Monetizing Innovation

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  • MAP Customer Value Framework

    MAP (metrics, activities, people) is a framework for thinking about SaaS value and pricing. At least one element should anchor a product’s pricing.

  • Willingness to Pay Should Be at the Core of Product Design

    The core thesis of Monetizing Innovation is that product failure is rooted in the failure to put the customer’s willingness to pay at the core of product design. Designing around the price—which measures value and priority—helps guide product design based on the customer. Companies often build the product and then do marketing and pricing, but that amounts to a leap of faith at best and a painful disconnect that leads to failure at worst.

  • Pricing for a Wide Range of Company Sizes

    When selling a B2B SaaS product to a wide range of company sizes (e.g. SMB, mid-market, enterprise), you generally want smaller companies to pay less and larger companies to pay more. This makes pricing difficult—make it too one-size-fits-all and you can accidentally price out the smaller customers, make it too a la carte, and all customers will find your pricing confusing.

  • § How to Make Your First Sales Before Launching

    Answering the question, how do you do early sales when you are pre-product?

  • Monetizing Innovation (Literary Notes)

    Literary notes from reading Monetizing Innovation.

  • Maxdiff Comparison Helps Prioritize Features

    A MaxDiff comparison helps reveal the ranking of pairs of features without directly asking users to stack rank them. People have an easier time saying the best or worst item in a set than to rank them so this technique is a way of getting a more accurate idea of the relative priority of a feature.

  • Pricing the Perceived Value Gap

    Cost basis tends to get the most attention when it comes to pricing. I remember business classes in college spent endless hours talking about cost plus pricing, margins, and so on. However, perceived value—the difference between the price and what people think it’s worth—gets overlooked. If the perceived value is high relative to the price, it’s a no-brainer to buy.

  • Versioning Provides a Way to Sell Information Without Cannibalizing High Margins

    Versioning is a pricing strategy for information products where you create different versions of the product for different users. The version the users pick reveals the value they place on the information and what they are willing to pay for it—without alienating users by charging different prices. This is especially important for digital information products that can drive prices and margins down due to competition.