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As I circled the grocery store parking lot, kids conked out in their carseats, my cell phone blurted out the answer:
"Absolutely price discriminate!"
The criminal-sounding advice relieved the tension in my mind like a swift adjustment of C1.
The year was 2012, and my co-founder and I were in the midst of taking our B2B SaaS upmarket. And as our sales leader, trekking deeper into the foreign (to us) land of F500 logos with their various buying processes and willingnesses to pay had knotted my brain.
In truth, there was nothing criminal about it. The investor spoke from decades of experience to clarify what I hadn't yet grasped: I wasn't standing in front of an efficient, mass-market equilibrium, toying with the knobs of supply and demand. I was an auctioneer with a handful of rare items on display before a mixed crowd. To assume there was going to be any consistency in what those items cost or what those onlookers were willing to pay for them was a false idea I needed to shake.
And shake we did! Over the next 7 years, we would test and discover enterprise pricing that took us up the ARPC (average revenue per customer) mountain from $2,000 per year to $200,000+ per year. Anything short of "Contact Us" and custom pricing would have been a crime, not for our customers — who always felt we were leaving plenty of value on the table, but for our shareholders, who were depending on us to figure out how large our market really was.
Yes, along the way we added major features after deepening our understanding of the problem space, which continued to justify those new prices. But that construction would also not have been possible had we shied away from price discovery — not through a self-checkout, but through conversations that took courage. And then through consultation, underwritten by a fair price.
We get in trouble when we bring mature market assumptions into data-impoverished market discovery before fit. Supply and demand curves, elasticity, and other laws will come later. For now, treat each enterprise prospect as a market of one.