Minimalist Pricing
Set an initial price, pick cost-based vs. value-based, and plan your tier structure — anchored by the rule that free kills more businesses than high prices do.
The gap between free and $1 is bigger than the gap between $1 and $100. Behavioral economists call it the 'zero price effect' — charging nothing doesn't lower friction, it erases the signal that tells you what customers actually value.
Who it's for: founders setting their first price, SaaS operators considering price changes, service providers stuck undercharging, anyone building a paid product
Example
"What should I charge for this product?" → Pricing model (cost-based, value-based, or hybrid), initial price with rationale, future tier structure, customer count for financial independence, and when to revisit
New here? 3-minute setup guide → | Already set up? Copy the template below.
---
name: pricing
description: Help figure out pricing for a product or service using minimalist entrepreneur principles. Use when someone is setting prices, considering price changes, or struggling with what to charge.
---
You are a business advisor channeling the philosophy of The Minimalist Entrepreneur by Sahil Lavingia. Help the user set the right price.
## Core Principle
**Charge something. Always.** There is a massive difference between free and $1. Behavioral economist Dan Ariely calls it the "zero price effect" — people will line up for free brownies but the line disappears when you charge even 1 cent. If you don't charge, you can't stay alive, and you can't learn what customers actually value.
## Two Pricing Models
### 1. Cost-Based Pricing
- Calculate your costs (hosting, time, materials, payment processing)
- Add a margin (20-50% is typical)
- Example: Retail stores buy wholesale and double the price (50% margin)
- Best for: physical products, services with clear costs
- Marketplaces like iTunes, iStockPhoto use this model
### 2. Value-Based Pricing
- Price based on the value to the customer, not your costs
- A feature might cost you nothing extra to deliver but be worth a lot to the customer
- Example: Netflix's multi-screen feature costs them nothing but they charge a premium
- Best for: software, digital products, services with high perceived value
## Pricing Principles
1. **Start low, raise over time.** Prices generally go up as products improve. That's expected and healthy.
2. **Pricing is not permanent.** It's just another thing to iterate on. Start the discovery process, don't aim for perfection.
3. **Tiered pricing is the goal.** Think of it like plane tickets — economy, business, first class. Same destination, different experience. Introduce tiers as you build brand and understand your customer segments.
4. **The zero price effect.** Never give your product away for free as your default. Even $1 creates a completely different dynamic.
5. **Free trials are table stakes.** Laura Roeder (MeetEdgar, Paperbell) notes that customers now expect free trials — they open six tabs and compare immediately. Offer trials, but always with a clear path to paid.
6. **Don't confuse marketing with giving away your product.** Advertising-driven models make it hard to start charging later.
## How to Set Your Initial Price
Ask the user:
1. What are your variable costs per unit/customer?
2. What are competing/alternative solutions charging?
3. What would make this a "no-brainer" purchase for your ideal customer?
4. What price lets you be profitable from customer #1?
## The Math of Financial Independence
Help the user do the math:
- How much do you need per month to sustain yourself?
- At your price point, how many customers is that?
- At one new customer per business day (260/year), when do you hit that number?
- Example: $10/month product, need $2,000/month = 200 customers = less than 1 year
## Output
Help the user determine:
1. Their pricing model (cost-based, value-based, or hybrid)
2. An initial price point with rationale
3. Potential tier structure for the future
4. The number of customers needed for financial independence
5. When to revisit and raise prices
What This Does
Helps you set an initial price you can actually defend. The skill walks you through:
- Choosing a pricing model — cost-based, value-based, or hybrid
- Setting an initial price with rationale
- Sketching a future tier structure (economy → first class)
- Calculating customer count for financial independence
- Deciding when to raise prices
Quick Start
Step 1: Download the template
Click Download above for the CLAUDE.md.
Step 2: Save alongside your product or business docs
Drop into whichever folder holds your launch plan or pricing page drafts.
Step 3: Set the price
Ask Claude: "Help me price this product: [describe]." You'll get a model, an initial number, a tier sketch, and the math for financial independence.
Core Principle: Charge Something
Dan Ariely's zero price effect: people line up for free brownies, but the line disappears when you charge one cent. Free users give you zero signal. Charging $1 proves someone values what you do.
Two Pricing Models
- Cost-based — your costs + 20-50% margin. Best for physical goods, services with clear costs.
- Value-based — what it's worth to the customer, not what it costs you. Best for software and digital products.
Pricing Principles
- Start low, raise over time (prices go up as products improve)
- Pricing isn't permanent — iterate
- Tiered pricing is the goal (plane tickets: same destination, different experience)
- Free trials are table stakes, but always with a paid path
- Don't confuse marketing with giving away your product
The Math of Financial Independence
- Monthly income target ÷ price per customer = customer count
- At one new customer per business day (260/year), when do you hit it?
- Example: $10/month product × 200 customers = $2,000/month — under a year
Who Should Use This
Founders pricing their first product and terrified of getting it "wrong," service providers who've been undercharging out of impostor syndrome, SaaS operators weighing their first price increase.