Give 10x Value, Charge 1x

When you are setting your price, a YCombinator Podcast taught me today that you should give you ten times the value you are charging for. If what you give to your customers is worth $100 to them, and you can give it to them for $10, you will have customers beating a path to your door.

The argument could be made that if your product costs $90 and provides $100 of value, people would still be interested. The problem is that if the customer’s value calculation fluctuates slightly or a competitor can offer the same value for $89, you will soon find yourself without customers.

The value that you give can be the competitive moat that can help you win, and your customers will love you for it.