When we pay for things, we expect to receive a specific value from the purchase. Sometimes that value is obvious, like a bar of soap or light bulb and other times it’s not. When it’s not and if there is too much perceived risk of not achieving the intended value, sometimes the seller has to offer an “insurance policy” in the form of a money-back guarantee or even not get paid until the value is confirmed (ie – contingency or success fee).
Many of us that sell products have learned about value-based pricing and the benefits from pricing our product based on the value the customer actually receives. But I’m still amazed at how infrequent I see this done by startups and early stage tech companies. Whenever I meet with them in an advisory capacity and pricing strategy becomes a topic of conversation, I always launch into an exercise I refer to as “extreme value-based pricing”. In this article I’ll explain the fundamental concept so that you can decide on your ideal pricing strategy and related pricing metric.
It’s amazing how success can cause numerous blind spots for managers and executives. The greater the success, the more severe the blind spots. As an advisor I sometimes poke on these blind spots only to get a reaction like “Hey, we’re doing really well, what’s the problem?” Well, it can be a big problem for multiple reasons that can backfire on you later if you’re not careful. Let’s explore further.
“I never failed once. It just happened to be a 2,000-step process.”
Almost no investor wants to be the “first check written” for your round of funding. This makes total sense if you think about it from their perspective. If you don’t secure any other investors, they are in big trouble because you needed a certain amount of money to remain viable and now their investment is already 
What do buying a new smartphone and being given a gift card have in common? In both cases you want to extract value as soon as possible. With the gift card you immediately want to go shopping and with the new smartphone you immediately want to port over your contacts and download your favorite apps so you can start using it.
I didn’t invent this quote (can’t remember where I heard it) but what a great one to help remember that with most business-related transactions, price is definitely not the only factor. Three such transaction types relate to the things I commonly write about on this site:
“If you fail to plan, you are planning to fail”
“Desire is a contract you make with yourself to be unhappy until you get what you want.” 
Every field of study has its basic vocabulary of words and phrases that come up over and over again. This vocabulary is so fundamental that it is used to explain other concepts that are more advanced. Well, fundraising is no different. This article is intended to serve as a primer of sorts with a description of ten basic terms that must be understood by any startup pursuing fundraising.
“If you can’t explain it simply, you don’t understand it well enough”
You built your MVP, got it launched to the delight of some paying customers and just raised some seed funding to move to the next phase of your company’s evolution. You and your co-founder have been doing all of the selling (closing deals) but neither of you has real experience as a sales professional, so you decide it’s time to hire one. Easy, right? Well, maybe not as easy as you think. Forget the recruiting process for a moment and take a step back. Should you first hire a sales rep or a sales executive? How will you compensate them? How will you know if they are performing well? Let’s explore further.
How can something that’s free and openly available cause so much unintended harm to your business? The availability of open source software has contributed as much to lowering the cost of starting a software company as cloud hosting services. So much so that it’s not unusual to find software companies with 40% or more of their code attributable to open source software. But too many startups learn later as they’re in the middle of due diligence from a big acquirer that their practices for using open source software created significant problems – including reducing the acquisition price or, worse, killing the deal.
Regardless of your ideal mix of demand generation programs, I’m willing to bet that most of them are designed to bring prospects to your website in the hopes of later converting them to a paying customer. It doesn’t matter if your solution is hardware or software and it doesn’t matter if your sales model is zero touch or requires full-blown field sales reps. The path to prospect conversion surely passes through your website at least 90% of the time.
Most startups desperately crave a partnership with a big, strategic player that could offer them significant leverage and credibility. Just think about the giants in your particular industry. That’s who I’m talking about. But they are huge and you are tiny, so how do you secure a real partnership in which they actually utilize their size and influence to help you? Too many startups only think about the benefits they will get from such a partnership when the only way to get the partner to even lift a finger is to provide real value to THEM.
