Sample frameDay 315·Growth · Compound

Morning. Your price has two halves, and almost every business only ever argues about one of them.

Growth.

The Value Metric

5 min read·Apply by lunch

The question

Pull up your largest customer and your smallest: are they paying different amounts because one of them takes more value out of you, or because one of them simply negotiated harder? If it's the second, every extra dollar from that account has to be sold again from scratch, one meeting at a time, forever.

The idea

Day 46 settled what to price — the outcome, in the buyer's numbers. This is the half nobody argues about: what you price by. Madhavan Ramanujam and Georg Tacke, both of the pricing consultancy Simon-Kucher & Partners, published Monetizing Innovation in 2016 under a subtitle that reads like a provocation: how smart companies design the product around the price. Buried inside it is a decision most teams make once, early, without noticing they've made it. Per seat. Per gigabyte. Per transaction, per contact, per kilometre driven, or a flat annual fee. Whatever you land on ties your revenue to a single variable inside someone else's business, and from that morning on you own that variable's growth rate. Charge per seat and you've bet on their headcount — flat in a good year, falling in a bad one. Charge a flat fee and you've bet on nothing at all: the account can triple what it takes from you and the invoice doesn't move. The trap is treating this as a billing detail, something finance settles in a spreadsheet years before anyone asks why every dollar of growth now has to come from a stranger. It isn't a billing detail. It's the ceiling on every customer you already have, set on a day nobody remembers.

The framework

01
Would your best customer notice if they doubled their usage?
This is the fastest diagnostic available and it takes a minute. Take your happiest account, imagine they draw twice the value from you over the next twelve months — twice the volume, twice the team on it, twice the outcome — and work out what happens to their invoice. If nothing happens, you've built a business where every dollar of growth must be won from a stranger. The people who already love you are structurally incapable of paying you more. Flat-fee and unlimited-plan businesses tend to discover this in the year acquisition gets expensive. That is the worst possible year to find out.
02
The unit is a bet on one variable inside someone else's business.
Whatever you charge by tracks a single variable in the customer's world, and you inherit that variable's growth rate whether you like it or not. Headcount is a slow, defensive number that most companies are actively trying to hold down. Transactions processed, messages sent, kilometres driven — those rise when the customer is winning, and they carry you up alongside them. Write down the variable your current unit tracks. Then go and find out what it actually did inside your ten largest accounts last year. That number, not your sales effort, is the ceiling on what those accounts can grow to be worth.
03
Two bars the unit has to clear, and only two.
Forget elegance. A unit fails in two ways. The first is measurement: if you can't count it from your own systems without an argument, every renewal becomes a debate about the meter rather than about the product. The second is behaviour. A unit that taxes the thing you want more of gets quietly gamed — charge per user and teams start sharing logins, then negotiate hard on the seats they did admit to. Slack's fair billing policy credits back seats that go unused. That is what a unit designed not to punish good use looks like, and it costs less than the churn it prevents.
04
Changing it later is a repricing, not a tweak.
The unit usually gets set early, by whoever built the first invoice, and it hardens fast — into contracts, into forecasts, into what your customers have told their own finance teams to expect. That doesn't make it permanent. It makes it expensive. Most corrections therefore arrive as a new tier or a new product line rather than as a letter to the existing base. If your unit is wrong, price the migration before you announce anything: who moves, who's grandfathered, what the transition costs you in churn, and across how many renewal cycles you're willing to spread it.

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