Startup pricing

Why it's hard, why it matters, & how to do it well

Pricing in early-stage startups is hard for a few primary reasons.

1. Low sample size means limited data to guide decisions.

2. It’s more art than science, especially without strong comps.

3. Founders, especially first-time founders, are usually learning how to approach pricing on the fly.

Despite the uncertainty, pricing is one of the highest-leverage decisions a startup can make. The opportunity is to avoid treating it as an afterthought, even in the early days.

Some people push back on this, arguing that pricing doesn’t really matter for startups—that survival is what counts.

I get what they’re saying. They don’t mean pricing is irrelevant. They mean price optimization doesn’t move the needle for startups the way it does for mature companies. And that’s fair.

But if someone says pricing doesn’t matter—only survival does—they’re missing a key point: a startup that misreads its market’s willingness to pay is unlikely to survive in the first place.

I learned this firsthand.

In my first company, pricing was an afterthought. To this day, I see it as one of my top three mistakes as a first-time founder.

Our independent board member at that company agreed. Six months after the company was sold in an asset sale, I asked him what he thought our biggest mistake was.

His answer:

“In hindsight, the first thing I should have done when I joined your board was to lead you through a pricing & packaging exercise to align what we charge with the value we were delivering. We were just way out of balance.”

That lesson stuck with me. Pricing had felt like a secondary concern, but it was actually a fundamental input to product market fit that we didn’t understand or invest in well enough.

A couple of years later, I got to work on pricing at a growth-stage Series C company. This time, I saw what it looked like to take pricing seriously. I worked closely with IVP’s pricing center of excellence, and it gave me the tools to confidently price and package products.

We ran primary research with customers, analyzed our discounting governance, studied user behavior with RFM models, and conducted pricing elasticity studies.

The work I most enjoyed was always talking to customers directly—learning their willingness to pay, what they saw as fair vs. prohibitive price points, and which features were must-haves vs. nice-to-haves vs. add-ons.

Those experiences taught me that pricing isn’t just a number—it’s part of the product itself. Despite its importance, most startups still struggle to get it right, which is why my co-founders and I are building Schematic. Our mission is to provide pricing infrastructure for developers so that it’s easy for companies to treat pricing & packaging as a first-class citizen in their products.

What I’ve Learned About Pricing

Across ~12 years in startups, here are the 3 most important lessons I’ve learned about pricing:

1. Pricing will change. And because it will change, the ability to iterate quickly is valuable.

2. Pricing is an extension of a product. When companies treat it this way, they make it easier for customers to expand. Supabase is the gold standard in how to do this. You can see what they’ve done in action here.

3. “Willingness to pay” is a super tool. It helps founders validate their bets—on products, markets, and positioning. Here's the template Schematic uses for our own WTP conversations.

4 Ways Startups Get Pricing Right

Over the last few years I’ve talked to a lot of startups about how they approach pricing.

Every company does things slightly differently, but I’ve noticed that the startups who excel at pricing typically do a combination of 4 things well:

1. Master willingness-to-pay conversations. Founders & startup teams who get comfortable having these discussions with prospects and customers have a much deeper understanding of their market and the market’s perceived value of their products.

2. Establish pricing principles that align with company stage. Without principles, it’s easy to be reactive or inconsistent. Superhuman has done an incredible job of this. Here’s Superhuman’s Alex Rodrigues talking about it.

At Schematic, our principles are:

• Simpler is better. The less we need to explain, the better. Complex pricing slows down sales.

• Even the smallest companies should be able to afford our product. That means a generous free or low-cost plan so startups can use us until they’re on the rails.

• We shouldn’t get paid more until our customers get paid more. This informs our value metric and package segmentation.

3. Make internal pricing conversations a habit. Set a monthly meeting with the founding team to reflect on pricing and packaging learnings.

Some questions to guide the discussion:

• Did we lose opportunities because of pricing?

• Did we feel confident in our pricing?

• Did we give away too much?

• Does our pricing align with the value the market expects from us?

4. Align the product roadmap with the pricing & packaging roadmap.

Startups are constantly shipping new value. Every product release is an opportunity to evolve pricing and packaging.

Here’s how we think about it at Schematic:

• Product Roadmap → What we’re building across 3 main dimensions:

  • Stability & reliability

  • Table-stakes features

  • Real innovation & differentiation

• Packaging Roadmap → How we bundle and position features

• Pricing Roadmap → How our price points evolve as the product matures

Packaging evolves faster than pricing because we’re constantly shipping new value.

Pricing changes happen less frequently, tied to the release of real innovation rather than stability updates.

For us, that means updating packaging every 1-3 months and adjusting pricing every ~6 months. In our experience, this cadence represents a best-in-class approach for startups that are shipping fast and iterating quickly.

Closing Thought

Pricing is an evolving journey. It’s not something you “figure out” once and move on. The best companies make it a core practice—something they continuously invest in and refine.