Pricing sense
Read how price shapes who adopts, who stays, and what the product is worth to them.
Price isn't a number you set at the end. It's the filter that decides which customers walk in the door.
You sell a usage-based API at $0.01 per call. A large prospect says: "We'll sign today if you give us a flat $5k/month unlimited plan." Finance is nervous — under heavy usage, that plan could lose money.
What's the strongest read on the ask?
Price selects your customers
It's tempting to treat pricing as capture — what slice of the value can we take? But the more consequential effect happens before anyone pays: price decides who even considers you. A low price pulls in the price-sensitive, who churn when a cheaper option appears. A high price screens for buyers who expect — and will pay for — depth.
So the first pricing question isn't 'how much can we charge.' It's 'who do we want, and what does this price do to that population.' The same product at $9 and at $900 is, in practice, two different products with two different customer bases.
Extraction vs selection
Pricing as extraction
How much can we capture?
- Anchors to cost or competitors
- Optimizes a single conversion number
- Treats every customer as the same buyer
- Surprised when 'cheap' customers churn hardest
Pricing as selection
Who does this price let in?
- Anchors to the value the buyer gets
- Watches who adopts and who stays
- Reads willingness-to-pay by segment
- Uses price to attract the customers it can keep
Price shaping the population
Superhuman's $30/month email
Deliberately high for an email client.
Screened out casual users and selected professionals who bill by the hour and feel the time savings.
A freemium tier that never converts
Free, generous, no urgency to upgrade.
Fills the base with users whose willingness-to-pay is zero — real serving cost, no path to revenue unless free earns its keep in referrals.
Before you argue about the number, ask who each price lets in and who it keeps out. The right price is the one that attracts the customers you can actually serve and retain.