Mastering Startup Pricing Strategy: Unveiling the Steps, Types, and Real-World Examples

3 min readFeb 29, 2024

Does your product or service cost $5.00, $49.99, or $505? Putting an optimal price tag on a product or service is potentially the million-dollar question for every company out there. Learn such startup pricing strategy essentials as how to form a strategy and browse examples of how renowned companies approach the matter.

Properly pricing a product or service is one of the key milestones a startup has to achieve. And you’re right, it’s not just checking how much competitors charge and making your price tag slightly lower (however, it’s still one of the options).

What types of pricing strategies are out there and can work out in 2024?

Top 9 Pricing Strategies for Startups

🟡 Penetration Pricing
Start off with low prices to grab a bigger slice of the market and bring in customers fast. Then, as you build a loyal following, you can increase the price. This strategy works well for things like software as a service (SaaS), mobile apps, online stores, subscription services, and even electronics makers.

🟡 Competitive Pricing
Take a peek at what your competitors are charging and try to keep your prices in the same ballpark, especially when there’s a lot of competition. This can work well for things like online stores, web hosting, online marketplaces, consulting firms, and even software development companies.

🟡 Value-Based Pricing
Set prices based on what you think your product or service is actually worth to the customer, focusing on the benefits and experience you are offering. This is a good tactic for custom software companies, specialized software solutions (like those built for specific industries), and innovative tech products that are truly unique.

🟡 High-Low Pricing
You can start with higher prices and then offer discounts through sales or promotions. This strategy works well for businesses like consumer electronics retailers, online fashion stores, tech gadget stores, and gaming software companies.

🟡 Dynamic Pricing
You may adjust your prices as you go based on what’s happening around you. This includes things like customer demand, what your competitors are doing, and how much of your product you have in stock. This could work for products like Uber or in e-commerce.

🟡 Skimming Pricing
Start with a premium price, snag the tech enthusiasts first, then drop the cost to grab everyone else. This strategy works well for companies with brand-new tech, fancy tech add-ons, or groundbreaking apps and services.

🟡 Freemium Pricing
Give away the basic version for free, then charge for the fancy stuff. This is a great fit for companies with software that can grow with you, apps with cool add-ons, online tools that help teams work together, and even gaming companies with extra content available for purchase.

🟡 Psychological Pricing
Play some pricing tricks! List your prices just a penny shy of round numbers or offer a more expensive option next to your normal one. This makes your thing look like a total steal. This works great for companies with subscription plans like “Basic”, “Pro”, and “Ultimate”, and even mobile apps with things you can buy inside them.

🟡 Geographic Pricing
Charge different prices depending on where people are. Consider stuff like how much they usually spend in that area, how much it costs to get things there, and any local taxes. This is a good fit for companies that offer online services like cloud storage, online stores that ship internationally, and IT support firms that cater to specific regions.

With so many pricing options, how do you even pick? Choosing the right strategy can feel tricky, but it’s all about knowing your product: what it costs you to build it, which value it brings users, who you’re selling to, and how you’re selling it.

If you need a detailed step-by-step guide to crafting your own perfect pricing strategy, we’ve got one full of tips right here 👇




Digital product studio. We help early-stage startups (<$100K) and scaleups ($1M+) grow faster by creating products that drive results.