensions with partners or team members?
How did you resolve them? Tap that reply arrow and share your approach to this delicate balancing act.
Or reach out to my amazing team of product marketing strategists at Graphos Product.