Tag Archives: Chris Dixon

Product Pricing: How much should you charge?

Figuring out how much to charge for a new product or service is absolutely one of the hardest things to figure out.

Charge too much and you may miss the market.

Charge too little and you might leave money on the table.

There is no one answer to the pricing question for startups.  That is why I absolutely love the insights shared by Chris Dixon in a blog post he titled Pricing to the Demand Curve.

In this post Dixon gives us a quick lesson in economics 101.  He states:

the goal of pricing is to capture as much area under the demand curve as possible. In practice, the best way to do this is to find proxies for willingness-to-pay that are easy to observe and that customers will accept.

I suggest you go read Dixon’s full post to get his quick lesson on the demand curve.  He provides some fantastic theoretical and real world examples  from business you are familiar with.  

Dixon’s post is well worth the time spent understanding how the details apply to your situation.

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The person you’re about to fire is going to quit anyway

There is an awful lot to be said about firing people.  As an entrepreneur the #1 advice you will get from experienced mentors on this topic is hire slow, fire fast. This advice is clear, concise, and spot on.  However, as Chris Dixon states in his blog post: Firing is Awful.

Dixon, one of the most insightful entrepreneurs of our time, states the following:

It would be great if startups were all about growth, hiring, and success. But the reality is that founding a company is a brutal job and lots of the pain gets passed down to employees. Creative destruction sounds nice in textbooks, but in the real world it means telling friends to go home, stop getting paid, and find new jobs.

Firing is not easy, but as Dixon points out, it is more than likely the case that the person you’re about to fire is about to quit anyway (click here to tweet this). So don’t let feeling bad, stop you from making you both feel better.

Dixon has 4 other smart insights on the subject of firing on his blog.  Please read his full post here to get them all.

Go vertical then horizontal

This morning I was reading some of the old post of one of my favorite bloggers Chris Dixon.  Back in November 2012 he wrote a great post titled “Some problems are so hard they need to be solved piece by piece” and talked mostly about the Craigslist conundrum.  Essentially this conundrum is that Craigslist seems like an easy target for startups since there has been so little innovation on the platform.  However, entrepreneurs who have attacked Craigslist by trying to recreate a horizontal platform have mostly failed in comparison to those of have gone after vertical pieces of the classified market.

The secret sauce here is all about focus.  When starting a new company, your focus is probably your only advantage over your competition.  Chris Dixon states:

The benefits of focusing are: 1) you can create a dramatically better user experience when it’s tailored to a specific use, 2) you can do unscalable hacks when starting out (e.g. AirBnb paying photographers to take pictures of apartments), 3) you need far fewer users to get to minimum viable liquidity, and 4) brand building is easier when you solve a straightforward, narrow problem (e.g. “I need a place to stay this weekend”).

Read the full article here.