November 26, 2021

Being hyper intentional about the logic of the work


Price is a story. It’s an expectation. A social signal and framing device.

Charging real money for your work makes an implied statement to your audience that you are offering premium content.

That’s the fundamental tenet of pricing psychology. People value things they pay for, and place little stock in that which is free. In fact, not charging people for your work is a disservice to them.

Because if they don’t part with cash to get it, they will value it less, which means they will get less use out of it, which means their life won’t be as improved as it could be had they put their money on the line.

What signal is your price sending?

Prolific was a stretch for me as an entrepreneur. Not only technically, but also psychologically. And that was a good thing. As my team began developing our technology, for the first time in my career I was forced to be hyper rational and intentional about the logic of how the business sustained itself financially.

Starting with some context around price. My accountant friend recommended doing some research on software subscriptions and the people who paid money for them. He said this would help me see where our software offering fit within the total addressable market, if at all.

And if the numbers told the right story, he said, there would be no doubt in my mind as to whether this business could become profitable.

Now, as a historically gift economy based artist, someone who traditionally gave away everything he made away for free and usually saw some kind renumeration down the line, the numbers actually blew my mind. Here are a few statistical highlights you might enjoy.

*The average spend per each employee of software subscriptions is over two thousand dollars, which is higher than the cost of a new laptop.

*Organizations with eight hundred or more employees are now spending fifteen million dollars on software subscriptions, using over a hundred and fifty apps across the organization.

*The average amount today’s young professionals spend every month on subscription services is well over two hundred dollars.

After learning those numbers, here’s what my thought process was. Wait a minute, so, the users of my software are going to get unlimited access to a massive and exclusive warehouse of personal creativity management tools, plus daily emails from me, combination of which will equip them become more prolific?

At eight dollars a month, they can’t say no. Hell, just being able to tell their friends and coworkers that they now have a secret weapon that gives them a creative edge in their work, that social return on investment offsets the financial cost of the product almost immediately.

Anyway, that’s my story about price. And what’s interesting is, I really had to tell and sell that story to myself first. Before our software had a single paying customer.

Have you done that for your own brand? Have you made yourself a believer with the first sale, so that you might go out and make disciples of all nations, baptizing them in the name of your brand vision?

If it sounds grandiose and hyperbolic, you’re right. But you have to sell yourself on yourself first before anyone else buys.

What return on investment would offset the financial cost of your product immediately?