Are you actually your first customer? Then prove it.
I’m a huge believer in the “what would I pay for this” approach to pricing your product. I want to build products that I actually use myself. What would I pay? Well, that’s hypothetical though isn’t it? To take this approach a step further, how about: what am I paying?
Let’s take “hypothetical” out of the equation here. Hypothetically, I’d pay (and hope my customers might pay) $50 dollars. But actually I’ll pay $19.
You can try to ask potential customers what they would pay, but until you see a credit card, it all means nothing. As Jason Fried put it, “the only answers that matter are dollars spent”. It’s simple… if you are lucky enough to acquire a paying customer, that’s one vote in the “yes” column. You get to be the first vote in the “yes” column.
If you are building something that requires recurring payment, why not just bust out your own credit card and pay for your own product? I’m not talking “test” transactions mode here in your Stripe control panel, guys. Full “live” mode, baby.
And no, not the company credit card. Your personal credit card.
Why? There’s something symbolic about actually shelling out money for your own product. ARE you actually your first customer? Then prove it. If you believe in your product, then why not be the first to invest in its success with actual money?
Having to explain this charge on the credit card statement to yourself (and your spouse) every month gives you a constant reminder to keep your passions in check.
Every. Single. Month.
What the heck have you been spending all this time on? Is it actually making money? What are your reasons for not giving up? Are you able to support your family and still do this? The monthly credit card charge is a little reminder about all of this.
At least it has been for me.
When I was ready to take on paying customers at YikeSite, I built my own subscription billing (this was in 2007 and the days before Braintree, Recurly, and Stripe) and I needed to test credit card transactions. So I used my own personal credit card to test. There were a few issues early on and they all got fixed but I just wanted to keep my card active to make sure the next few months after launch were fine. That was 6 years ago and I’m still my longest (and first) paying customer. Feels good.
Side note: You also won’t feel guilty asking your friends and family to pay either because you get to say that you’re no exception and you pay for it too.
“We’re not just the co-founders, we’re also customers.”
When my co-founders and I were pricing ContentGems we asked ourselves the same question: what would we pay? I told Michael and Jo that I will be paying for whatever we price our product at, and that definitely helped guide the discussion. At the time I was already using ContentGems for powering my @YikeSite tweets (still am) and I wanted to pay money to “keep the Buffer full”, so to speak.
A year later and all three ContentGems co-founders are still paying with our own credit cards as a symbolic gesture and commitment to our own success.
We are actually our first paying customers.
PS. I tweet about startups/family stuff and you should follow me on twitter here.