At eBay, touting the benefits of a low-cost tool meant the difference between profitability and a loss. LinkedIn’s decision to package some seldom-used features as high-margin “premium” accounts spawned a business line that now makes almost $250 million a year. This Sequoia Guide covers strategies that can help you figure out the right price for your product-and end up with happier customers and more profit in the process. Pricing is as much an art as it is a science, one that relies as much on marketing and psychology as it does on classical economics. A lot of startups treat pricing as a math problem or, worse, an afterthought.
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