Aim to charge between 25% and 50% of the value you deliver, allowing the customer to retain a significant portion of the savings while ensuring a fair return for your service.

We're building a marketplace that allows vendors to sell excess food inventory at a discount to users willing to buy it.

Our target demographic includes college students and early tech adopters who are interested in purchasing discounted food.

Industry benchmarks for conversion rates vary: casual download games average about 2%, while freemium SaaS companies range from 1.5% to 5%, with an average around 3%.

Our gross margin needs to be above 60%, ideally above 70%.

Consider offering a discount for commitment, such as 10-20% off for annual subscriptions, to encourage adoption and ensure revenue predictability.

We aim to offer returns in the mid-teens to 20% range to attract investors, ensuring our financial model is appealing. There are effectively two markets: the investor market, which has its required return, and the product market, which has its potential return. The goal is to align these two as closely as possible.

Discounting your product can be detrimental; instead, structure discounts based on value and urgency to encourage sales.

Pricing below cost can be a risky strategy for gaining market share, often leading to unsustainable business practices. You might want to price a little lower now because your margins are going to improve with time, but it's a risky maneuver, and I advise startups to maintain an 80 to 90% gross margin.