The founder's guide to pricing (without the awkward questions)

I thought I was going to literally choke.

I was on a customer research call, and it was time to ask about pricing. I had my questions ready:

• "At what price would you consider this a bargain?"

• "At what price would you consider this good value?"

• "At what price would you consider this premium?"

My throat went dry. I couldn't get the words out.

7 years later, now I know that discomfort was trying to tell me something important: those were the wrong questions to figure out pricing for a startup.

Let’s dive in!

Method deep dives

1. Calculate the status quo tax

What it tells you: The full picture of what customers are already spending to solve (or live with) this problem.

When to use this method:

• You're replacing existing solutions

• Your solution saves time/money

• Customers are cobbling together workarounds

How to do it:

1. Map current solutions:

   • Tools and subscriptions

   • Employee time

   • Contractor costs

   • Manual workarounds

2. Calculate total costs:

   • Direct expenses

   • Time costs (hours × rate)

   • Opportunity costs

   • Hidden costs (errors, rework)

Real example:

In applying this methodology, one founder in the Founder-Led Marketing Club (FLMC) discovered their target customers were spending $2,000 / month on freelancers. Plus, they were investing their own time, often on nights and weekends, to correct the bad quality work.

This made this founder’s $500/month solution an obvious investment. In fact, the founder realized that she needs to, and can, raise her prices, drastically improving her margins. The key wasn't just showing the benefits of their solution—it was helping prospects see both money and time they are spending with their status quo i.e. their status quo tax.

How it informs real offers:

• Helps set price points

• Identifies budget sources

• Shows clear ROI

2. Analyze problem impact

What it tells you: How urgent and important the problem is to solve. Many founders join the Founder-Led Marketing Club (FLMC) at the concept stage i.e. they are still validating their idea and building their initial solution. This is the first, and most important step, I recommend to these founders so we can not only validate the problem with real customers, but also inform the pricing strategy.

When to use this method:

• Pain-driven solutions

• Quality-of-life improvements

• High-emotion problems

• First step to inform real test offers

How to do it:

1. Measure frequency and severity

2. Track ripple effects

3. Map business / life impact

4. Identify emotional toll

Real example:

In applying this method, a founder in my portfolio building operations automation software uncovered:

• CFO has to prepare a quarterly board report

• 1 team member spends 3 weeks, and several others support

• Inaccurate reports, missed optimization opportunities

• Personal embarrassment for CFO, high stress for full team

This problem impact analysis means they can position their initial product as a solution to the board report problem — allowing them to immediately deliver impact. Then, they will expand to automate other aspects of the workflow to not just report, but reduce cost (a critical company metric the CFO is responsible for).

How it informs real offers:

• Guides positioning

• Informs product roadmap

• Justifies pricing

• Identifies urgency triggers

This method is really powerful in addressing many mental barriers new founders deal with around sales and money. It enables a mindset shift from selling to problem-solving for our dream customers.

3. Study market signals

What it tells you: How the market currently values similar solutions and what drives pricing in your category.

When to use this method:

• Competitive markets

• Established categories

• Premium positioning

Different signals to study:

1. Competitor shadow pricing

• Review pricing for similar solutions

• Document pricing structures

• Consider feature/price relationships

• Identify premium pricing justifications

• Note pricing relationship to positioning

2. Adjacent solutions

• Research complementary tools

• Study related product categories

• Analyze pricing models

• Identify workflow overlaps

• Note collaboration opportunities

3. Customer sentiment

• Connect with competitor customers

• Join niche groups

• Attend industry events

• Study public reviews

• Monitor social discussions

4. Market standards

• Industry pricing benchmarks

• Common pricing models

• Standard feature sets

Real Example:

When Ashley Chang, CEO of Sundays and member of Founder-Led Marketing Club (FLMC), was deciding how to set pricing, she used this method. She looked at how other executive assistant solutions were pricing. She layered on two important factors: (1) their target audience is busy, working parents, (2) Sundays differentiator is on quality, not price.

Using this market signals method helped Ashley design plans that made sense both for her business, and her dream customers. Sundays recently surpassed $1M ARR. Check out their story here.

How it informs real offers:

• Suggests pricing models

• Shows price ceilings

• Discover category deal-breakers

• Reveals positioning opportunities

• Builds founder confidence

4. Ask strategic questions

What it tells you: How deep customer insights - such as their current alternatives and how buying decisions get made - can inform real test offers.

When to use this method:

• Complex sales cycles

• Multiple potential segments

• When getting started

How to do it:

Conduct, what I call, research-sales calls*, with the dual purpose of customer discovery and getting early customers. During these 30-minute conversations with dream customers, ask them strategic questions about their past behavior:

• How are you currently solving for <problem> / have in the past?

• What is your workflow for it? How much time goes into it?

• What tools and resources do you allocate to it?

• What do you use for <adjacent problem>?

• How much did you spend on <category> last year?

• How did you evaluate purchase of <closest competitor>?

• How much have you budgeted for this year?

Real Example: One founder in the Founder-Led Marketing Club (FLMC), joined after she had built a software solution. She was struggling to generate revenue, despite lots of activity (talking with customers, regular content creation).

I advised this founder to start running research-sales calls* - shifting from general conversations to asking strategic questions. Few weeks later, we used the insights from those conversations to design a specific offer for one segment. This offer is in the $2,500 range that she had never anticipated. The key wasn't just gathering information - it was asking strategic questions that revealed real monetization opportunities.

How it informs real offers:

• Reveals their status quo tax (method 1 above)

• Guides real test offers (method 5 below)

• Reveals specific segment and positioning

• Informs website and communication flow

• Shapes sales process

Asking strategic questions is one of the most reliable ways to inform real test offers (next method).

* I will do a future newsletter dedicated to how to run research-sales calls. Respond to this email with any questions you have about when/how to conduct those.

5. Test real offers

What it tells you: What customers will actually pay (the ultimate validation).

When to use:

• Always - this is the goal

• Start simple and iterate

• Test as early as possible

• Use other methods to inform offers as needed

Different approaches to test real offers:

1. Full product at target price

Best for: Startups with significant funding to build a high-quality product
Example: Superhuman charged $30/month from day one, even during early access. This helped them validate both their price point and target market.

Caution: Most founders cannot take this approach because they do not have sufficient funding. Additionally, I do not recommend this approach as it is impossible to get the product ‘right’ in the first iteration. Superhuman, too, has continued to evolve their product. Significant funding is needed to continue this iteration.

Other approaches will enable founders to (1) first discover the core value proposition (approach 4, 5 6), (2) generate revenue via pre-sales (approach 6), (3) deliver value with services first (approach 2), or build feature by feature (approach 3).

2. Services first

Best for: Complex technical solutions, revenue-funding business
Example: Stripe manually processed payments before building their API.

How it works:

• Use pre-sales strategy (number 6 below)

• Deliver value with services

• Learn what to build

• Switch customers to tech

• Launch tech solution

3. Feature by feature

Best for: Complex products, high price points
Example: Tesla started with basic driver assistance features, then built towards full autonomy.

How it works:

• Start with core value proposition

• Add features based on customer feedback

• Increase pricing as you add value

• Keep early customers grandfathered

• Test price sensitivity in real-time

4. The "fake door" test

Best for: B2C SaaS, early validation, new concepts

How it works:

• Create landing page with pricing tiers

• Add "Buy Now" buttons leading to waitlist

• Be transparent about coming soon status

• Use click data to gauge price sensitivity

• Convert interest into pricing discussions

5. The coffee shop approach

Best for: B2B solutions, high-touch products, enterprise
How it works:

• Show prototype or mockup

• Present planned pricing

• Ask about expected features at price point

• Learn value hierarchy

• Gather pricing objections early

6. Pre-sale strategy

Best for: Solutions with clear value proposition
Example: Several founders in the Founder-Led Marketing Club (FLMC) use this methodology. To name a few: a mom founder building a solution for summer camp planning; a b2b founder automating

How it works:

• Run research-sales calls

• Discover the clear value proposition

• On the call ask, “does this sound like something you’d use?”

• Be prepared with real test offers

• Gets firm commitments

• Provides early revenue

• Creates committed beta users

Common combinations

While testing real offers is always the goal, here are common ways founders in the Founder-Led Marketing Club (FLMC) have used multiple methods:

For new categories:

1. Analyze problem impact → Understand value

2. Calculate status quo tax → Quantify opportunity cost

3. Test real offers → Validate with service first

For enterprise sales:

1. Ask strategic questions → Understand buying process

2. Study market signals → Set pricing strategy

3. Test real offers → Feature by feature

For consumer products:

1. Analyze problem impact → Find pain points

2. Study market signals → Understand pricing norms

3. Test Real Offers → the ‘fake door’ test

For competitive markets:

1. Study market signals → Map competitive landscape

2. Calculate status quo tax → Find pricing gaps

3. Test real offers → Position differentiated solution

Quick reference guide

Common challenges & how to get support

While this guide provides a strong foundation, most founders face common challenges when implementing it. Below are the most common ones I get questions from members of the Founder-Led Marketing Club (FLMC) around.

1. Which method should I use? Consider:

• Are you solving a clear pain point?

• Do similar solutions exist?

• How complex is your sales process?

• Have you validated problem and positioning?

• Is generating revenue a priority for you?

2. How do I know I am doing it right? Consider:

• Expected sales cycles

• Market and competition

• Specific metrics for your startup

• The time and money you have

• What brings you joy

3. When should I start testing? The simple answer: As soon as possible. The sooner you test real offers, the sooner you validate if you have a business or just an idea. Many founders struggle with this due to fear of failure or money mindset challenges. All this is normal. However, in order to build a business, we have to figure out how to get over the awkwardness and take a structured approach to test real offers.

The bottom line

Ultimately, every founder has to figure out a real offer to test. The sooner you do it, the sooner you can truly validate if you've got a real business or just an idea. The methods in this guide provide a framework for getting there.

But here's the truth: pricing is one of the most important yet complex parts of building a business.

You don't need to do it alone.

In the Founder-Led Marketing Club (FLMC), you get:

• Accountability to keep testing

• Peer support from founders on the same journey

• Hands-on guidance from a go-to-market specialist

• Frameworks for every stage from concept to 100 Happy Paying Customers

Join other ambitious underestimated founders in the Founder-Led Marketing Club testing real offers on their path to their first $1M. I have 3 spots open right now for hands-on assessment and action planning for your startup.

Here’s to building thriving businesses powered by Happy Paying Customers 🚀 

Rooting for you!
Sweta

P.S. Already testing pricing with customers? Reply to this email and let me know how it's going. I read and respond to every message.