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Product Strategy: Nailing Your MVP and Pricing


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In this presentation to University of California Santa Barbara (UCSB) Technology Management Program, Jim Semick of Product Discovery describes how you can use market validation to discover your MVP and Pricing.

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Product Strategy: Nailing Your MVP and Pricing

  1. 1. Customer Discovery: Nailing Your MVP and Pricing Jim Semick UCSB TMP ENGR 190D (Creating a Market-Tested Startup Business Model), March 2013
  2. 2. How Did You Decide Your MVP and Pricing?
  3. 3. Case Study:
  4. 4. The Challenge • 50+ competitors in the online meeting space • Well-known #1 competitor • Us: A small team with limited resources
  5. 5. Market Validation Evidence from real customers before we build it
  6. 6. What we discovered about other solutions • Hard to use • Feature bloated • Difficult to budget with complicated pricing • Pricing was a disincentive to using solution
  7. 7. Weeks of Business Model & MVP Discussions
  8. 8. MVP Feature Them Us Screen Sharing Video VoIP Recording
  9. 9. Pricing • “All you can use” pricing • Unlimited meetings for monthly subscription • Participants free We aligned pricing with customer values Pricing became part of our Purple Cow
  10. 10. More Interviews Would they actually buy it?
  11. 11. Tips for Discovering the MVP
  12. 12. Focus on a Narrow Market Segment
  13. 13. Interview to Get to MVP 1. Explain the solution and features. 2. Explain what it will NOT do for them. 3. Ask if they will buy. 4. Iterate. Iterate. Iterate.
  14. 14. Define Your MVP Then cut it in half.
  15. 15. Tips for Discovering the Right Price
  16. 16. Align Pricing with Customer Business Value
  17. 17. (Sort of) Ignore the Demand Curve Quantity Price$$ Buyers are Irrational
  18. 18. Perceived Value Matters
  19. 19. Tip #1 Make Sure You are Talking with a Decision- Maker
  20. 20. Tip #2 Ask: “Will You Buy?” Then Listen
  21. 21. Tip #3 Ask what they think is a fair price
  22. 22. Tip #4 Have them do the ROI calculation
  23. 23. Tip #5 Negative Sell
  24. 24. Top Pricing Mistakes
  25. 25. Pricing Mistake #1 • Building your product (and burning cash) without a pricing model Please don’t give it away for free while you figure it out
  26. 26. Pricing Mistake #2 • Pricing based on your costs rather than customer value
  27. 27. Pricing Mistake #3 • Pricing using the same structure as the competition
  28. 28. Pricing Mistake #4 • Acquisition costs that are higher than lifetime value
  29. 29. Thank You!