How should a company decide where to set its price level?

Fabien Pinckaers · Feb 12, 2025

Being the cheapest is a legitimate core value, and he would cut prices immediately if he could

He wants to commoditize the market and make technology affordable

42:00 20VC: The $5BN Company Built from the Belgian Countryside | The Story of Odoo: The Company with No Plans to Sell, IPO & Their Billionaire Founder Who Does Not Care About Money with Fabien Pinckaers, Founder & CEO @ Odoo

Fabien Pinckaers · Feb 12, 2025

If your goal is to commoditize a market and get every company onto your software, you must charge a very small price

Google Workspace and Microsoft Office are not expensive yet everybody uses them

Scope: concedes Andreessen's price-ambition link is true 'in a way'

42:25 20VC: The $5BN Company Built from the Belgian Countryside | The Story of Odoo: The Company with No Plans to Sell, IPO & Their Billionaire Founder Who Does Not Care About Money with Fabien Pinckaers, Founder & CEO @ Odoo

Ryan Petersen · Jun 20, 2026

Flexport should always price 10% below whatever competitors charge for freight, and undercut again if matched

Aggressive pricing to push the company to go bigger

67:35 20VC: Why Remote Work is White Collar Fraud | Why Revenge and Patriotism are the Best Founder Traits | Two Questions Every Founder Needs to Ask | The Wild Story of Raising $1BN from Masa Son in an Hour Long Meeting with Ryan Peterson, Founder @ Flexport

Ryan Petersen · Jun 20, 2026

In logistics you must be the low-cost leader rather than the premium provider — being cheaper takes all the market

He now believes his decade-long premium positioning was self-deception, adopted because automating the work and buying freight as cheaply as larger peers was too hard

Scope: a reversal of his own position over the past decade

71:54 20VC: Why Remote Work is White Collar Fraud | Why Revenge and Patriotism are the Best Founder Traits | Two Questions Every Founder Needs to Ask | The Wild Story of Raising $1BN from Masa Son in an Hour Long Meeting with Ryan Peterson, Founder @ Flexport

Lauren Schwartz · Oct 19, 2022

Pricing that isn't aligned to value — black box subscription and shelfware licensing models — is dying out.

42:25 Value misaligned pricing like shelfware licensing is dying out

Dharmesh Shah · Jun 13, 2022

The blanket advice to 'raise prices' is wrong, because in a subscription business price increases are one-way — overshooting forces you to cut prices for existing customers and take an immediate hit to ARR

If the right price turns out to be below what existing customers pay, the only reasonable answer is giving them the lower price, which cuts recurring revenue that investors care most about — which is why subscription companies almost never lower prices

28:34 Raising prices is risky in subscription businesses since later price cuts directly hurt arr

Matteo Franceschetti · Nov 20, 2023

Investors who push companies to cut prices to accelerate growth are wrong, because CAC does not fall linearly with price

Cutting price 20% doesn't cut CAC 20%; when your CAC is already very efficient it's extremely hard to move down, so you should hold price and add value and margin instead

16:40 Cutting price does not proportionally reduce cac so hold price and add margin instead

Matteo Franceschetti · Nov 20, 2023

Higher prices make a brand more aspirational and correctly signal higher quality, so companies should avoid price wars

Customers infer quality from price; once you enter a price war, especially with a physical good, the business stops working

19:47 Higher prices signal quality and build aspirational brand avoid price wars

Matteo Franceschetti · Nov 20, 2023

Founders overthink pricing changes — you can change price, including raising it, on the same day

As a startup almost nobody really knows your brand; you're not Apple, so the perceived cost of changing price is imagined

39:28 Startups can change price quickly since perceived brand risk of price change is imagined

Matt Plank · Dec 20, 2024

Companies should keep inching price up until they hit real friction — losing deals on price is the signal you've found the right level

You'll squeak out much more revenue by raising prices ~20%; if you keep winning and win rates only dip slightly that's fine, and until buyers walk away on price you haven't found the friction point

28:02 Raise price until you lose deals on price

Fabien Pinckaers · Feb 12, 2025

Cutting the price for small clients — from around €120 to €20 per user per month — while everyone else raised prices with inflation was their best decision

For a one or two user company €120 was still a real budget, so they were too expensive at the small end; after the cut acquisition boosted and they attracted 2.8x more clients

16:55 Segment price by customer size cut for small raise for large

David Schneider · Sep 11, 2024

Doubling street price and eliminating discounting modes was a key lever that doubled quarterly revenue at ServiceNow

He had confidence in the product's value because customers at the user conference gave the founder standing ovations and called it the best technology they'd ever purchased

22:13 Doubling list price and eliminating discounts can double revenue

Des Traynor · Jul 18, 2022

'Just raise prices' is silly advice; the right principle is to align price to value

You should capitalize on the value you deliver without squeezing every last drop, and ensure customers actually get the value you charge for

35:17 Align price to delivered value rather than simply raising prices

Amit Bendov · Sep 12, 2025

Customer complaints are a good signal — silence means people don't care, while complaints mean they want the product to work

Plenty of products people use and love, but when you ask for money they won't pay; the price has to be somewhat painful but not outrageous, since a dollar or a million would tell you nothing

8:59 Price should be painful but not outrageous complaints signal care

Thomas Plantenga · Feb 12, 2024 · hedged

Landing on the right price point involved real luck as well as analysis — the team deliberately set the buyer fee slightly higher than the maths implied and that fee now produces 85% of revenue and practically all gross margin

The product lead pushed to set it at 5% plus 70 cents to be safer rather than at the calculated point, and that judgement call turned out to carry the economics

9:47 Err slightly above the calculated optimal price for a safety margin

Yamini Rangan · Mar 18, 2025

Pricing strategy should attract revenue by maximizing market share and customer value rather than chase revenue maximization

Providing compelling value first — even lowering prices — attracts more customers, whereas most people treat pricing as a way to extract every dollar

44:22 Prioritize market share and customer value over revenue maximization