I’m part of a team building a product – there are less than 10 of us. The CEO of the company is the CEO of the product, not me.

A tough spot? Sorry, but hardly the case. I didn’t think what I wrote indicated that I was having difficulty with these decisions – sorry if it came off that way.

We’re making profit on the first deal we ever did – and will continue to do so on all others we do. We’re not copping out and taking a loss leader like so many start-ups do today. If we find we are losing deals based on price, we will tweak it and try again with the next prospect.

Iterate, research, tweak, go again. Nothing is right the first or second or third time out – you have to keep making it better, which is what we’re doing.

Remember, PMs need to be strategic. But they can’t keep their head up in the clouds too long / too often – or it will end in them forgetting to actually get something done instead of just thinking about it.

It’s not an easy job, but then again if it was then anyone could do it…!

I just wrote a blog entry about this convergence here. In the past, I have written about negative pricing, which I believe is the key to pricing a product based on value.

I’ve got a post coming up that will be published on January 30th that might help you out a bit here – it’s on how to price a new product that nobody has seen before. This sounds a little like the spot that you find yourself in.

Sneak Peek: The trick turns out to be that you have to TELL your customer what they need to compare your product to. Make sure that it’s something expensive and not something cheap so that your pricing will hold up.

Give it a read on the 30th and let me know if it helps out…

Also, allow me to clarify the scenario in which I’ve done this – a B2C product moving in to a B2B space by white-labeling the technology. Hell, we don’t even know yet who are customers will end-up being on either side other than in broad strokes…

I know, I know – I should probably be banned from Product Management for admitting it. But all witch hunts aside, do you run with an idea and see how things pan out, fail, refine, rinse, later, repeat – or just give up because you can’t define market segments?

Same goes with value props, vision statements, and all that stuff. It’s all necessary and important – but it all takes time to develop; especially at the very outside of the idea existing itself. You can jump on this stuff soon or let it develop – in either case, it will need to change rapidly as you go.

But we can’t forget how difficult it is to enter a new market where there are very few competitors to baseline (that you know about anyway), and your value prop is rough or isn’t yet written down.

Of course, provided you aren’t negatively impacting your product with silly and random features – I can tell you with 100% certainty I don’t want to be the PM that goes in front of the board of directors and says, “you know, we didn’t do that $50k deal because I just didn’t feel like we knew the value were were delivering to the client and therefore had no confidence in our price. Cost-plus pricing is wrong.”

I want to be the PM that tells the Board and the VCs, “we did the deal and we are continuing to evaluate our pricing strategy as we develop the product, identify the value prop and our market opportunities, and analyze competitors in the space. We are looking at X, Y, and Z. But yes, we have $50 in the bank with very limited development work to be done, and it will actually pay for us to fix 10 critical bugs.”

Again, you take a risk, probably fail, dust yourself off, rinse, later, and repeat. If folks in the organization (from the CEO down) aren’t willing to do that for every aspect at the outset (product, features, pricing strategies, overall strategies) then you are more than likely doomed from the get-go.

But maybe I’m just really, really crazy