#148 - Startup School Week 7 Recap - Kevin Hale on Conversion Rates and Pricing

We've cut down the seventh week of lectures to be even shorter and combined them into one podcast. Kevin Hale gave both lectures this week. Kevin’s a partner at YC and cofounded Wufoo. His first lecture is on how to improve conversion rates and his second lecture is on pricing for startups . Y Combinator invests a small amount of money ($150k) in a large number of startups (recently 200), twice a year. Learn more about YC and apply for funding here: https://www.ycombinator.com/apply/ *** Topics 00:00 - Intro 00:27 - Kevin Hale - How to Improve Conversion Rates 1:02 - Why we care about conversion rates 2:02 - Shareware conversion rate is .5% 2:22 - Casual download games is 2% 2:32 - Freemium SaaS range from 1.5 to 5% 3:57 - Knowledge spectrum 5:52 - The one button interface 6:37 - What is the call to action? And the magic moment. 8:02 - What is it? 8:38 - Is it right for me? 9:02 - Is it legit? 9:22 - Who else is using it? 9:52 - How much? What's the catch? 10:39 - Where can I get help? 11:30 - Kevin Hale - Startup Pricing 101 13:15 - Monetization gives you the biggest bang for your buck 14:35 - Price thermometer 16:35 - Mistake 1 - Prices are too low 16:55 - Mistake 2 - Underestimate costs 17:08 - Mistake 3 - Don't understand your value 17:27 - Mistake 4 - Focus on wrong customers 18:05 - Sales and profit over a product's life 19:20 - Why is pricing innovation hard? 21:27 - How to optimize prices 22:32 - $1B formula 24:05 - Price and complexity 26:55 - 10 - 5 - 20 rule 28:20 - Summary