When looking at those early rejection emails published by Airbnb co-founder and CEO Brian Chesky, it seems even harder to believe that some investors considered the potential market opportunity “not large enough” or that it was an area that they could not “get excited about”, while others simply did not even reply. But, it is clear from its growth and current status as a multi-billion dollar company that such rejection did not stop them from developing their idea. They had confidence in their startup, knew what market they wanted to target, and felt there was a problem there that could be solved.

In general, all startup founders are simply builders trying to solve a problem. They are usually trying to build something brand new and against the odds. As a result, these founders constantly end up hearing “no” or “it can’t be done” from those around them. Facing such rejection is difficult, so we find that most founders avoid these “No’s” and purposefully seek out those who will give them a “Yes”. But, rather than try to avoid the problem altogether, founders need to get used to the idea of rejection. Not only are they going to continue to hear the word “No”, but they are also going to find that they can learn from those “No’s” for the sake of their companies.

Understand Your Biases

Actively trying to avoid “No’s” is not surprising behavior, and we certainly see this often. It is driven by biases that most founders have. In fact, there are three common biases in particular that stand out when we talk with founders: (1) the Dunning-Kruger effect; (2) Confirmation bias; and (3) the Halo effect (particularly of customers or stakeholders who agree with the founder). 

Not seeking expertise and insights 

First, the Dunning-Kruger effect can be defined as a cognitive bias where people might overestimate their own knowledge and expertise in a particular field in spite of their limited competence relative to others around them. It is imperative that founders look at a variety of areas from marketing to pricing to product development when developing their company, so it is natural that there are some areas that they lack expertise in. In such instances, it is best for founders to acknowledge this and instead seek help from those with the necessary knowledge to make the optimal decisions for the company’s future growth. Of course, acknowledging that one needs help can be difficult for anybody, leading to many instances like the Dunning-Kruger effect where founders can overestimate themselves and struggle to solve their own problems. 

Seeking feedback that agree with their views

Another common bias among founders is confirmation bias, which is their tendency to search for and interpret information in a way that confirms their prior beliefs. This can happen when founders look for validation by seeking “evidence” from those who are willing to accept and praise them, causing them to stubbornly stick to their own ideas rather than explore new ones. 

Creating perception errors in decision making  

Finally, the halo effect is the tendency for positive impressions of a customer or stakeholder to positively influence one’s opinion or feelings in other areas. No matter how great a customer or stakeholder may seem, founders should not blindly trust and agree with whatever they have to say because it can lead them astray. All of these biases are part of a founder’s natural defense mechanism and response system to be able to cope with future rejection. What is most important is that every startup founder can acknowledge that these biases exist so that they can avoid them or at least prevent them from influencing their decisions.

Actively Seek Your “No’s” To Work For You

But, there is also a lot that startup founders can learn if they actively seek these “No’s”, especially for companies in their early stages of growth. For some Product teams, they call this “dog fooding” to discover everything that is wrong with their product. Looking for these “No’s” can help companies understand where value exists and where it doesn’t, ultimately helping them improve their product. Yet, when it comes to the value proposition, pricing, and offer, we don’t do it as much despite how much it can help to do so. Similar to product development, if founders seek out these “No’s” with regards to pricing, they can discover what their customers’ value assessment is and shape their pricing strategy accordingly. 

To seek out these “No’s”, there are three different approaches you can take. First, it is always important to understand who your customer is and what they value. Sometimes, founders discover that there is no market need for their product. This can partly be due to the product itself but also because the product failed the “worth it” test: is the product right for this customer at this price and offer? Using this test to seek out “No’s” is important so that you can re-evaluate who your customer is, whether you have set the right pricing strategy for that customer, and whether you are selling the value of the product. At the end of the day, your customers must believe that your product is worth the price. This focus on value is important so that you can design your pricing based on what your customers are willing to pay and what exactly they value most. If your initial pricing strategy faces rejection from your target market, then it is clear that improvements can be made and a better understanding of your value drivers is needed. 

You can also experiment with who your product is for and use customer ring segmentation to discover the various groups of consumers that will actually respond to your product. While you may have a specific group of customers in mind, it is important that you do your research with market testing and collect results that support your hypotheses. Otherwise, if you find yourself facing rejection from a group of customers, you can recalibrate and focus on the target group who would respond well to your product. Discovering exactly who your target audience is and ensuring that they are aligned to your value will create loyal customers in the long run. 

Finally, you should focus on experience and whether your customers actually understand the value of your product. If your research through testing, surveys, and analysis shows you that they do not understand your product or how it acts as a solution to their problem, then you are not communicating its value properly. As a result, it is inevitable that you would face rejection since they do not see the product the same way you do. 

Final Thoughts

In conclusion, it is natural for any startup to face rejection one way or another. Rather than ignore it or avoid it, founders can learn a lot from acknowledging them and spending more time trying to understand the root cause of such rejection. If customers and/or stakeholders are saying “No”, then it is your job to figure out what they are saying “No” to and why. Simply doing that can help you improve your product, develop an optimal pricing strategy, and set your company up for sustained long-term success.

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However, first and foremost, we would like to thank our clients, partners, staff, and our families for their continuous trust and support.  

We are looking forward to all the new exciting initiatives we will be working on this coming year, but before we launch into 2023 we would like to take a moment to look back on HelloAdvisr’s year.

This last year had a lot to be excited about – our clients, and our company and team – but there are also big challenges ahead for high-growth companies and investors. A key question the market will tackle in the new year is how does innovative companies and investment align with an effective strategy for sustainable growth?

If you want early access to our upcoming announcements, research, and resources in 2023, sign up to our newsletter to receive our latest articles and insights.

Have a wonderful winter holiday and wishing you an exciting and successful 2023!

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So, the first question you might ask when hearing that is simply: Why?

Though our previous website provided a gateway for you to get a brief overview of who we are and what we do, we felt like it only encompassed a small part of our whole potential. While our previous website summarized the importance of pricing and how we can help, we wanted to show how much more we can bring to the table. Furthermore, we wanted to better show our philosophy and approach and make our website an accessible resource for companies at all stages of growth. 

This meant considering what new and exciting things we could add to our website, not only to help those who are new to HelloAdvisr but also our amazing clients and partners. We wanted to add more resources for visitors to understand the importance of creating value through pricing at an even greater level and see for themselves exactly how we can help and have helped others prior. For many of those unfamiliar with pricing in general, we considered including more introductory resources to invoke greater engagement and willingness to try and learn more. 

In terms of the design, we wanted our website to be both simple and sophisticated: facilitating easier navigation for visitors to find the right information and resources and methods to connect with us when you need.

So, naturally, the next question to address is: what exactly is new here?

Share more about how we support growth

With our website redesign we wanted to showcase our core philosophy and capabilities. From our approach of designing pricing like a product to the range of topics and areas we work on, we wanted to be even clearer how we support companies to achieve their growth goals. 

Our new website also includes  testimonials from clients and partners (but wish we could add all of them!) to share  the impact and experience companies and organizations have had with HelloAdvisr. We also wanted to highlight the amazing companies we have worked with and the many different ways we have helped. We believe that these testimonials provide support of the significance of pricing on a company’s long-term success. 

More resources and network

We have created a new resources section that brings together different content, materials and tools to help you on your pricing journey. One new highlight in resources is our newly produced a series of online courses. For those who prefer to learn through audio and visuals, we have created concise video courses to cover a diverse range of pricing-related topics, everything from how to define your customer to how to determine what kind of data is useful for you. We want to help companies build  from a foundational level how exactly pricing can impact your company. From everything like sales, marketing, and product development, we hope that our videos show just how influential pricing can be and especially how it can provide your company with that extra boost to launch off and find sustained success and growth. 

Another new section with Resources is a page dedicated to providing worksheets and related tools. We want to create a home for different materials we have shared with companies and organizations to organize, assess and implement a value-driven pricing approach.  

Finally, we are launching an expert network, with more details to come on that later in a future post, so stay tuned!

What’s next?

We hope that you take a moment to visit our website and see how much more we have to offer companies in terms of pricing and growth knowledge! The world of pricing is vast and particularly daunting for some, so we would love to provide a pathway to it through our website’s extensive library of information and resources.

If you feel someone you know would benefit from the site, please share! 

Of course, we would love to hear your thoughts on the new website and features, so please feel free to fill out our feedback form here to list your questions, comments, and/or concerns!

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In their latest episode 6, they invited HelloAdvisr Founder and Managing Director Ed Lee to the podcast to discuss pricing and how founders can start to tackle pricing today.  

Watch the entire episode here.

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If you or your team is interested in having a hosted session on your pricing strategy and monetization model, please contact us: contact@helloadvisr.com

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