In this episode of Executive Connect, Melissa Aarskaug sits down with Alex Shartsis, founder and CEO of Skip and Silverwood, to discuss why so many founders undercharge, chase the wrong customers, and mistake activity for real go-to-market traction.

Alex explains why charging early gives founders better feedback than free users, how highly targeted micro campaigns can outperform mass outreach, and why narrowing your ideal customer profile can make both product and marketing more effective. He also shares how founders should think about venture capital, bad-fit customers, scarcity thinking, and knowing when a business or strategy simply is not working.

The conversation also covers value-based pricing, fair packaging, AI-powered go-to-market, customer conversations, and why founders often abandon a working channel too quickly in search of the next opportunity.

For founders dealing with inconsistent revenue, the message is simple: get closer to the customer, understand where value is created, and stop changing direction before you have enough data to know what actually works.

Chapters:

(0:25) Why startups struggle with pricing and go-to-market

(1:31) Why founders consistently undercharge

(3:42) Pricing problem, product problem, or wrong customer?

(7:37) Why micro campaigns outperform mass outreach

(13:10) The power of narrowing your customer niche

(17:06) The hidden traps of venture capital

(19:23) How scarcity thinking hurts founders

(26:44) Building fair, value-driven pricing

(34:05) How AI is changing go-to-market

(42:53) What founders should do when sales stall

Alex

(0:00) So this is my biggest thing with founders is almost all of them under charge. (0:06) And I think that that are fundamental to being a founder. (0:09) And they can both be summarized by insecurity, right?

(0:12) You’re insecure about what I’ve built or what I’m building. (0:15) And so by taking price off the table, you think you’re going to get more yeses. (0:19) And so, you know, it feels good to have people say, yes, I want to use it.

(0:22) But that creates a host of other problems.

Melissa

(0:25) Most startups don’t fail because the product is bad. (0:27) They fail because the company never figured out how to sell it, package it, or charge what is actually worth. (0:34) Pricing gets treated like a slide on the pitch deck.

(0:37) Go-to-market becomes something founders worry about after the product is built. (0:42) And before long, they’re undercharging, overbuilding, chasing the wrong customers, or celebrating growth that never becomes meaningful revenue. (0:50) Today’s guest has seen this his career, built a company from the ground up to help solve it.

(0:57) Alexander Chartis has bootstrapped companies, raised venture capital, completed exits, shut businesses down, and spent more than $100 million acquiring startups while working inside of a public company. (1:11) Today, as the founder and CEO of Skip and Silverwood, he brings founders greater discipline to pricing, packaging, customer acquisition, and go-to-market execution. (1:24) Welcome to the podcast, Alexander.

Alex

(1:28) Excited to be here. (1:29) Thanks for having me.

Melissa

(1:31) Now, you said that most founders undercharge. (1:33) What does and why does pricing discipline matter so early in the life of a company?

Alex

(1:40) So this is my biggest thing with founders is almost all of them undercharge. (1:46) And I think that they’re fundamental to being a founder, and they can both be summarized by insecurity. (1:52) You’re insecure about, do people want what I’ve built or what I’m building?

(1:56) And so by taking price off the table, you think you’re going to get more yeses. (2:01) And so it feels good to have people say, yes, I want to use it. (2:06) But that creates a host of other problems.

(2:08) I think the other one is they don’t feel like they’re worth it. (2:11) It’s like, well, I’ve only been working on this for three months. (2:14) I don’t know if it’s really worth anything.

(2:15) The competitors charge 10 grand a month. (2:17) I can’t charge that. (2:19) I’m not that good.

(2:20) And so there are all these reasons why founders punt on asking for money and punt on pricing. (2:29) But unless you’re charging, with the exception of an ad business where you’re selling ads and you’re building audience, unless you’re charging for what you do, you don’t have good data on whether people want it. (2:39) And so I think you should charge from day one.

(2:41) For Skip, we had our paying customer before we incorporated. (2:44) I think unless you have people that say, I want this and I’m willing to get out my wallet, you are lying to yourself about how much demand there is for what you’re doing. (2:54) And you’re starving yourself for resources in terms of being able to fund building the business.

Melissa

(3:01) Yeah. (3:02) And so working with a lot of CEOs, often I hear in CTOs and CIOs, I’m just not willing to bet my name or my position on a product that hasn’t been tested in the market. (3:14) So a lot of times they’ll pay a premium for bigger brands, bigger names, because they know that they have thousands or tens of thousands of customers.

(3:25) And so they don’t necessarily want to pay more for smaller companies. (3:29) So do you think that how do founders really distinguish between it’s a pricing problem or it’s a product problem or we don’t have customers today and we’re trying to sell something?

Alex

(3:42) Yeah, I think there’s a third problem in there, which is are you talking to the wrong people? (3:46) So if you put a Porsche dealership in a bad part of town, you might walk away thinking nobody wants a Porsche, but really you’re just talking to the wrong people. (3:54) And if you put it in a nice part of town, everybody would have bought a Porsche.

(3:58) And so I think that you end up in this, if you’re a founder and you’re in that desperation mode and you’re kind of needy, you really want customers, somebody shows up, yeah, I don’t spend money on this, but like, I’ll try your thing. (4:11) I could spend 50 bucks or give it to me for free. (4:14) That’s very different than positioning yourself with that, whatever, Salesforce customer that’s already spending $100,000 a year.

(4:22) Right. (4:22) And if you ask for a hundred, they’ll pay it maybe. (4:27) So I think a big part of it is talking to the wrong people.

(4:30) Like if you’re talking to people that aren’t really in pain and don’t have the problem, the unique problem that you solve, and you can’t articulate why your solution is truly better than the existing solutions, so that’s where it bleeds into product. (4:46) So, I mean, a concrete example, like Skip, we compete with the email providers, like the Instantly’s and the Lendless, and there’s, I could probably name a dozen of them without even having to Google it. (4:57) And we’re different, like our open rates are twice as good.

(5:00) Right. (5:00) And so like, if you care about your emails being seen and you’ve been using Instantly and getting a 15% open rate and want a 38% open rate, like you should try Skip. (5:12) But like, if you, I’m not going to give it to you for free, you’re not going to be like, oh, I already pay Instantly, can I try yours for free?

(5:18) It’s like, no, if you’re going to do it, you’re going to do it all the way. (5:21) And if you’re not willing to pay the couple hundred bucks, then clearly this isn’t that big of a problem to you, right? (5:26) Then you don’t really care that much about people seeing your emails or whatever the thing is for that product.

(5:31) And so I think by charging, you kind of force that conversation. (5:35) And if you’re talking to people that are using Instantly because it’s really cheap and costs $37 and don’t have $200, lowering your price is not going to, or giving it away for free is going to give you the wrong answer, right? (5:48) You’re not going to realize you’re talking to the wrong people.

(5:51) So I, you know, I, I think that the, the, the, the objection you raise around people worrying about their careers, worrying about going with a established vendor, that is a very real objection. (6:02) And the sooner you figure out that the company you’re talking to is one of those companies that won’t go for the new vendor, the better, because you should just get out of there. (6:11) Like, it’s just not, that’s not a good fit.

Melissa

(6:14) And, you know, it’s funny because I talk to, you know, in the same context, I say, well, would you rather be working with the, you know, and I’m talking about, you know, techno, like the Microsofts of the world, the CrowdStrikes of the world. (6:27) I’m like, would you rather have a company that has, you know, tens of thousands of customers or a company that say has a thousand and can really focus on you and really focus on, you know, where you are going with your business. (6:41) And so I, I’ve often been someone that really likes the boutique-y kind of companies.

(6:47) I think there’s more, there’s stronger relationships, there’s better customizations, you know, they care. (6:53) And I’m not saying that the bigger companies don’t care. (6:56) I think when you get so many customers, it gets really difficult to touch and, you know, understand all of them.

(7:03) And so I, I love the, the analogy you made. (7:06) And so I know you built skip.ai around this idea of micro campaigns. (7:10) And so let’s talk a little bit about what a micro campaign is and why does a focused approach like that outperform, you know, broad growth efforts.

(7:23) Ready to lead smarter and invest wiser? (7:26) On the Executive Connect podcast, we unpack executive strategies for wealth and influence. (7:33) Hit the subscribe button now.

(7:35) Don’t just watch act.

Alex

(7:37) Well, yeah, we were talking before about how some of your clients and, you know, friends are getting just tons of emails, right. (7:43) And they’re just throwing them all out there. (7:44) LinkedIn is full of, if you’re a CEO of something, your LinkedIn is full period, right?

(7:48) Like you just, it’s just, there’s so much noise out there. (7:52) And, and yet you do go into your email every day and you reply to emails. (7:56) You do go into LinkedIn and reply to LinkedIn messages, right?

(7:59) And those are probably 99% of the time people you knew already. (8:04) But what we’ve found is that there are, there are the type of very human email that still gets responses. (8:13) And we call those micro campaigns because when you do them as a campaign, it might be to 10 people or 20 people, but you know, it’s thoughtful, right?

(8:20) Even if AI wrote it, like you thought about who you’re reaching out to, you thought about why you’re reaching out. (8:24) And so my favorite example is conferences, right? (8:27) You’re going to go to a conference, right?

(8:29) You should run a campaign before you go to the conference and reach out to the people that are going to be there that are your ideal customers or influence your ideal customers, right? (8:37) And even if they don’t, so a lot of them will reply because it’s like, are you going to this conference? (8:42) You want to grab coffee?

(8:43) Do you want to come by our talk or our booth or whatever, right? (8:46) And so there’s this urgency to it that we’re both going to be at this conference. (8:49) There’s a credibility of being a speaker at the conference or being a sponsor, just knowing about it and being there that comes with the conference, right?

(8:57) But if you, if you just throw this over the fence to an AI and it’s like blast everybody in my industry, there’s a conference coming up, right? (9:03) It’s not going to work. (9:04) If you’re thoughtful about the list, you reach out to you while you’re reaching out to them, right?

(9:09) Whether you have AI agents help you or whether you do it by hand, like those, those kinds of campaigns have always been the ones that work. (9:15) And you can extend this to other types of campaign. (9:19) A very popular one is people that visit your website.

(9:21) There’s, you know, there are ways to figure out the emails or the companies of the people that are on your website and why not reach out to them, right? (9:29) You can be creepy. (9:30) You can be like, Hey, we saw you’re on our website.

(9:31) Do you have any questions? (9:32) And maybe they do. (9:33) And they’ll respond, right?

(9:34) And they just were busy or got distracted or, you know, weren’t quite there yet to fill out a form or don’t want to fill out a form. (9:42) So, you know, you just make it easy for people to raise their hand and say, yes, I do. (9:46) The other thing you can do is not mention, you notice they’re on their website, but send something of value, like a webinar, like you’re going to a conference, whatever that is.

(9:53) But those, those targeted campaigns and those are examples of ones that kind of, you can run routinely. (9:59) There are other ones that require more thought, like major event happens, company gets acquired, right? (10:06) You, you do a campaign to CEOs of similar companies.

(10:09) It depends on what you’re selling, right? (10:10) But every industry has these things that are kind of like high attention triggers, where it’s something that everybody’s paying attention to. (10:19) And if you hit on that in the right time, you know, like when it happens or shortly after it happens, people are like, oh, this guy, this guy knows my industry, right?

(10:28) He knows the things that I’m thinking about. (10:30) It kind of read my mind. (10:31) The thing that doesn’t work is these like AI mass emails.

(10:34) It’s like, hey, I saw you went to Arkansas, you know, go raise your value. (10:38) Like none of that stuff works, right? (10:41) Because everybody’s doing it.

(10:43) It’s because it used to work great. (10:44) Now it’s like, oh, you use AI, like delete. (10:47) And so, so the micro campaign, I mean, we could go on about other examples, but it’s, it’s giving a lot of thought to it and treating it as part of your customer journey.

(10:55) That’s, that’s where it really works. (10:56) And, and, you know, if you can get, I mean, we have campaigns that get an 80% open rate and a 30% response rate or 40. (11:02) You can do that from a hundred emails, right?

(11:05) Why would you send a thousand and get like a 1% response rate, right? (11:09) When, when you get more results from a more targeted, a more targeted campaign.

Melissa

(11:14) And there’s so much in that. (11:16) I smile and laugh because I don’t think there’s a day that goes by that. (11:19) I don’t get some kind of inbound something that has nothing to do with what I do or what I offer, or I might even say, Hey, John, when it’s Melissa, right?

Alex

(11:29) I might say, people are always like, Hey, do you want us to send like cold emails for you? (11:33) And it’s like, did you read my LinkedIn? (11:35) Like what?

(11:36) Like, like you’re, you know, you’re selling ice to the guy who sells ice, like what’s wrong with you?

Melissa

(11:43) Well, and I think, you know, and I think there’s so much in that, right? (11:46) Like we’re, you know, in this, you know, I’m a technologist. (11:49) I love technology.

(11:50) I’ve been in this space my whole career, but there’s a difference between transactional having this kind of transaction. (11:57) I’m going to throw everything out there and see what sticks. (12:01) I truly believe those days are over, right?

(12:03) People just aren’t opening, aren’t responding. (12:05) When you write to your point, a really thoughtful, Hey, Melissa, I noticed you were at this conference last week. (12:12) I loved hearing you speak on this.

(12:14) I’d love to connect with you and better understand that based on what you said. (12:19) It is 99% certain. (12:22) I will reply to that person for having context about what, you know, why, you know, why they reached out.

(12:30) I identify with, yep. (12:32) I was at that conference. (12:33) They listened to me speak.

(12:34) You know, I’m going to thank them for taking the time to send me a note, but if it’s something that doesn’t matter or it’s not in context, I’m not replying. (12:44) So what can founders be trying to learn? (12:47) Like, so I think one of the things I love campaigns, but there’s something to learn, like to your point, if, if they’re getting 2% open rates and then it’s 10% and then it’s 30%, we should be learning from every one of these campaigns.

(13:00) And I think, you know, how narrow should the audience be? (13:04) What are we learning, you know, and how quickly should companies adjust based on that response? (13:09) I know that was a lot of questions.

Alex

(13:10) I mean, but it’s all great stuff. (13:12) I think, so there’s this concept of niching down, which I don’t know, some other LinkedIn influencer told me about a year or two ago. (13:19) And I was like, how have I never heard of that before?

(13:20) Where it’s like, you know, you go out and you’re like, I’m going to sell, I’m going to use this because it’s something everybody can relate to. (13:26) I’m going to send, sell like email outreach software to companies. (13:29) Right.

(13:29) And it’s like, well, but which companies it’s like, well, founders, like, well, but which founders. (13:33) Right. (13:33) And, and the narrower you get, just like a micro campaign, the, the more what you do resonates with that audience.

(13:42) And from a product standpoint, the more you can build a product for that audience. (13:45) And so there are people that don’t have to think about this. (13:48) Like if you’re a, you know, gas station construction company, right.

(13:54) You sell gas station construction to companies that build gas stations. (13:58) Like, you don’t, you’ve already niched down. (13:59) You don’t have to think about it.

(14:00) Right. (14:01) It’s just like that in the Southeast, like it’s a, you already have a fairly clear ICP and value prop. (14:07) And like, you know, it doesn’t require a marketing genius to figure that one out.

(14:10) But when you’re selling software and some other, you know, AI services, like all these other tools, it’s really easy to be like, oh, anybody could use this. (14:18) And that’s, you know, it’s, it’s better to be like, oh, I’m going to go out. (14:23) I talked to somebody yesterday and they targeted, they were selling like cybersecurity email software, like to protect from spam and phishing and stuff to like small doctor’s offices, small real estate firms.

(14:34) Like they had a very specific ICP and that really helps. (14:39) So I think the one thing I would say to founders is like really get really good at one niche. (14:45) And it could be a very, very small niche, depending on your, you know, your selling price, but like build the thing for that niche and build the marketing motion and the campaign for that niche.

(14:54) And what you’ll find is that maybe it translates, maybe you can take the same subject lines in the same emails and send them to a thousand people or, you know, in a, in an adjacent market, or maybe you just take the learnings of like, this is what we did to connect with that market. (15:08) Great. (15:09) We’re going to go do that in this other market.

(15:11) And it’s not going to be the same email. (15:13) It might be the same infrastructure. (15:14) It might be the same platform and provider, but same different landing page, but same, you know, landing page.

(15:20) Like you do all the same things, but you do it for this other market rather than just being like, okay, we’ll just cut and paste this email and send it to, you know, 900 more people.

Melissa

(15:29) Yeah. (15:29) And I love that. (15:30) I think about, I call it an avatar.

(15:32) Like when I think about who I’m going after, who am I targeting? (15:35) What are they buying? (15:36) I have many different kind of ICP, but you know, I think of them like, who is this avatar?

(15:43) Is it a CEO of what? (15:45) Are they a CEO of a hospital? (15:46) Are they a CEO of a casino?

(15:47) Are they a CEO of whatever? (15:49) And I would say it changes for me a lot of times over the last 10 to 16 years of being in cybersecurity, who I, who I work with and who I focus on has changed and it continues to change. (16:01) So kind of to your point, the micro, the micro campaigns, maybe you do a campaign that’s targeted towards CEOs and there’s a completely separate messaging for CIOs because what is keeping a CEO up at night is very different than what is keeping a CIO up at night.

(16:18) So getting contacts to who we’re talking to, you know, what, what matters to them is really important. (16:26) And so I want to talk a little bit about, you know, playing the game from start to finish. (16:34) I think a lot of times, a lot of my founder friends, they, you know, they just start the business and they go, whoever’s going to buy it as soon as possible, we’re going to sell that to that person, right?

(16:45) Whoever’s buying, we’re taking it. (16:46) Right. (16:47) But you have bootstrapped, you have raised venture capital, exited, shut companies down, acquired startups.

(16:55) Like you’ve like literally done it all. (16:57) What changes in the way you think once you have seen pretty much nearly every impossible or possible outcome?

Alex

(17:06) Yeah, to me, so there, there are a couple of kind of traps in entrepreneurship that are, that are bigger than the other traps. (17:13) I think it’s always, somebody described it as getting punched in the face every day. (17:16) And there’s a bit of that, that never stops.

(17:18) But I think that the, um, the, the biggest traps I think right now are wanting venture capital. (17:27) Like I don’t, venture capital is not the achievement that people think it is. (17:32) And I think it’s, it’s, it’s, it can be a trap, right?

(17:36) By the time you’ve raised a Series A, you as a founder will own less than 35% of your company. (17:41) So it better be a really big opportunity for it to be worth giving up, you know, 65 to 70% of it, um, in a year and a half, right? (17:50) Like, so yes, if you’re one of these AI rocket ships that needs to go buy a billion dollars worth of hardware, like maybe that’s a good choice, but very, very few companies actually are that are going to succeed at that level where it’s worth selling that much of the company for venture capital.

(18:08) Um, and there are like three VC firms that actually add value. (18:11) The rest of them just say they add value, but like they’re all really good at telling you that they’re going to like help you with a bunch of stuff and they don’t, they give you money. (18:18) That’s very helpful, but I wouldn’t expect much more than the money, um, from most firms.

(18:23) And so I think there’s the one big trap is like, you know, you get talked into the venture marketing world. (18:29) It’s great for, for some people it’s critical for some businesses, but it’s not a great fit for most, and it can really destroy great businesses if, you know, if done wrong. (18:38) So that’s, that’s one where I think, you know, if your audience is thinking about that, it’s just, it’s something to really think hard about.

(18:45) Um, and why we’re bootstrapping this time, we can build an okay business of five to $10 million a year, and it like, we’ll be rich and we’ll be able to do what we want. (18:54) Whereas if we built a five to $10 million business, having raised as much as some of our competitors raised would be complete failures. (19:01) We get zero for it.

(19:02) We probably, you know, look back on this as a giant waste of time, right? (19:05) So very different outcomes purely based on capitalization and who the money came from. (19:11) I think the other one, um, the, you know, the other, the other big trap is, uh, well, I think the big one is like not shutting it down if it isn’t working.

(19:23) So, um, and I, I think it comes from the scarcity mindset. (19:26) And so the biggest unlock for me as a founder and advisor to founders is just not saying that I need stuff, not even thinking that I need stuff. (19:36) I think that, or you mentioned like, I need a customer, like anybody getting people who buy fast is great, right?

(19:41) Like that’s, you know, that’s why we target startups. (19:45) Like we want to work with companies that don’t have a procurement department, right? (19:49) Because I’d rather have a thousand dollars now than $50,000 six months from now after we go through procurement.

(19:55) Right. (19:55) So, cause I can do that a bunch. (19:57) Whereas, you know, I only have so many procurement departments I can manage at once.

(20:00) But, um, but I think that the, the need that that comes from the scarcity mindset of like, I need this logo, or I need this revenue, or I need this customer. (20:11) And there are definitely customers probably know who you are, if you’re watching this, who were bad fits, who we let on the platform anyway. (20:17) Right.

(20:18) And then they turned, but they also like burned a bunch of time and emotional energy. (20:22) And you know, we’re like, we should have just been like, look, it’s not a fit. (20:25) Your business isn’t a very good business.

(20:27) Email is not going to work for you. (20:29) We’d rather not take your money. (20:30) And just like, you can go spend your money somewhere else.

(20:33) Then like take on the brain damage of dealing with you as a person and you as a business. (20:38) And so I think that, um, I think that the scarcity mindset is really dangerous. (20:42) And that leads to this, like, you know, I can’t shut this company down because I needed to succeed mindset, which is, which from a life standpoint is happened to me.

(20:52) It happens to almost every founder I know it’s, it’s really dangerous, right? (20:55) It’s better to, to not need stuff. (20:57) Cause then you can look at stuff as a choice, right?

(20:59) Like, do I want to work on this business anymore? (21:02) Do I want to work with this customer? (21:04) Um, it’s, it’s tough if you don’t have revenue, like I’m not saying it’s easy, but I think that’s, it’s a tough choices that define us as people and define us as companies.

(21:12) And I think the earlier you recognize that and can make that tough choice, the more successful you’ll be in the long run.

Melissa

(21:20) Yeah. (21:20) And I love that you said that it’s so funny. (21:22) I, uh, I worked for a company that wanted all the customers, right.

(21:26) All the customers. (21:27) And sometimes the, the 5% of the customers that I didn’t want to work with took 95% of my time. (21:36) And so the customers that were actually buying the most, that were the easiest to deal with, they didn’t get as much attention because it’s the, you know, the bad eggs that really take the most time.

(21:47) And so I love kind of choosing who you work with and picking the clients that, you know, make sense to work with. (21:54) And so I’m curious to get your perspective on, you know, early decisions. (22:00) You know, I think a lot of times when you’re starting a company, you make decisions and sometimes you go back and you’re like, oh my gosh, I wish I did not, you know, make that decision.

(22:10) Are there any, you know, things that you, I think we, you know, the point is we learn from our mistakes, right? (22:16) When you shut a company down and teach you, it teaches you a lot about, you know, what you should have done differently versus, you know, successful exits. (22:24) So any perspective on that?

(22:26) Today’s episode is brought to you by Renaissance, redefining success for modern Maverick, a book I coauthored with Michelle Kine. (22:36) It’s a straightforward guide through reinvention, leadership, and building real freedom. (22:42) Inside you’ll find practical frameworks, the Maverick test, and stories that help you take action today.

(22:49) Pick it up at executiveconnectexperience.com forward slash Maverick. (22:55) Use the code EXEC for 10% off.

Alex

(23:00) Yeah. (23:00) And we’re going to learn a lot from successful exits that aren’t, maybe doesn’t translate to the next business, but, but the, I mean, so Skip, I’m fortunate in that. (23:11) I don’t think we haven’t really done anything major that I would consider a mistake or I would do differently.

(23:17) There’s certainly stuff I would do differently knowing what I know now, but that’s cause we learned a bunch of stuff. (23:21) If you go back to when you made the decision, you knew what you knew at the time. (23:25) You can’t, you know, can’t pretend you’re 40 making decisions as a 20 year old.

(23:29) Like you don’t learn that stuff until you’re 40. (23:31) So I don’t, I don’t think there’s anything where I’m like, oh, that was a bad choice and we made the wrong choice. (23:37) With my last company, there were definitely a bunch of bad choices.

(23:40) And then it all came from the scarcity mindset and needing stuff. (23:43) Like we raised a bunch of venture capital because we thought we needed salaries, right? (23:48) We needed, like we needed resources, we needed salaries.

(23:51) And like, we would have been better off just spending three months talking to customers and finding out that it was a bad idea than spending seven years, you know, trying to make good on the money we raised, trying to find product market fit in a space that was a really hard space. (24:06) So that’s, I think a big one is like, you know, for me, it was like, we, you know, just raising money was a mistake. (24:13) I think the next thing that was a mistake was, you know, we, it was pricing is an area that I’m very passionate about, but I wasn’t, I mean, I am now, but at the time I wasn’t really a pricing expert.

(24:25) And so this goes back and forth. (24:27) Like there are a lot of startup founders that aren’t an expert and it’s because they’re not an expert that they challenge the status quo like Brian and the Airbnb team, like they didn’t know a thing about travel, right. (24:37) But they were really good at design and they wanted to run out their couch.

(24:40) And so, right. (24:42) They built something that like nobody in the travel, I was in the travel industry, like nobody saw that one coming. (24:47) Same with Uber, like Ryan Graves and Travis, like they weren’t, they weren’t experts in ground transportation for the taxi industry, but they, you know, they had a vision for something different.

(24:58) And, you know, it was them not knowing stuff that led it to be so successful. (25:02) So I think that, that it’s a tough balance, but especially if you’re a mid-career professional, like you need to know the material and they’re like, we brought on like a Columbia business school professor of pricing, the guy who ran pricing at Uber as an advisor, but that’s not the same as really like having an insight that nobody else has or that only you can have. (25:25) So those are the two big ones.

(25:26) I mean, I think like, again, venture, I’m not saying venture capital is a bad thing. (25:30) Venture capital is a great thing, but it’s a great thing for certain people in certain businesses. (25:35) And I think it’s, it can be a bad thing for businesses that aren’t a good fit.

(25:39) And just raising it as a default is a mistake. (25:43) And this, you know, this seems true for, you know, for, there are lots of businesses out there, but maybe you’re not the right person to start that one. (25:50) Like you’ve got to, you know, you’ve got to really know it cold.

(25:54) I think in order to make that leap.

Melissa

(25:57) Yeah. (25:57) And I think really understanding when you’re packaging, you know, and pricing things, you know, how do we get to monetization the fastest? (26:07) How are we, how do we make money on what we’re selling?

(26:11) Right. (26:11) And so I think a lot of companies, at least that I’ve been sold to, they’re like, these are all the features and this is the tiers of choices and, you know, which one do you want? (26:23) And I look at sometimes choices and features.

(26:26) I’m like, well, I don’t care about that. (26:27) I don’t care about any of that. (26:28) And so, you know, how should founders design offers around the way people actually experience value?

(26:35) So it’s one thing to charge something. (26:37) It’s a whole nother thing for people to get, you know, the feeling that they’re getting value in what they’re spending.

Alex

(26:44) Yeah. (26:44) So this, this could be a whole podcast on its own, but I’ll try and kind of summarize it into like three or four principles. (26:52) So the most important is, I think the most important principle in pricing is the fairness principle.

(26:59) So like the price has to be, be perceived as fair. (27:04) And it’s a huge hack if you’re selling into an existing market, because if you price your service around what everybody else is charging, like it will automatically be perceived as fair. (27:14) Not that that’s always the right choice, but you know, you, you like, you’ll do much better if there’s some sort of fairness method, whether it’s related to competitors, related to other things that that customer charges.

(27:28) Obviously for Monopoly, there’s, you know, like Nvidia right now, there’s, you know, it’s, they still charge fair prices. (27:34) People are still willing to pay them. (27:35) But so, so I think like bearing that in mind, I think that the main cord in pricing is that value exchange of like, how much value are we creating here?

(27:45) You’re never going to extract all of it, probably aim to extract around 10% of it. (27:51) And realize that like, there’s a difference between price and selling on value. (27:55) So selling on value is like, Hey, Melissa, if you had an email tool that got you 10 meetings a month, right?

(28:03) What, what do you sell your product for? (28:05) Like, you know, a hundred thousand dollars, right? (28:06) What’s each meeting worth to you?

(28:08) $10,000. (28:09) So you’re a 10% chance of closing it. (28:11) Right.

(28:11) So like the value is if you use this tool and it gets you 10 meetings, it sort of expected value of that is a hundred thousand dollars a month. (28:18) Are you going to pay a hundred thousand dollars a month for an email tool? (28:21) No.

(28:22) Like that’s insane. (28:23) Right. (28:24) But, but being able to articulate that value and then, you know, like, are you going to need a discount on a $600 a month email tool?

(28:34) It’s like, well, I mean, do you want the thing to work? (28:37) Like what’s the hundred dollar discount going to do when the value here for you is a hundred thousand? (28:42) Like that’s the difference between selling, you know, the price and the selling on value.

(28:46) Like the value is establishing the value. (28:49) The price is the price and the price has to work and relate to the value you create. (28:53) Cause if it costs $200,000 to send the emails and they’re only worth, you’re not going to do it.

(28:58) Right. (28:59) Even if it costs a hundred thousand, you’re not going to do it. (29:01) But but you want to make sure that the customer has articulated the value.

(29:06) And that’s a big thing. (29:07) Early stage founders fail them because they’re, they’ve nerded out. (29:10) They’re experts.

(29:11) They know the market. (29:12) They know more than their customers. (29:13) Right.

(29:14) And they don’t listen to like, how much is it worth? (29:17) How much is a meeting worth to you? (29:18) Like, you know, they’re like, you should just use my product.

(29:20) So I think, you know, being, having fair pricing and fairness is also like not paying for stuff you don’t use. (29:26) Nobody likes doing that. (29:28) It’s not a bundle that’s like, oh, you have to pay for a thousand, even though you only need four.

(29:32) Right. (29:33) Like, so that perceived fairness also matters within your pricing structure. (29:37) And you’ll have people not convert just because it’s like, I don’t like your pricing.

(29:40) I mean, I left deal, I left Rippling for deal because Rippling charged you per, per employee, even though you’ve let them go, like after a layoff or whatever, you would still for the rest of your pay for that employee. (29:54) And I was like, deal was more expensive, but it just bothered me that I was paying for stuff I wasn’t using. (29:59) I was like, no, I’m going to switch.

(30:01) Cause like, you guys are jerks. (30:02) You’re charging me for something I don’t need. (30:05) And so the perceived fairness is, is, is, is what happens there.

(30:09) So, I mean, those two things are the big ones. (30:11) I think then when you come into like the packaging and pricing, it’s just really important to decide whether you’re going with the flow, pricing the way the rest of your industry does, or whether you’re counter positioning. (30:22) So, you know, in our industry, we counter position, everybody in our industry charges for credits, charges for tokens, charges for all these little upcharges.

(30:30) And we just have packages that have everything that that ICP needs. (30:34) So if you’re on our team package, like that’s what you need. (30:37) And I’m sure you can add more to it, but like, we don’t want you to be mid workflow and then get a pop-up that says, oh, pay us 25 bucks because you need, you know, you need to upgrade, right?

(30:47) Like nobody. (30:48) So, whereas all of our competitors do that. (30:51) And in our view, it’s like the way we’re going to be different is to counter position against that.

(30:55) Agree.com is a good example. (30:57) Like they, they do free signatures might be interesting to your, to your, you know, your community. (31:03) They like, it’s pretty cool.

(31:05) It’s, it’s free e-signature instead of DocuSign or HelloSign or one of those, it’s free. (31:10) They make their money from you being able to pay on that platform and taking a cut of the payment. (31:15) So it’s like, you can send a contract and get payment for it right there.

(31:19) And their innovation is like, their pricing is kind of hidden in that transaction fee, which, you know, isn’t egregious. (31:27) It’s not like some huge number, but it’s, it’s like, yeah, we don’t need to pay for the, we don’t need you to pay for the signature platform because we’re making money from it as a payments company. (31:35) And so anyway, however you position that, like you really want to understand your customer, understand the value, right?

(31:41) They don’t, they’re not saying like, oh, we charge 1% and Stripe charges one and a half percent, right? (31:46) Their value is you’ll get paid faster. (31:48) Like you’ll get paid a week faster, right?

(31:51) And so, or you won’t have to chase people for the invoice and you’ll, you know, half of the people that never paid you will actually pay you because we’re going to chase them for you, right? (32:00) There are all these other sort of value props that they provide, right? (32:04) That are value that make it worth paying 1% for them to process the payments.

(32:10) So anyway, I mean, to me, it’s those, those are the three big ones are, you know, being fair, really understanding what that value is, but not necessarily, but realizing that price and value are not the same thing. (32:24) But making sure you articulate the value in the sales process and then packaging it in a way that’s either conforms to your industry or is like counter positioned intentionally against your industry. (32:35) And that is not over just 10% is expensive.

(32:38) Like that’s not a thing, right? (32:40) Like, so.

Melissa

(32:42) Yeah, it’s so true. (32:44) I think just understanding it and funny enough, I was going to kind of switch gears a bit and talk about AI. (32:51) I’d be, you know, missing a great opportunity.

(32:53) And I think AI is changing how we research markets. (32:57) We identify customers, we create campaigns, we support sales, like it’s much easier than it’s ever been to do all the things. (33:05) I’m curious to get your perspective on where you see AI creating a go-to-market strategy or leveraging, you know, a real go-to-market incentive.

(33:18) Like, is there…

Alex

(34:05) Yeah, I mean, it’s a weird time. (34:08) Everything’s changing so, so fast. (34:10) I think that a couple of thoughts on AI, especially for like CEOs of established companies or founder CEOs of going concerns is that it’s, to me, the big thing with AI is that it is a mindset shift around not doing more with less necessarily, like, although that is a thing, but taking like fewer people taking more responsibility.

(34:34) Because you can have one marketer that’s running email campaigns, setting up landing pages, updating your website, that used to be a couple agencies and probably five employees, right? (34:46) And, you know, if you have a product idea, like your team should be able to ship it in less than a week, like there’s no reason to spend a long time building stuff anymore because of the AI tools that are out there, whether it’s go-to-market or product. (34:58) And so, I mean, I think that’s the mindset shift.

(35:01) I think in AI, there are all these tactics that people are doing that are incredibly effective. (35:05) So, obviously, you have outbound campaigns. (35:10) Those don’t exist on their own, like this is in 2020, you can’t just send a bunch of emails and expect customers like you were talking about in a transactional way.

(35:18) Right now, it’s part of a customer journey. (35:19) You’re driving into a conference booth, you’re making them aware of a webinar, right? (35:23) You’re inviting them to a dinner, like those things work great.

(35:26) Just being like, hey, I saw your CEO, do you want to buy my crap? (35:29) Like that doesn’t work at all. (35:30) Or do you want to talk to sales?

(35:32) Do you want a salesperson to harass you for the next six months? (35:34) Like, no thanks. (35:35) So, I think like in the context of your customer journey, outreach plays a huge role.

(35:41) And it plays a huge role in driving awareness at the top of the funnel. (35:44) It can play a huge role in converting people who are kind of close to converting at the bottom of the funnel. (35:49) But that’s just one thing, right?

(35:51) You’ve got a bunch of great tools for building video ads and image ads and other ads like that. (35:58) You can take one clip and turn it into 20 ads using some of the AI video tools that you are indistinguishable from regular videos. (36:09) There’s LLM optimization.

(36:12) So, a big part of go-to-market is being found by agents because I’m not going to ask, you know, I mean, I’ll ask people sometimes like, hey, do you know a good email sending tool? (36:21) But most people just go to cloud or chat GPT and say, hey, do you know a good email sending tool? (36:25) Or Google Gemini, right?

(36:27) And so, if you’re not in those answers for what you do, you’re missing out on a huge chunk of the market. (36:33) And a friend of mine just published, like they have a three times higher conversion rate from that traffic than any other traffic because that person’s probably chatted with chat GPT for a while about that and decided they do want to buy it. (36:44) And so, when they show up on your website, like they’re ready to buy.

(36:47) So, you know, those things are huge in terms of like structuring your website for that, you know, watching, using the tools that give you visibility into how you’re performing and measuring. (36:59) Like the measuring is less important than doing the basics, but it’s important to measure as well. (37:03) So, those are just a couple areas where, you know, AI is impacting go-to-market.

(37:10) But I think if I’m a manager of people or an owner of a company, I’m not thinking about how do I cut headcount and reduce costs. (37:20) I’m thinking more about, or even do more with less. (37:24) I’m thinking about like, how do I enable my team to take more responsibility and do more of a job at the level I expect, like as an individual.

(37:33) And it turns out at some point, you’re like, I don’t want to hire another person. (37:35) I’ll just have Claude do it, becomes the better answer. (37:39) And so, that’s a big mindset shift.

Melissa

(37:41) What’s one piece of advice you would give early stage founders on go-to-market?

Alex

(37:46) I mean, I think it’s focused on the customer, right? (37:48) Just talk to as many customers as you can. (37:52) Talk to customers even, you know, before you have a product to validate your hypothesis.

(37:56) I mean, this is not new. (37:58) Everybody’s always said this. (38:01) But I think it’s really tempting now because you can be so productive in Claude or other coding tools that like, it’s so much fun to do that you, you know, you forget to go talk, go leave the building and go talk to customers.

(38:15) And so, you know, I think that that’s like, if it’s one piece of advice, it’s like, you still need to talk to customers.

Melissa

(38:22) Like, how do you measure that? (38:23) I think a lot of times we’re going to send out 100 emails. (38:26) We’re going to go pick five customers.

(38:28) You know, I think a lot of times we find our ICP, we build the list, we send it, we go see customers. (38:35) And then we’re like, okay, nothing’s happening. (38:38) Let’s change directions.

(38:39) Let’s completely do a pivot. (38:41) Now we’re going to focus on these 100 customers in this jurisdiction. (38:45) But I think like a lot, we’re just switching things so fast.

(38:49) We’re not giving it that time.

Alex

(38:50) Yeah, it’s the shiny object syndrome, especially founders. (38:53) I’m a founder. (38:54) I do this all the time.

(38:54) It’s like, oh, Google’s not working. (38:55) Let’s go do meta. (38:56) It’s like, well, you’ve been doing it for two weeks.

(38:58) Like maybe you need to like give it more time or try different creative. (39:03) So everything, you can break down every process into the sub components of that process. (39:10) And so I think with email or LinkedIn outreach, again, they’re part of a larger universe of go to market action.

(39:18) So if you have a terrible website or you don’t have a LinkedIn presence and you’re studying LinkedIn outreach, like don’t expect good response rates until you fix those sort of adjacent important things. (39:29) Nobody clicks emails anymore. (39:30) I know you work in cybersecurity, right?

(39:31) Everybody’s been trained not to click on emails, but like they’ll still go to your website. (39:36) Like we have a tool that lets you see who went to your website that you emailed, even if they didn’t click, because obviously that’s valuable to you, right? (39:44) Like if you got somebody who you wanted to learn about your company onto your website, knowing that they went there and looked at a bunch of pages is valuable.

(39:53) So like I break it down into different pieces, right? (39:56) You have your open rate, which is really driven by like, was the subject line good? (40:00) Were we targeting the right people?

(40:03) It might also be driven by the industry. (40:05) Like there’s some industries that don’t check email on Mondays, so don’t email them on Mondays, right? (40:08) So you have to know your ICP and like the avatar that you’re reaching, know their habits.

(40:13) If they play golf on Fridays, maybe not a good day to email them. (40:17) So, so there’s that aspect of it. (40:19) I can’t, I mean, most golf courses are closed on Mondays, so maybe that’s a good day to email them.

(40:24) But, but so, you know, there’s the, there’s like the open rate, there’s the subject, you know, the actual body of the email, right? (40:31) There’s the offer, what’s going on in the industry is the offer. (40:34) Like, are you asking them if they want to talk to a salesperson?

(40:36) Because most people don’t want to do that. (40:38) Are you instead, you know, giving them something of value, right? (40:42) And is it like something you think is valuable, but they don’t, or do they think it’s valuable?

(40:46) And so coming, figuring out like, oh, we’re getting, we’re getting people to answer, we’re not getting people, we’re getting people to open, we’re not getting replies, like, or we’re not getting meetings booked, or we’re not getting the form filled out, like, what can we do there? (40:57) And so, like, it’s a process. (41:00) I mean, I would say it takes about a quarter to figure out if it’s going to work.

(41:03) If it, I mean, there’s a chance it works on day one, it’s low, but it happens. (41:08) But if you haven’t, if you’ve been actually like putting energy into it, in any of these channels, like paid ads, meta, whatever, after a quarter, and they’re not working at all, then they’re, you know, then it may be time to try something else. (41:20) But, but you have to break it down into those component pieces.

(41:23) An example, I mean, we, so I post on LinkedIn a bunch, and a couple posts go viral, one had 100 and something thousand views, which is seemed like a lot. (41:31) And I was talking to a friend who also has had posts going viral. (41:34) And he’s like, how many demos have you got?

(41:35) And I was like, I don’t know, maybe 10 or 15. (41:37) And he’s like, I my post, I got 100,000 views, I got 200 demos out of it. (41:41) And so he went through my LinkedIn profile.

(41:43) And he was like, Oh, we need to make you need to change these two or three things. (41:46) Because, you know, they just aren’t hitting. (41:49) And I know that because if they are hitting, you would have gotten 200 demos, right?

(41:53) So I mean, we can always be improving the little pieces of it. (41:56) And I think that’s, it’s easy to be like, oh, this sucks, I’m going to go do the other thing. (42:01) But I think the more effective thing is to be like, really give yourself the time to invest in getting the thing right, breaking it down into the components, getting each component right.

(42:12) And then if it doesn’t work, you can put it down forever. (42:16) Whereas you don’t want to go you know, you don’t want to come back to try the other thing for a month, it doesn’t work, you come back to the thing that you have asked the first time, right? (42:23) You want to put in the effort to make sure you did it.

(42:25) The experiment.

Melissa

(42:26) Yeah, I agree. (42:27) I think people don’t give it enough time. (42:29) We’re so used to things happening quick, our Amazon package arriving, you know, the laundry being delivered to our door, all the things happening quick, but it does take time and to give it time and pivot where necessary.

(42:41) So for founders that are listening today, who have a strong product, but they are seeing inconsistent sales or revenue, what would you tell them to do over the next 30 days?

Alex

(42:53) So I always go back to basics. (42:54) I’m not selling email software. (42:56) You got to go see how you got those customers that were successful.

(42:59) Like go back and be honest with yourself about what was working that got you to the point where things were good. (43:05) And my bet is you started doing something else, like, you know, the shiny object syndrome thing, and you stopped doing the thing that was working, and just stopped doing the thing that’s not working and go back to what was working like at least as a as a beginning. (43:20) Of course, your market might have changed or a bunch of other things that might have happened.

(43:23) But, but most founders that go through that journey, stop doing the thing that was working because they were bored with it, or whatever. (43:31) And if they just go back and do the thing that works more, they’ll, they’ll experience success again. (43:38) And then you can figure out what you okay, even if you’re bored, you don’t want to do it, right?

(43:41) You can figure out what happens next. (43:43) And it’s subtle. (43:44) I mean, it’s stuff like, you know, you’re reaching out to people on LinkedIn by hand, and you forgot, or you didn’t do it for a while, or you went to a conference, and it’s a summer and there are no conferences, businesses slowed down.

(43:55) Yeah, you haven’t been to a conference in two months might be why. (43:58) So you know, there’s no like super easy solution to the conference problem. (44:04) But, you know, it’s it’s being aware of what was working as a starting point to figuring out how to fix it.

Melissa

(44:10) Yep, I love it. (44:11) I think it’s such great advice. (44:13) Thank you so much for being here and sharing your knowledge and time with our listeners and for founders who are looking for more insights about pricing growth or building an event or an exit, please visit us on YouTube or wherever you podcast and for more conversations and insights with founders, please follow us on the executive brief.

(44:36) Thank you so much for being here, Alex. (44:38) That’s executive connect.