This section covers all aspects of pricing products and services, from determining standard prices to offering sales, discounts, and freemium products.
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In almost every two-sided market, one side is harder to acquire than the other. The most common way to attract the hard side is the ladies’ night strategy: reduce prices for the hard side, even to zero (e.g. Adobe Flash & PDF for end-users), or below zero (e.g. party promotors paying celebrities to attend).
Enterprise-focused VC’s sometimes refer to products priced between (roughly) $5k and $100K as falling in the “valley of death.” Above $100K, you might be able to make a profit given the cost of sales. Below $5k you might be able to market your product, hence have a very low cost of sales. In between, you need to do sales but it’s hard to do it profitably.
The ideal division allows the free product to be an independently useful, non-annoying, non-expiring standalone product, while still leaving room for the paid version to offer sufficient additional value that some acceptable percentage of your users will upgrade.