This is basically a longer version of an offhanded comment I made earlier regarding answering the "How will you get users?" question on the YC application. I wasn't sure if it made sense or not, so I tried talking through it. I'd be interested in hearing what you think. (This is by no means a canonical answer to that question, by the way -- it is just an extended riff on my particular way of looking at it.)
I for one am very happy you decided to write this article. I've been thinking on this exact question ever since I read your comment, and while I don't have answers yet, your article has given me a lot more food for thought.
> [...] there is a stepwise increase in difficulty if prices increase by $1, as long as the price was already at whatever the company’s magic number is for maximum to be put on a corporate credit card or signed for on a non-manager’s authority.
The idea of pricing in such a way as to require the least authority possible for a purchase is fascinating. I had never considered that monthly billing completely avoids administrative hurdles for otherwise equivalent costs billed up front. The real trick is figuring out what that threshold is...
You can also split your product into different skus to get around the problem. My major professor in grad school built a lab that had long stainless steel benchtops split in two sections to avoid going over the $500 per item purchasing limit that triggered an automatic and prolonged bidding process at the school.
I’m not applying to YC this time around, but I always fill out the application to force myself to talk through my business strategy.
Me too.
Funny, yesterday I was struggling with the question about customer acquisition. After reading this post, I will return to it later today with renewed gusto.
Patrick, the only thing more amazing than the quality of your input here is the fact that it is still continually improving. Thanks for another kick in the ass.
"These statements aren’t just true about the product — sure, they might have a crufty old VB6 app and you have the new Node.js hotness. They are equally true about the customer acquisition process. You’re competing with their business, not with their product, so you could possibly either focus your innovation on customer acquisition or, more likely, use innovation on both customer acquisition and product in a mutually supportive manner."
This is very true. You often have a more innovative product but the established competitor has a business. It makes sense to acknowledge this fact and work on it.
