Sticktoitiveness

If it were easy, everyone would do it.

I've heard that calloused catch-phrase plenty in my life, but never has it rung more true or appropriately than after encountering the difficulties of launching a startup. If it isn't one thing, it's surely going to be another. Partnerships go sour, marketing efforts prove unproductive, coordination between team members becomes edgy, funding withers.

Then there are the victories that keep you going. A game of golf comes to mind. A triple digit round filled with frustration and muttered curse words is easily overshadowed by one or two perfectly executed shots, where the club struck the ball exactly as you hoped it might, and your eyes followed its smooth and even trajectory as it gracefully descended toward its target.

The important thing is to have faith in the product. If you have a thorough understanding and commensurate confidence in your company's potential, the requisite stumbling blocks feel fleeting. Even when they pile up enough to make you re-analyze enerything you thought you once believed, my message is to persevere. [Within reason, of course. The "Stay the Course" mantra has been known to have its downfalls when employed outside of the realms of sanity.]

The catch that invariably exists is this: if the product or service is innovative, there will be an inevitable pushback until adoption, resulting in countless frustrations and difficulties that hinder launch. If the offering is not innovative, then you're shackled by a pre-existing marketplace and competitors.

So, when you start sending in those applications to grad school, lunging for stability and almost certain that your company's fate has been sealed, hold out for a few extra days. It can make all the difference.

The Psychology of Pricing: To Bundle or not to Bundle

The way a price is perceived is as important, if not moreso, than the price itself. Prevailing theories as to effective pricing are widely varied, and startups aiming to monetize must choose which is the most appropriate fit for their product or service.

A study published in 2006 entitled "The Framing Effect of Pricing" by Marco Bertini (London Business School) and Luc Wathieu (Harvard Business School) addresses this topic. Amongst their conclusions is the belief that the psychology of price as it perceived by consumers is, in fact, much more complex than anticipated by standard economic principles.

A much debated issue within pricing is that of partitioning or, conversely, bundling the total price to include all subject fees to make the good or service more attractive to potential consumers. It has been argued that partitioning prices increases customer demand by reflecting an affordable base price, while anticipating that consumers will insufficiently adjust for remaining charges.

The opposite has also been argued. Some researchers have posited that mental accounting principles dictate that multiple losses are perceived as more punishing than a single loss of equal value. If correct, this theory implies that a single price is inherently more effective than a partitioned one.

"The Framing Effect of Pricing" concludes that price partitioning can have both positive and negative effects, but, more importantly, that the decision to partition or to bundle will impact the way a product's multiple dimensions are processed. In other words, it will cause consumers to adjust the method they use to evaluate a service. Ultimately, it is recommended that companies who wish to focus on differentiating a primary attribute of the offering while de-emphasizing secondary attributes will most effectively reach their target audience by employing an all-inclusive price. Firms who wish to distinguish their product/service by its secondary features might find more success with partitioned pricing, as it also serves as a disctraction from any weaknesses in the primary service offering.

Welcome to Shotgun Startup

What is Shotgun Startup?

Shotgun Startup is a road map to conceiving, creating, and launching an Internet business. As founding members of a financial services startup in the San Francisco Bay Area, its contributing authors will shed light on the challenges, missteps, and solutions to building a company.

We are applying the laws of metrics driven marketing by taking a procedural approach to optimizing conversion, then scaling efforts to maximize potential gains.

As we coarse through these steps, we will isolate and identify tips and tricks that have helped us along our way.

Thanks for reading and good luck.