Pricing The Value Proposition in Start-up Environment : A multi case study on start-up Pricing

Abstract: Pricing is one of the most critical factors for a company to thrive in the market. Unlike big companies, there is no pricing data available for startup companies. Pricing is one of the factors for startup failure. To reduce the startup failure due to pricing, this research data was collected by conducting semi-structured interviews with seven different startups from different industries in both B2B and B2C setups. The interview was recorded and transcripted. Understanding startups’ challenges and methods used in pricing practice and proposing a framework to develop a better pricing strategy was done by analysing aggregate perspectives from transcribed data. This research found that fundamentally there is a lack of knowledge in pricing, product-focused development, pricing strategy based on cost-based pricing, challenges in communicating the value and comparing pricing with competitors, and difficulties in understanding the value received from surveys, WTP and value offered. The proposed framework is designed to bring a pricing perspective along with the product/service development process addressing identified issues in B2B and B2C setups.