The Art Of Pricing For Growth
From solid venture financial planning to balancing growth and profitability, going from startup to enterprise and exit planning 101 – we’re here to add value at every stage of your innovation journey:
Startup Phase
Growth Phase
Scale/Sale Phase
Your First 5 Hires Can Make or Break Your Startup
Hiring the right first employees can set a startup up for success or slow it down before it gets traction. 1) Early hires should be generalists, not specialists, says Offerzen co-founder Philip Joubert here, noting that startups need adaptable people who can handle multiple roles. 2) The best candidates won’t come through job boards, according to former HouseMe founder Ben Shaw, who advises using personal networks, talent marketplaces like OfferZen, and direct outreach. 3) Compensation isn’t just about salary — startups win by offering equity, career growth, and learning opportunities to attract top talent. Moving fast and prioritising adaptability and mission alignment is key to building a strong early team.
Solid Startup Financial Planning
Most startups fail because they run out of cash, says YC CFO Kirsty Nathoo. 1) Founders must track three core numbers from day one: bank balance, burn rate and runway — without relying on accountants. 2) Burn rate = money in – money out, and runway = cash balance ÷ burn rate. However, many founders fudge the numbers, leading to unexpected cash crises. 3) Hiring and paid acquisition costs more over time, so startup expenses don’t stay flat. Nathoo warns that investors see you as a risk if you have less than 12 months of runway. So plan ahead, and raise before you need it.
When (and How) Founders Should Pay Themselves
Founder salaries are a balancing act between survival and runway, says June founder Enzo Avigo. 1) Many start with bare-minimum salaries or none at all — Paul Graham’s "Ramen profitability" model — but modern investors know founders can’t build if they’re worried about rent. 2) The salary addiction trap is real — delaying pay too long leads to burnout but overpaying drains resources. Founders should pay enough to focus but not too much to raise investor concerns. 3) Benchmarking helps — Avigo’s data shows US founders typically earn $75K at the seed stage, $150K after $5M is raised, while EU founders earn less. No SA data is available, but it should follow similar patterns. Remember, though: Long-term wealth comes from equity, not salary.
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Pricing for Growth and Profitability
Pricing isn’t just a number — it’s your biggest profit lever, says German businessman Hermann Simon. 1) A 10% price increase doubles profit, while a 10% volume increase boosts profit by just 40% — most startups underestimate pricing power and focus too much on selling more. 2) The right model matters: Apple’s premium pricing captures 90% of smartphone profits, while Lexus raised prices over time as brand trust grew. 3) Price discrimination unlocks more revenue — tiered pricing (based on usage, features, or customer type) lets companies capture more of the market while maximising profits. Smart pricing drives both growth and profitability. Get additional insights in this video.
A Community Growth Strategy
Community-first startups grow faster because engaged customers drive referrals, reduce churn, and provide real-time feedback, says UK FinTech Yonder’s Tom Davies. 1) Define a hyper-specific audience — Yonder targeted young London tech professionals, ensuring community relevance. 2) Engage at the right time — they invited users to join Slack at peak excitement (after activating their credit card), making participation feel exclusive. 3) Turn feedback into action quickly — users saw their suggestions implemented in real-time, reinforcing loyalty. A well-built community doesn’t feel like marketing — it’s a growth engine.
Monetisation vs. Growth: Balancing Revenue with Acquisition
Scaling vs. profitability is a strategic trade-off, and timing matters. CleverTap shows how many growing ventures used free trials, frictionless signups, and creative monetisation to acquire users without killing growth. Meanwhile, Reforge CEO Brian Balfour highlights retention as the real growth engine: higher retention lowers CAC, increases LTV and boosts monetisation. 1) Prioritise growth first in network-driven models. 2) Monetise carefully without hurting virality. 3) Improve retention to outspend competitors and scale profitably (Spotify, Pinterest). The key? Focus on retention. It fuels both acquisition and monetisation.
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How to Structure Your Company for Scale
Scaling isn’t just about growth — it’s about structure. Multi-location hospitality brand founders June Rodil and Tiffany Derry break it down in this video: 1) Use a holding company model – Rodil structured her business with a holding company and separate (Pty) Ltd entities for each venture, ensuring independent growth with centralised oversight. 2) Outsource instead of overhiring – Derry treats legal, accounting, and creative roles as professional fees, not fixed salaries, keeping costs flexible. 3) Tie leadership to ownership – instead of hiring managers, Rodil gives key personnel equity stakes, ensuring long-term commitment. The right setup makes scaling smoother and more sustainable.
Growing From Startup to Enterprise 101
Scaling means knowing when to evolve leadership without slowing things down. McKinsey’s research on high-growth startups offers key lessons: 1) Introduce middle management when complexity rises – startups that scaled from $10M to $100M ARR doubled headcount annually, making structured leadership essential. 2) Keep decision-making fast – more layers shouldn’t mean more bottlenecks; data-driven decisions and clear planning keep execution agile. 3) Hire leaders suited for your growth stage – some startups bring in experienced execs early, while others scale leadership incrementally; what matters is deliberate timing. Growth isn’t just about revenue, it’s about scaling leadership the right way.
Crucial Founder Exit Planning Steps
While the exit/sale process itself might require only 12–24 months of preparation, maximising value requires on-point planning, says serial founder Seth Greenblott. 1) Structure finances early: 70% of listed businesses don’t sell, often due to messy books; so clean, audited records are key. 2) Making yourself replaceable: a business that’s too dependent on the founder is a red flag for buyers. 3) Knowing your exit options: private equity, strategic buyers, or internal succession all require different planning. The best exits aren’t rushed — they’re built step by step for a smooth transition and the highest possible sale price.
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