5 Psychological Studies on Pricing That You Absolutely MUST Read. As marketers and business owners, you will most likely come to deal with the process of pricing your products or services. The thing is, many folks struggle with this process because although they understand their customer’s needs, they aren’t experienced with what to charge people for their work. Below I’ve analyzed a few recent research studies that dive into pricing of products and services in the hope that you might better understand how to price your own goods. 1.
Comparative Pricing: Not Always Optimal One of the first techniques that many marketers attempt in forming a new pricing strategy is to directly compare their price with that of a competitor. “Hey, my software is 30% less than this popular option, why not buy mine?” The problem is, comparative pricing isn’t always as reliable as marketers think it is, and can effect costumer’s perceptions of the product in a few different ways. Consider this scenario: Buying Aspirin… What do you do? The first involved selling CDs on eBay. 2. 3. FindTheBest.com | Unbiased, Data-Driven Comparisons. Berlin’s Startup Factory Takes Shape [TCTV] We originally reported on the project to create a new kind of startup space in Berlin back in April, provisionally titled “The Factory”. I recently visited the project which has been put together by JMES Investments (a Berlin based Angel and Seed Investor), s+p Real Estate, and other private investors.
They plan to develop the buildings into a hub for startups, where some will be investments and others added just to add to the cultural mix of the place. Close to Berlin’s central Mitte district, the project his being led by Simon Schaefer with input from major Berlin startups like Soundcloud. With a total of 5 stories and 8,500 square-meters of space, The Factory will consist of two multi-story buildings which are already over-subscribed for potential startup tenants who will be treated to bars, restaurants a pool and a basketball court. Schaefer took me for a tour around the buildings that are slowly coming together. The Darwinian Evolution of Startup Hubs. This weekend finds NYC in between Internet Week (which I largely missed because of my London trip) and Disrupt NYC (which I will be at on and off this coming week).
So the development of NYC as a startup hub is very much on my mind. And so I thought I'd post about the development of startup hubs. This theory, which I like the call The Darwinian Evolution of Startup Hubs, is not new and I certainly didn't come up with it. But I think it is important for everyone to understand and so I'm going to blog about it. If you study Silicon Valley, what you see is something that looks like a forest where trees grow tall, produce seeds that drop and start new trees, and eventually the older trees mature and stop growing or worse, die of disease and rot, but the new trees grow up even taller and stronger.
If I left out important foundational companies of this mental model, please forgive me. That makes total sense since this darwinian evolutionary model is non linear.
Eleven Compelling Startup Pitch Archetypes (with examples from YC companies) Photo credit by TEDx Vancouver Over the past few weeks, I’ve helped a handful of startups work on their YC applications and interviews. I spent much of the time brainstorming with the founders on the best way to explain their business in the most clear and compelling way possible. These founders knew a lot about the market and had spent months if not years developing their ideas, but that often meant they would be all over the place when talking about what they were doing. This caused their pitch to sound weak and not be as compelling as it could be. Paul Graham is, among other things, really good at boiling companies down to their essence. Startup Pitch Archetypes From my experience at two demo days, talking to investors about Ridejoy and listening to lots of aspiring YC founders talk about their businesses, I realized that the best startup pitches seem to fall into several patterns.
Take a look. The Standard Pitch What it is: What it sounds like: Who uses it: Many startups. When to use it: Six Myths of Product Development. Artwork: Ricky Allman, Undertable, 2011, acrylic on canvas, 72" x 48" Most product-development managers are always struggling to bring in projects on time and on budget. They never have enough resources to get the job done, and their bosses demand predictable schedules and deliverables. So the managers push their teams to be more parsimonious, to write more-detailed plans, and to minimize schedule variations and waste. But that approach, which may work well in turning around underperforming factories, can actually hurt product-development efforts.
Although many companies treat product development as if it were similar to manufacturing, the two are profoundly different. In the world of manufacturing physical objects, tasks are repetitive, activities are reasonably predictable, and the items being created can be in only one place at a time. Fallacy 1: High utilization of resources will improve performance. But in practice that logic doesn’t hold up. Be Concise! – The Top Questions Asked At A Y Combinator Interview. As of yesterday Y Combinator began its marathon series of interviews to decide which startup teams will ultimately go through the – now world-renowned – program. Interviews go on for five days. Rumours that people have been seen running screaming from the building shouting “The Horror!”
Have not been confirmed. But I’m currently in the Valley catching up with one or two of those European hopefuls trying to get into Paul Graham’s good books – indeed I bumped into one team at San Francisco’s SFO airport. Turns out the YC pitch document I saw being worked on a laptop on the plane over was for Stackblaze. The guys behind it, James Cunningham and Colin Hayhurst, also put together a cute web app full to the brim with the kinds of typically blunt questions you get asked at a YC interview. You can check it out here, and subject yourself to the same torture as all those YC hopefuls.
Colin tells me he curated them from various YC pages and a big variety of blog posts by past applicants.
Website. Group Buying Industry In U.S. Estimated To Grow 138 Percent To $2.7 Billion This Year. The group buying industry has sprung out of nowhere over the past two years. A new report (embedded below) by daily deal aggregator Local Offer Network puts the U.S. gross revenues across the industry at $1.1 billion last year, and estimates gross revenues will grow 138 percent to $2.7 billion in 2011. Groupon alone, according to other sources, is expected to bring in between $3 billion and $4 billion this year, up from $760 million last year, but those numbers are worldwide. If you figure at least half of Groupon’s revenues come from the U.S., you can get a sense of how much it dominates the market—capturing anywhere from about 50 to 75 percent of expected industry revenues this year. But that still leaves as much as half left over for other group buying sites, such as LivingSocial and Gilt Groupe.
And those are just the big dogs. Local Offer Network tracked 90,000 deals across 322 group-buying sites in the U.S. since January, 2010. Funding and Mentorship from the #1 Startup Accelerator in the World. Entrepreneurs Roundtable launches New York City startup accelerator. Entrepreneurs Roundtable, an organization that hosts monthly events to assist budding startups, is launching its first startup accelerator in New York City today. Simply dubbed ER Accelerator, the organization bills it as a program “by New Yorkers, for New Yorkers.” The organization is currently accepting applications for ER Accelerator’s three-month summer season, which will begin in June. Ten lucky startups will be selected to receive a $25,000 seed investment and three months of free office space in NYC. They’ll also have access to over 140 New York-based mentors, including Fred Wilson, Esther Dyson, and Anil Dash, as well as other notable entrepreneurs, technologists and investors.
The mentors will directly assist the startups through hands-on coaching and group discussions. In addition to the wide variety of mentors, ER Accelerator startups will also be paired with one of ten operating partners who have experience in the startup world. Investors Cough Up $1.6 Million To Dine With Grubwithus, The Brilliant Social Dining Service. The idea behind Grubwithus is an awesome yet simple one. You browse for a restaurant you’d like to go to in a certain city and buy a ticket for your meal at a set price. But the key is that others do this as well, all with the intention of meeting new people over dinner. And when you’re buying your ticket, you can see who your dinner buddies will be. Yes, it’s sort of like Groupon meets Meetup.
And yes, it’s brilliant. So it should be no surprise that a long list of prominent early-stage investors have decided they’d love to back Grubwithus. Alongside the funding, the company is also highlighting two different types of dinners: charity dinners and raffle dinners. For the Andreessen Horowitz meal, which takes place a Tamarine in Palo Alto on May 18, you’ll have to bid to win a dinner with John O’Farrell and Scott Weiss (two of the general partners). The NEA meal is a raffle one.
Currently, Grubwithus operates in Chicago, San Francisco, New York, DC, and Los Angeles.
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