You're launching something new. Not a minor feature improvement—an actual new product or capability that doesn't have clear market comparables.
Stakeholders ask: "What should we charge?"
You have no usage data. No pricing research budget. No customer willingness-to-pay studies. Just pressure to ship something and start generating revenue.
Most pricing advice assumes market data you don't have. Here's how to set initial pricing for new products when you're operating in the dark.
Accept That Your First Price is Wrong
Every early-stage pricing decision is a hypothesis, not a final answer.
Your goal isn't finding perfect pricing. It's finding a starting point that lets you learn.
The companies that succeed aren't the ones who get pricing right initially. They're the ones who iterate fast based on customer feedback.
Set pricing knowing you'll change it within 3-6 months. This mental shift reduces paralysis and enables faster learning.
Start With Value, Not Cost
Most founders want to price based on costs: "It costs us $X to deliver, so we'll charge $X plus margin."
This is backwards. Customers don't care what it costs you. They care what it's worth to them.
Ask instead: "What outcome does this create for customers? What's that outcome worth?"
If your product saves customers 10 hours per week, that's 40 hours monthly. At $50/hour loaded cost, that's $2,000 monthly value created.
A rational customer would pay up to $2,000 monthly for this. In practice, you'll capture 10-40% of created value, so $200-800 monthly is your pricing range.
Work backwards from customer value, not forwards from your costs.
Use the 10x Value Rule
Safe pricing captures about 10% of the value you create for customers.
If you save them $10,000 annually, charge $1,000 annually.
If you help them generate $100,000 in new revenue, charge $10,000.
This ensures customers get 10x return on their investment—an easy business case.
For early products, err on the side of capturing less value (5-10%) rather than more (40%+). You need early wins and fast adoption more than you need revenue optimization.
As you prove value and build market position, you can capture more of the value you create.
Anchor Against Alternatives
Customers compare your price to what they'd pay for alternatives.
Map the competitive set:
Direct competitors: If they exist, what do they charge?
Substitute solutions: What do customers use today? What does that cost (including time and inefficiency)?
Do nothing: What's the cost of maintaining the status quo?
Position your pricing relative to these alternatives:
Premium to alternatives: If you're clearly better, charge 20-40% more.
Discount to alternatives: If you're unproven, charge 20-30% less to overcome switching risk.
Different structure: If alternatives charge per seat, consider usage-based pricing to differentiate.
Most new products should price slightly below established alternatives until they prove superior value.
Test With 3 Pricing Hypotheses
Don't pick one price. Test three levels with early customers.
Low hypothesis: What's the minimum viable price that doesn't feel "too cheap"?
Medium hypothesis: What feels like the "right" price based on value created?
High hypothesis: What's the maximum price before customers reflexively say "too expensive"?
Example:
- Low: $499/month
- Medium: $999/month
- High: $1,999/month
Show different prices to different early customers during sales conversations. Track:
- Which prices close fastest
- Which prices generate most objections
- Which prices create best customer LTV
- Which customers say "that's reasonable" versus "that's expensive"
After 10-15 conversations, patterns emerge. You'll learn which hypothesis is closest to actual willingness-to-pay.
Use Pricing Conversations as Research
Early customer conversations are pricing research opportunities.
When prospects ask about price, before answering, ask:
"What were you expecting the price to be?"
Their answer reveals their mental anchor. If they say "$500/month," and you were planning to charge $2,000, you have a positioning problem or you're targeting the wrong customer.
Also ask: "What's your budget for solving this problem?"
This reveals what they can afford and whether you're in range.
Then present your price and watch their reaction. Silence or questions mean you're in the ballpark. Immediate rejection means you're too high or haven't demonstrated value.
These conversations teach you more than any survey.
Choose the Right Pricing Metric
How you charge matters as much as how much you charge.
Common metrics:
Per seat: Simple, predictable. Works when value scales with users.
Per usage: Aligns price with value. Works when usage varies widely.
Per outcome: Charge based on results delivered. Higher risk but higher potential.
Flat rate: Simplest. Works when value is consistent across customers.
Tiered: Good/better/best packages. Drives upgrades.
Pick the metric that:
- Aligns price with value received
- Is easy for customers to understand and predict
- Grows as customers get more value
- Doesn't create weird incentives
Early-stage products should default to simplicity. Per-seat or flat-rate pricing is easier to explain and buy than complex usage-based models.
Create Price Anchoring Points
Customers need context to evaluate whether a price is fair.
Provide anchoring:
Comparison to current costs: "You're spending $3,000 monthly on manual processes. We're $1,000."
ROI framing: "Most customers see $5,000 in value monthly. At $1,000, that's 5x ROI."
Competitive comparison: "Alternative tools charge $2,500. We're $999 and include [differentiator]."
Cost per outcome: "$999 per month = $33 per day = $4 per hour of use."
These frames make abstract numbers feel concrete and reasonable.
Build in Flexibility
Early pricing needs room to maneuver.
Offer pilot pricing: "For the first 10 customers, we're offering $499 instead of our standard $999." This lets you test lower pricing while preserving the option to increase later.
Use contract terms: Shorter contracts (month-to-month) give you flexibility to change pricing. Longer contracts lock in early prices before you've optimized.
Create grandfathering: Early customers get locked in at launch pricing. This rewards early adopters and lets you increase prices for new customers without punishing loyalists.
Separate list from deal price: Have a public price but be willing to discount for good-fit early customers. This preserves pricing integrity while enabling deals.
Track the Right Metrics
After launching with initial pricing, track:
Close rate: What percentage of qualified prospects buy at this price?
Sales cycle length: How long from first conversation to close?
Objection frequency: How often is price the primary objection?
Deal discounting: How often do you discount from list price?
Customer LTV: Do higher-priced customers stay longer or churn faster?
Expansion: Do customers upgrade or stay at entry tier?
After 10-15 customers, these metrics tell you if pricing is roughly right or wildly off.
Know When to Change Pricing
You should revisit pricing when:
Close rates are too high: If you're closing 80%+ of qualified deals, you're probably underpriced.
Close rates are too low: If you're closing <30% of qualified deals and price is the main objection, you might be overpriced.
Deal cycles are extending: If every deal requires executive approval because of price, you're pricing above your customer's authority level.
Discounting is rampant: If you're discounting 40%+ on every deal, your list price is too high.
Usage patterns shift: If customers are getting 10x the value you expected, you can price higher.
Don't change pricing every month. But don't let clearly broken pricing persist for a year either.
Handle the Grandfather Question
When you change pricing, decide: Do existing customers stay at old price or move to new price?
Grandfather existing customers: They keep old pricing. This builds loyalty but creates revenue complexity.
Grandfather for limited time: Old pricing for 12 months, then everyone moves to new price. Balances loyalty and revenue.
Everyone moves to new pricing: Simplest revenue model but risks churn if price increases significantly.
Most early-stage companies should grandfather early customers. They took a risk on you. Reward that.
Start Higher Than Feels Comfortable
Most founding PMMs price too low because:
- They're nervous about rejection
- They want fast early wins
- They underestimate the value they create
Start 20-30% higher than feels comfortable. You can always discount to close deals. You can't easily increase price after setting expectations low.
If you're not getting price objections, you're definitely too low.
The Anti-Patterns to Avoid
Don't wait for perfect data: You'll never have enough data to be certain. Ship a hypothesis.
Don't price based only on costs: Customers don't care what it costs you.
Don't copy competitor pricing exactly: You're differentiated. Price accordingly.
Don't make pricing too complex: Simple beats sophisticated early.
Don't let pricing block the launch: Imperfect pricing that ships beats perfect pricing that doesn't.
The First Price Decision
For your first 10-20 customers, pick pricing based on:
- Value created for customers (10x value rule)
- Competitive alternatives (price similar or 20% less)
- Simplicity (per seat or flat rate)
- Upward flexibility (ability to increase later)
Launch with this price. Track close rates, objections, and customer success. Iterate based on what you learn.
Pricing is never done. But you need a starting point.
Pick one. Ship it. Learn. Adjust.
That's how pricing works for new products when you have no data.