Hey bootstrappers,

>> Is there anything trickier to get right than pricing?

While higher prices can convey a premium product or service (see Apple), lower prices can indicate bigger bang for your buck (see Costco). 

What matters is customers’ perceived value. With everything considered – price, product, support, and so on – will they feel like they’re getting good value?

You won’t know unless you ask them. But be careful who you speak to. Only your ideal customers (who benefit most from what you do) are qualified to answer. You don’t want casual or low-value customers skewing the data.

In the meantime, read how this week’s founders landed on the right monetization models for their businesses. You might find them useful.

Chris Roper

Managing Editor

How to Dominate an Industry: Work For Free and Ask Your Clients to Pay You in Insights

Michael Mota’s journey to half a million dollars in revenue started with a free product and ended with securing one of the biggest US real estate companies as a customer.

Michael Mota, a Dominican national, spent his late teens building websites for clients in the US. Believing property to be an underserved market, Michael pitched Mr. Home, one of the biggest real estate companies in the Dominican Republic (DR), a website with a free feature.

This basic property management feature snowballed into a full-scale CRM called Alterestate. Until he’d built it, the DR had virtually no proptech at all, which exacerbated a lack of trust in the market. Today, he charges $49 for each agent and now counts Keller Williams as a client.

“I built the tool in a month and the people at Mr. Home liked it. Then I started meeting with them two to three times per week to learn about the business. They paid me with their knowledge which I thought was more valuable than the money.”

Acquisition advice

1. Spotting an underserved market. The Caribbean real estate market was hot, and yet its operational model was stuck in the past. Michael wanted to fix that.

2. Offering free features on top of paid. Michael tested new features by offering them for free, receiving feedback that helped him build the CRM realtors needed.

3. Scaling pricing to need. The more agents per subscription, the lower the price per agent, giving Michael and his clients economies of scale.

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How Do You Rewrite the Narrative for Obituaries While Competing Against an Established Player in the Marketplace?

Mary McGreevy’s digital obituary service, Epilogg, gives a lasting memorial to people’s loved ones. It's free to post and view obituaries – with the option to buy Epilogg extras.

When Mary McGreevy went to publish her mother-in-law’s obituary in the newspaper, the cost shocked her. How could people honor their loved ones with prices in the thousands of dollars? It seemed crazy when so many industries had reduced costs thanks to technology.

After speaking to friends, Mary sketched out a plan for a digital obituary service that ditched Facebook’s privacy concerns and Legacy’s clinical interface. She lost time finding the right coders who understood the brief, but today, Epilogg serves obituaries to over 300,000 users.

“We know that when a loved one dies and you have to manage their accounts. You’re suddenly hit with upcharges and security and passwords. It’s all overwhelming. We didn’t want to burden customers. The site had to be pretty, clean, and intuitive.”

Turning points

1. Gathering data about the industry. Epilogg succeeds in putting customers first because it addresses problems with Legacy’s service and business model.

2. Launching fast for feedback. Mary and her cofounding team wouldn’t have built such an effective product had they waited for it to be perfect before asking for feedback.

3. Securing strategic partnerships. Having an ex-newscaster on the team helped win early partnerships with media sites and even a cremation provider.

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This Ukrainian Founder Proves That Getting Started Beats Waiting For Perfection

Oleksandr Gamaniuk lives by the “done is better than perfect” mantra. Not only on product iteration but monetization – experimenting with different models to find a sustainable one.

In 2016, Oleksandr and his wife invested their time and savings into building a chatbot marketplace for social media scripts. When chatbots fell out of fashion, they researched the market for an industry that had yet to take advantage of chatbot technology: recruitment.

Today, Tarta autonomously interviews candidates and searches the market for job openings. It also aggregates the job market, receiving over 2 million monthly website visitors. Oleksandr tested three monetization models before finally settling on placement fees and job ad clicks.

“We tried four or five different business models. It was complex to figure out the right way to generate revenue. From the outside, it might seem obvious to charge job seekers for the service. But on the inside, there are so many different ways to bring in revenue.”

Turning points

1. Researching how to succeed at entrepreneurship. Oleksandr spent years learning about entrepreneurship before The Four Steps to the Epiphany inspired him to begin.

2. Searching for new applications for his technology. While chatbots fell a little out of fashion for social media, Oleksandr found an untapped market in recruitment.

3. Publishing public job listings to generate traffic. Aggregating multiple recruitment databases drove job seekers and recruiters to his website – an audience for his monetization experiments.

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