How to Price Your Product When You Have No Idea What It's Worth

Pricing a new product is uncomfortable because there's rarely a clean formula for it. Cost-based pricing tells you the floor, not the right number. Competitor pricing tells you what similar products charge, not what yours is actually worth to the people using it. Most founders end up picking a number that feels roughly reasonable and hoping it holds up.

Price against the outcome, not the feature list

The strongest pricing conversations start from what the product actually changes for the person paying — time saved, money made, risk avoided — rather than a list of features. A tool that saves a business ten hours a month is worth pricing against the cost of ten hours of that business's time, not against how many buttons the interface has.

Being too cheap creates its own problems

Underpricing feels safe, but it often backfires in two ways: it attracts price-sensitive customers who are the first to churn, and it signals lower quality than the product actually delivers. A price that feels slightly uncomfortable to charge is often closer to correct than one that feels obviously safe.

Talk to people before the price is fixed

The most reliable signal usually comes from direct conversations during early sales attempts — not abstract surveys asking 'how much would you pay,' which tend to produce unreliable answers, but real conversations where a real number is proposed and the reaction is observed. Hesitation, pushback, and easy agreement all carry information that a hypothetical question doesn't.

Pricing rarely gets locked in perfectly on the first attempt, and that's fine — it's meant to be revisited as more real signal comes in. The goal on day one isn't to find the exact right number. It's to pick a defensible starting point and pay close attention to how the market responds to it.