I'm Salim Virani. My background is in peer learning and supporting creators. I'm a techie and like to make things that enable people.

How To Price A New Product
May 14, 2009

A product designer from LKIC's Tycoon Bootcamp approached me for help determining the price for his new product, and getting it to market.

The product is a “category killer,” having no obvious competition, so he’s struggling with determining a sale price. At this stage, the price is a pivotal part of his business plan. Since his designs aren’t yet legally protected, using quantitative tests in the marketplace isn’t an option.

When setting prices without exposure to the marketplace, the best practices set out by John Hogan in his book “The Strategy and Tactics of Pricing” are the strongest approach.

Determining optimal prices is one of the most underrated and strategically important aspects of marketing. It dictates what marketing strategies and tactics are financially available, defines market segments and determines how to approach each. This requires a in-depth understanding of the users, the industry itself, the market segments and the way customers use the product.

Whether or not your product is a category killer, your customers survived without you before, so there is always an alternative. Hogan’s approach starts with this alternative and then works through the potential markets, determining the added value of your product.

It then covers strategies on managing complex pricing, value communication, and segmentation - all based around the added value of the product for each specific application. This pricing approach doesn’t leave money on the table - customers who derive more value willingly pay more. Creating campaigns is also much easier for these types of segments, because the value has been clearly defined and articulated for each market.

If you’re an entrepreneur with a new product, this method of pricing is extremely helpful throughout your business. If you’ve been using a cost-plus or directly competitive approach until now, this book will be an eye-opener.

Enhanced by Zemanta

So, uh, what's happening?

I’ve recently become a Kernel Fellow and am exploring new models for collaboration.

I’ve done a few advisory gigs too - for Polygon, Limechain and Bankless on education and support programs.

About me

Fun crypto projects

  • Cuppa - decentralised collaboration protocol (WIP)
  • Nonfungo - completely on-chain NFT sale notification bot for Discord. (Look ma! No Opensea API!)
  • Powerplays - real-time token launches

Collected practices

  • DAOistry - practices and mindsets from successful blockchain communities
  • Decision Hacks - early-stage startup decisions distilled

Peer Learning work

  • Peer Learning Is - a look at peer learning around the world, and a program design methodology
  • Mentor Impact - approaches used by top-performing startup mentors
  • Source Institute - skunkworks I founded with open peer learning formats and ops guides