What do you think of my idea? Will it make money?

A client came to me this week with a business idea. Based on her experience, she has a unique vantage point in the market — now she sees an opportunity for a very specialized service offering.

Her question:

What do you think of my idea? Will it make money?

The short answer?

I have no idea.

(Actually, that’s not true. I do have an idea, several, in fact — reasonably well-informed ideas.)

But here’s the point.

BE EXTREMELY CAREFUL ABOUT WHO YOU ASK FOR PRICING ADVICE.

What if I said it is a great idea? Should she quit her day job right away?

What if I said it is a terrible idea? Should she give up on it entirely?

That’s insane.

Why? Because I may be wrong. But even more importantly, I AM NOT HER CUSTOMER. I cannot place a value on what she is offering because I have no need for it.

The only opinion that matters is that of your actual client. Will they buy what you are offering?

Early in my career I worked for a supply chain software company. The company brought in an expert from the automotive industry to advise us on marketing our software to the automotive manufacturers.

He had some very useful insight and knowledge. When we asked him about pricing, at first he gave a very strong answer. But when we asked more nuanced questions, he rambled and hedged, while still trying to maintain his posture as an expert. It was not pretty.

If the only opinion that matters is that of your customer, how do you get the right price?

Here’s what you need to do:

1. Trust yourself. You see this opportunity for a reason — your unique experience and vantage point. I can’t see it because I’m not you.

2. Craft a preliminary prototype offer to your target client.

3. Determine your target pricing based on a strategic considerations of business model and positioning.

4. Go offer your service to your target clients in a real sales setting. Not asking them for advice, but asking them about their real problems and then determining if they will buy your prototyped solution.

5. ASK FOR THE BUSINESS. Unless you present a real offer, ask for the money, and get a legitimate yes or no, you are still in the vague world of mushy opinion. Try taking that to a bank.

6. When they buy it, build it and deliver it.

7. If they don’t buy it, adapt. Return to step 1.

Pricing does not exist in a vacuum — it must be validated in context of the product, the positioning, and the promotion/presentation.

So if you ask me for advice on pricing, I will not give you specific pricing advice.

What I will give you are three things:

1. A strategic framework to determine your pricing.

2. A process to validate your pricing with your target ideal client.

3. A skillset to present your offer and pricing in the most confident, effective way.