Why You Should Charge 5x More, Not 50% More

0:00The only way to serve the poor masses, right? And I say this to be a little bit more like, you know, jarring. But to to to to serve people with lower budgets is to have tons of money and then find a way to serve them in an automated manner at a low price. And if you do that, you can also make a lot of money, but via volume. But it takes a lot of money, it takes a lot of time. And the reason that Tesla has almost gone bankrupt multiple times is cuz it's incredibly hard. The reason most software companies like Netflix and Spotify and some of these big consumer, you know, companies, you know, who who charge $13 to give you Think about how hard that is. Think about how hard that business is. You they have to make world-class entertainment for all the different genres that someone might like just to earn their $13, right? Just to earn the equivalent of like a Chipotle bowl.

0:50And I again, I bring this up because some people come in saying, "Oh, I'm going to do that." It's like, "You're going to do that bootstrapped?" No, these companies that you're looking to model literally got artificially inflated with outside capital to prop the business up until it would get to the point where it actually could make money. So, to do something like this cost a fortune. And so, the the way that I'm trying to walk you through this is that 80% of businesses in the US or 78 are service-based businesses. And so, you don't have an automated way to serve these masses. You likely don't. And so, if you don't have an automated way, then you want to go in the complete other direction, which is I want to serve the best customer at the highest possible price. But people misprice their products and services. They say, "Okay, I'm my you know, my current core thing is $1,000. I'll make the next thing 1,500." It doesn't work that way. That's not how the buyer works. The buyer is at 5K, 10K from the 1K thing. That's the next tier. That's the next rung on the ladder, all right? And so, this hopefully should shift your perspective in terms of how pricing really works. A disproportionate amount of profit is here. We have to make gigantic jumps with the assumption that very small percentages are going to take it, but still will okay with it because even a small number of people at a gigantic price is still a lot of money.

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