Pricing Selects the Market (Sell Growth, Not Savings)
Price and positioning choose your market — reframe your product as growth to charge many times more.
- Difficulty
- Advanced
- Time to result
- ~months to results
- Steps
- 4
- Confidence
- 92%
A pricing and positioning framework arguing that price is not a demand-curve knob but a signal that selects which market you serve, and that positioning your product as delivering more of what the buyer values (growth) rather than savings can multiply your price. Use it when growth stalls and you suspect you're underpriced or mispositioned.
Origin
Cohen combines Patrick Campbell's data-backed claim that startups price too low with his own observation that raising prices often doesn't reduce signups because the real demand curve is a mesa, not a downward line. He illustrates the positioning half with the 'Double Down' AdWords story, a simplified version of something that happened to him.
Core principles
- 01Startups almost always price too low because they guessed and never changed it
- 02The real-world demand curve is a mesa (up, plateau, then down), not the textbook downward slope
- 03Below-market prices signal 'not good enough' to serious buyers, so they don't buy at all
- 04Price is structure and positioning, not just the number on the page
- 05Sell more of what the buyer values (growth) rather than cost savings — savings caps your price, growth doesn't
How to run it
- 1
Question why you believe your price is right
Assume the price is probably too low or mis-structured, because you likely just copied competitors or guessed and never revisited it.
Pro tip Patrick Campbell's line: 'Your prices are way too low because you just guessed and you haven't changed them.'
- 2
Test a raise and watch signups
Raise the price and observe whether signup rate actually falls. Often it stays flat or rises, proving you're not near the real ceiling yet.
Pro tip One founder switched a $300/year enterprise product to $300/month (a 12x raise) and signups stayed at one or two per week — meaning he should raise again.
Watch out Only the very lowest, worst-fit end of a market has the textbook downward demand slope; serious buyers reject prices that look too cheap.
- 3
Reposition around the value the buyer prizes most
Reframe the same product to deliver more of what the buyer values (usually growth) instead of savings. A CEO would rather hear 'we grew leads' than 'we saved money'.
Pro tip Savings caps what you can charge (you must charge less than you save); delivering more growth raises the cap by roughly an order of magnitude.
- 4
Treat pricing as a strategic decision, not a knob
Recognize that changing price changes your market, which changes required features, governance, integrations, support, and even culture. Decide whether that new market is one you actually want.
Pro tip Enterprise buyers often have a sweet spot around $75-150K contracts (per Jen Abel) — aim your structure into that bucket.
Watch out 'We'll just go enterprise' is not a simple move; you may lose the very differentiation that makes you valuable in your current market (e.g. Buffer deliberately staying with 'the little people').
In the wild
A tool that halves a customer's $40K/month AdWords spend could only charge ~$5K (you must save the buyer money). Repositioned as 'double your leads for the same money', the buyer already willing to pay $40K for that lead volume will pay $40K to double it — the same product now earns 8x.
→ 8x the revenue for an identical product, purely by positioning it as growth the CEO wants to hear rather than a cost saving.
A founder charging $300/year to enterprise/government switched to $300/month on Cohen's suggestion and still got one or two signups per week — nothing changed.
→ Proved he was nowhere near his price ceiling and should keep raising (maybe 2x or 50% more), not stop.
Common mistakes
Trusting the textbook demand curve
Microeconomics 101 says cheaper means more buyers, but serious buyers read a too-low price as low quality and don't buy at all, so cutting price can shrink your real market.
Positioning on savings
Framing your product as cost savings mathematically caps your price below what you save; framing it as growth removes that cap.
Treating 'go enterprise' as a free lever
A higher price selects a market with new demands (SOC 2, integrations, professional services) and may destroy the differentiation that made you valuable — it's a whole-strategy decision.
Is it for you?
Best for
B2B SaaS founders whose product is underpriced or positioned as a cost-saver when it could be sold as growth
Not ideal for
Products whose only genuine value is efficiency/savings, or founders who deliberately serve a low-budget segment for cultural reasons
From the transcript
“Your prices are way too low because you just guessed and you haven't changed them.”
“what often happens is you raise prices and signups don't change”
“pricing selects the market”
“sell more of what the company values like growth”
From the episode
5 questions to ask when your product stops growing
Jason Cohen (2x unicorn founder)