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Founder’s Round Discounts Example

Can pricing decisions travel through time? Do the offers we make today affect the choices we can make in 6 months? Or, of course, do I need to take into account what I charged 6 months ago when determining the price of my program today?

When people start something new, there’s often the same old dilemma:
1) Do I charge less now, when I’m new at this and my value is lower, even if that means I will undercharge when my value reaches its full potential?
2) Do I overcharge now, knowing I’m not that good yet so that I protect my future price, but risk being exposed as being less valuable than present?

None of these is good. Most people choose 1), and I agree it’s the better choice – that doesn’t mean it’s actually a good solution.**

A good solution is the so-called “founder’s round” fee – a temporarily lowered sum for a temporarily lower value.** When selling the “beta” version, the first thing you do is figure out the full price that will make sense somewhere in the future. Then, for the first round, you will charge little to nothing. For the second and (maybe third) rounds, you charge 30% of the price. For the fourth, you charge 60% and say it’s the last chance for a reduced price. From then on, you charge 100%.

Unplanned time travel can cause problems.

In order to keep things grounded, base your pricing decisions on the value you can offer today, not 6 months ago, or next year.

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