Pricing Experiments You Might Not Know, But Can Learn From

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At the August 14 Startup Product Talks SFBay meetup, Teresa Torres, VP Product at AfterCollege, discussed critical insights derived from cognitive reasoning and brain science research during her presentation on How To Make Better Product Decisions During the Q&A, there was a discussion around pricing issues.

Colin Whooten posted:

“Great conversation last night, thank you everyone! Here is an excellent article on pricing that I thought many would find interesting, it provides a high level summary of a lot of different surprising observations and links to where you can learn more.”

StartUP Product‘s insight:

By Peep Laja

Asking people what they’d pay for and how much rarely works;

1. people will tell you what they WANT to pay—which is obviously much less than what your product or service is actually WORTH.

2. what people say and what people do are very different things.

3. people really don’t know how much things are worth or what’s a fair price

4. People have trouble comparing different options 

Dan Ariely’s book Predictably IrrationalThe Hidden Forces That Shape Our Decisions and TedTalk: Are We In Control Of Our Own Decisions?

5. In our minds, physical magnitude is related to numerical magnitude.

6. Nothing is cheap or expensive by itself, but compared to something.


1. What’s the best way to sell a $2000 wristwatch? Right next to a $12,000 watch.

2. Start throwing out high numbers. Add some very expensive products to the selection (that you don’t even intend to sell).

3. If the final price of your service / product is a result of negotiations, start high.

4. If you’re competing on price, state how much others are charging before revealing your price.

Pricing Approaches

Pricing Perceptions

If you want to charge more than the market average, look at the competition: how they package their offering; what’s the user experience like, and change that.

If you look like a new category, people are more likely to pay up.

On the other hand, if you can profitably sell something much cheaper than the other guys, great. Use their pricing as the reference point and you’ll win.

Consider more than price

When customers consider “what something costs”, they’re actually measuring three main drivers:
1. money (cost),
2. time  (how long will it take to learn?)  and
3. mental energy(how much do I have to think about this?)

About The Author

Peep Laja is an entrepreneur and conversion optimization expert. He’s been doing digital marketing for 10+ years in Europe, Middle East, Central America and the US. He has extensive experience across verticals: in the past he’s run a software company in Europe, an SEO agency in Panama, real estate portal in Dubai and worked for an international non-profit. Today he runs a conversion optimization agency Markitekt.

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Product Development Methodologies | Cloud City Development

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By Chuck Fitzpatrick
Agile Evangelist and Project Manager
Cloud City Development

StartUP Product‘s insight:

Excerpted from Chuck’s posting


Question: What’s the best methodology?
Answer: It depends.

In the early decades of software development, the emerging industry followed the models of engineering that had served the world well for all of modern history. Collectively, those methodologies can be described as “anticipatory.”

As time passed, the software development community found that many large projects failed because those assumptions proved to be largely incorrect. Product consumers have no idea what they want—they change their minds constantly, so our ability to predict what they want is . . .impossible.

There have been many attempts to address the underlying issues that cause failures in product development, whether they are software or non-software products. The attempts that are proving to be successful turn those earlier assumptions on their heads:

1. Make implementation a part of requirements discovery

2. Incrementally grow the system

3. Flatten the cost curve: If you can keep the cost curve flat, then not knowing what to build today is less of a concern, since the cost to build it later, when you know more, is the same.

I am fascinated with the many ways that humans have created to make the difficult bits and pieces of creating new products move forward in the best possible manner.

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Live Broadcast: Stephanie Geerlings On Scaling Teams And Startups

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Stephanie Geerlings

Stephanie Geerlings, Builder, Hacker, Entrepreneur, Product Manager, and Prime Minister At Cloud City Development Discusses Scaling Startup Teams And Companies On The Global Product Management Talk Podcast


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Stephanie Geerlings, Builder, Hacker, Entrepreneur, Product Manager, and Prime Minister At Cloud City Development Discusses Scaling Startup Teams And Companies

At companies that need to scale people there are a few components to take into account; 1. Prove that you are as useful an organization to them as they are to you. 2. Do meaningful work and start an initiative that people want to be a part of. 3. Appreciate people, yourself, and the huge power that your company can grow to be.

Stephanie Geerlings, Builder, Hacker, Entrepreneur, Product Manager, and Prime Minister for Cloud City Development, has grown companies from $3k-3M+ and teams from 3-50. She’s built software, hardware, large steel machine sculptures, and has done 3-D, print, and web design and branding for Fortune 500s. Stephanie’s values are core to how she works. She’s overly honest, cares about intention, and believes in people. “Our work is to solve problems. Problems get solved—by thinking it through and applying best practices in a flexible way. Not all clients’ requirements are the same. We design and engineer the solution.”

Stephanie Geerlings joins host, Cindy F. Solomon, on Monday, August 12, 2013

About Stephanie Geerlings

Stephanie Geerlings, Builder, Hacker, Entrepreneur, Product Manager, and Prime Minister for Cloud City Development, has worked in technology & design for 10 years and believes that good engineering and design should be done with artistic and scientific methods. She strives to be whole-minded, collaborative, and flexible. She knows how to respect multiple viewpoints, communicate with various stakeholders, and execute on both exciting and mundane tasks. Stephanie has grown companies from $3k-3M+ and teams from 3-50. She’s built software, hardware, large steel machine sculptures, and has done 3-D, print, and web design and branding for Fortune 500s. Because of her background on various quickly moving projects she used to claim that the startup life was the easiest she’s ever experienced. Stephanie’s values are core to how she works. She’s overly honest, cares about intention, and believes in people. “Our work is to solve problems. Problems get solved—by thinking it through and applying best practices in a flexible way. Not all clients requirements are the same. We design and engineer the solution.”

About Cloud City
Cloud City Development is a full-service digital product consultancy. We follow modern software development best practices while crafting a solution for your specific needs. Our designers and fullstack Rails developers each have 5-13 years of experience building great software for the web. We are at your service for product development, team augmentation, scaling, MVPs, and CTO consulting.


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Why Founders Fail: The Product CEO Paradox | TechCrunch

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This happens all the time. A founder develops a breakthrough idea and starts a company to build it.

StartUP Product‘s insight:

By Ben Horowitz

Co-founder and partner ofAndreessen Horowitz

Quoting Ben’s points:

3 Main Reasons Founders fail to run the companies they created:

  1. founder doesn’t really want to be CEO
  2. board sees CEO making mistakes, panics and replaces them prematurely
  3. Many founders run smack into the Product CEO Paradox
Product CEO Paradox
Problem: CEO was only world-class at the product, so they effectively transformed themself from an excellent, product-oriented CEO into a crappy, general-purpose CEO
Prevention: great product-oriented founder/CEOs stay involved in the product throughout their careers

Product-oriented CEO’s essential involvement consists of at least the following activities:

  • Keep and drive the product vision
  • Maintain the quality standard
  • Be the integrator
  • Make people consider the data they don’t have
How do you back off gracefully in general without backing off at all in some areas?
  • formally structure your product involvement, i.e. transition from your intimately involved motion to a process that enables you to make your contribution without disempowering your team
  • Write it; don’t say it.
  • Formalize and attend product reviews
  • Don’t communicate direction outside of your formal mechanisms

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This I Believe

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Posted by Marty Cagan on July 31, 2013 at


StartUP Product‘s insight:

Quoting Marty Cagan’s points:

  • rapid and constant evolution in technology provides hope that we can continue to solve important problems for people and our world.
  • passionate leaders…are the people that make an impact in the world, and I want to help them achieve their vision.
  • to be effective in helping people and organizations improve, you need to be honest.
  • Successful teams are comprised of these sorts of people (smart, willing to work hard, passionate about what they do, and sincere about wanting to improve), and the world needs as many as we can find.
  • the accomplishments I feel proudest of today are not the actual products I helped create, but rather, the many people across our industry I have helped to hire and develop…I love seeing them creating exceptional products, and leading great organizations of their own
  • I believe in continuous improvement. I try very hard not to get too attached to, or to be too closely associated with, any particular school of thought or technique

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How To Make Better Product Decisions

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The remarkable thing about your mental life is that you are rarely ever stumped.”  – Daniel Kahneman It’s Thursday morning. You settle into your office chair, you crack open your laptop, you take a…

StartUP Product‘s insight:

Great posting from Product Talk by Teresa Torres!

Teresa discussed this in person over great beer and refreshments on Wednesday, August 14, 2013 Startup Product Talks meetup at Atlassian

[View the story “#StartupProduct: How To Make Better Product Decisions” on Storify]

Teresa is also speaking on Friday, October 11, 2013 Startup Product Summit SF2! Register today for best price!

Startup Product Summit SF2 is one event during Product Weekend San Francisco, starting with trainings on Thursday, Summit on Friday followed by AfterParty, then Product Camp San Francisco on Saturday all at historic Broadway Studios! Follow blog to stay updated at

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Should CMOs own product development?

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Marketers often talk about the distinction between consumer and B2B marketing when it comes to tactics and strategy, as well as individual background.

StartUP Product‘s insight:

A very different perspective coming out of Australia!


CMO = Chief Marketing Officer

CPO = Chief Product Officer

CBO = Chief Brand Officer

  • leaders on both sides of the fence usually share a history of roles in product management and marketing.
  • As the voice and direct link to the customer, CMOs are in a unique position to also help craft products that meet those customer needs in a responsive way
  • all CMOs must be integral to product design
  • CMO should have a seat at the top table as one of the development team
  • marketing chiefs should be the voice of the customer and be responsible for defining the customer archetypes and then synchronising the brand experience across digital, social, marketing, online, mobile and product
  • Making sure you have products that are measured upon customer experience – VPs responsible for customer experience, customer feedback and business intelligence reported to the CMO.
  • experience in product management has given her the tools to take a holistic view at the software-as-a-service collaboration provider
“Without the pillars of product marketing, program development, digital, pricing and product management and development, I wouldn’t be as successful,” she claimed.

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Your MVP is About Discovery – Not Product

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Many entrepreneurs believe the key to an MVP is identifying the right minimal features for the right customers. It turns out this is mostly a fool’s errand because an MVP isn’t about product feat…

StartUP Product‘s insight:

Thanks to Tristan Kromer @Triko for tweeting this posting written by Kevin Dewalt!

Tristan is speaking at the Startup Product Summit SF2 on October 11, 2013 Register today for best price!

Salient points:

  • In the real world people selectively listen in conversations, give us inconsistent feedback, change their minds, and think about problems differently. Products are difficult to scope and hard to build.
  • Don’t fall in love with my process – fall in love with the Big Idea – Steve Blank, Beijing 2013
  • Startups are about discovery: searching for a scalable model, not executing on an idea.
  • your MVP – as a product – is going to suck.
  • some of the most passionate people you meet in interviews never even try the product. Apathetic – and even very negative – people may become your most passionate customers when they start using a product.
  • building an MVP will help you discover about you
  • stop worrying about the ideal set of product features and make your best guess with the information you have and get an MVP – however you define it – in the hands of customers. It’s the only way to keep the Discovery process going.

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The UX of Teaching UX

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Tell me, and I will forget. Show me, and I may remember. Involve me, and I will understand. – Confucius, BC 450 Sounds good, right?  Confucius had a way with words.  However, reality is more murky …

StartUP Product‘s insight:

UX is a huge part of Product Management, and this pensive post from Glen Lipka, VP User Experience for Marketo, prompts us to think about how we teach others the skills we have honed over the years.

Particularly in an arena that’s still developing, where many of us learned by doing and don’t necessarily have a mentoring experience to fall back on as an example, it can be tricky to figure out the best way to pass the fine details of our craft on to newbies.

Glen makes clear he has more questions than answers on this particular topic, and I understand why.  It’s a perfect topic for conversation at Startup Product Summit SF2, though.  In fact, questions like these are a large part of the reason Startup Product exists.  To create an environment where we can discuss and debate, teach and learn, and perhaps even learn how to teach.

Glen is a speaker at Summit SF2, and we’re excited to have him.  Join us October 11, 2013, to hear what else he has to say.  Register at:

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Lean startups should “pivot” on product and strategy, but not on passion – Chris Hoogewerff

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Some entrepreneurs and builders are driven by the prosp […]

StartUP Product‘s insight:

We’ve learned a lot about creating great products from the Lean movement, not surprisingly in the ‘measure’ and ‘learn’ steps of the ‘Build, measure, learn’ cycle.  In this thoughtful article, Chris Hoogewerff proposes a 4th step.  He argues convincingly that it’s vital to maintain passion even after major pivots, and when we pivot to something that departs too much from that “thing” that compelled us to create our startup, we may be in trouble.  To paraphrase, the litmus test could come in the form of a ‘Visualize’ step where we ask ourselves, ‘Do I love this new product and will I be fanatical about serving the people that will use it?’

Join us October 11, 2013 for Startup Product Summit SF2 to connect with lots of others that are passionate about product.  Register:

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