To Charge or to Learn: Pricing and Product Market Fit

A comment I left on this venturehacks post on pricing by Ash Maurya in which he quoted Sean Ellis:

I’m trying to reconcile the differences between your POV and Sean Ellis’.

I think first off it’s important to establish the goal: To get to product market fit.

Then that means the role of pricing is to maximize learning, which is how you will get to PMF fastest.

In some cases you need to charge users to maximize learning, otherwise they won’t take your product seriously enough to use it.

In other cases you learn more by letting users have access to everything, uninhibited.

I think it’s only useful to test price to maximize learning towards finding PMF, not for the reason to see if people will pay.

If people pay before PMF they are paying for a “nice to have” product by definition and that’s not a scalable, repeatable process. Their purchase is due to extraordinary circumstances, such as a hard sell by the founder, or the user was wealthy and didn’t mind paying for it after the trial was up, but ended up not sticking with the product.

“Will you pay for this?” is really just another way of saying do I have Product Market Fit – But it’s an inferior way of measuring PMF to the question, “Would you be disappointed if you could no longer use this?”. Paying customers are one way to measure if you have PMF but it’s a layer of abstraction above what you actually want. You can try to infer from pricing whether it means you have a must have product or not, but it’s harder to determine causality up a layer of abstraction.

It’s better just to measure directly whether people would be disappointed if they could no longer use it.

I think it’s also worth noting that you may have hit Product Market fit right off the bat with Cloud Fire. If someone is really good at Customer Discovery, which you are, that’s a possible scenario.

And in which case Sean would agree that you need to implement a business model and start charging right away.