Ben: Do we not like the fan noise in the background?
Carlos: Is that your laptop still just about to take off?
Ben: It's been desperate, been trying to take off for years.
Uh, but it can't seem to get off the stand.
Carlos: So we are going to be talking about, uh, through the lens
of Elon Musk's eyes, the scary, scary eyes of Elon Musk, we're
gonna talk a bit about pricing.
And we are gonna be, uh, sort of commenting on a blog post by a
guy called Mark Ritson who I don't really know, but I, his, his blog
post was shared by another guy called Tim, who is based in Bryan.
And, um, it was curious, he was like, basically the title
of the blog post is Five.
What is the title of that?
Five Lessons on Five Lessons On How Not To Do Pricing From Elon Musk's Twitter.
Ben: Mm-Hmm.
Carlos: So essentially.
For those of you who have been living in a cave for the past month,
there's a guy called, or maybe the past year or decade, there's a guy
called Elon Musk, who I've been watching a documentary on the BBC
iPlayer called the Elon Musk Show.
Fascinating story, fascinating story about his experience,
not only in building Tesla and SpaceX, uh, but also just.
Um, well, they don't really talk about PayPal much.
That's the interesting thing.
Ben: Couldn't fit it in.
Too short a program.
Carlos: I don't think many people know that he was actually part of PayPal.
Ben: Yeah.
Carlos: Which is fascinating.
But they talk about the company before PayPal.
Ben: Yeah.
Carlos: And they talk about him getting pushed outta PayPal.
Ben: Yeah.
Carlos: But also they talk about his childhood.
Ben: Yeah.
Carlos: And his parents.
And that is super fascinating.
Anyway, they come up to the idea of buying Twitter, uh, and the.
Basically hims, his the power, he has a being having several hundred, I think
he's the second most swallowed person on Twitter, over a hundred million
followers in influencing markets.
Ben: And he's an influencer.
Carlos: He is a massive, big influencer.
Ben: Yeah.
Carlos: Now he's trying to influence the business model of Twitter and
trying to, as I understand it, get it into profitability, which means.
Dealing with pricing.
And so, um, on this blog post, uh, there were these five things not to do
Ben: Mm-Hmm.
Carlos: With pricing.
And I'm gonna, and, and broadly, and then to my view on it was there's
like kind of three aspects to it.
There's something around clarity, something around confidence, and
something about communication.
So, yeah, there, there's something about how clear are the prices that
we present, um, how confident are we when we present them, and how
do we communicate them in a way that that makes sense, you know,
the, you clearly understand it?
So the five lessons.
Firstly, ignore research, go straight to tactics.
That's one lesson not to do.
Number two, thing not to do.
Ignore strategy and go straight to tactics.
Number three, create uncertainty around the price change.
Wobble a bit.
Number four, don't worry about framing.
Just set a price.
Number five, value is all about the company, not the customer.
Okay.
So those are the five things
Ben: Not to do.
Carlos: To give you not to do.
Not to do.
So I thought we'd just like skip through each one and
just give our own commentary.
I'll kind of share a little bit.
I maybe intro a bit with what Mark was talking about on his blog post.
And then maybe you can.
Chime in with any thoughts, uh, uh, and your own perspective.
Ben: Mm-Hmm.
Carlos: So, the first thing, and maybe from the perspective of happy
pricing, Number one, ignore research.
Go straight to tactics.
So, um, what he was saying was basically pricing from the gut.
Just like, ah, this is a price.
And just not even thinking about, uh, asking or talking to anyone.
So that's his thing is like, that's what he perceived Elon Musk doing
with some of his pricing particularly.
And so we're now, just to be clear, uh, for those of you who aren't
familiar with Twitter, and I'm not particularly familiar with Twitter,
there is a blue tick, which is actually a white circle with a white, a blue
circle with a white tick, apparently.
Uh, that is a verified user status.
So that's to let you know that this person is really who they are, and they,
they were wanting to charge $20 for it.
Again said out of the blue, and there's other aspects that,
the things they wanna charge.
So anyway, first thing, giving a price without any research.
Ben: So, yeah, so the context, you said he buys the company
for a huge amount of money.
It clearly doesn't make any money, lots of people, whatever, kind of
contentious for range of things.
He is then looking at ways of making money.
Says you should charge for the blue tick, the verified thing says, oh, $20.
But then in conversation, when he gets some kind of pushback
on Twitter, basically saying, you know, you can sling it.
I'm not gonna do that.
He says, okay, what about eight?
Um, so the, I think like the five points, one of the, one of the things
more than I had sort of like specific thoughts about the individual points,
it kind of felt to me, and in the same way your, your alliteration
sort of spoke to it, it felt to me that the, the kind of the general.
Idea that the article was talking about, which is right, is that essentially
he, Elon Musk did what everybody shouldn't do, which is he basically
didn't really think about it, didn't think it through, didn't look at it via
the lens of the person who was buying.
Didn't, you know, sort of No, no, no plan, no strategy, no
thinking, no consideration, no care.
Just wades in and from the gut kind of vomits a figure into the air,
which of course, given that he is the most kind of followed person
onto Twitter or whatever it is.
And also kind of, you know, the man of the moment, everybody kind
of looks at, vomits a figure into the air, which is kind of quickly
sort of swatted back at him.
I mean, even in a sense, I don't even know how roundly
it was, swatted back him.
A few people, clearly people he paid attention to swatted it back
at him and he just responded.
So it just kind of talks to all of this kind of acting from the gut.
Not thinking about it.
And you know, the problem of acting from the gut, like we sort of talk
about on all the others is that's just loaded with our own sort of
kind of emotional kind of flavor and judgment about it and then kind of
reacting to what comes back at you.
But this whole sort of thing, you know, not thinking, you know, not,
not thinking about it outside in, which is like one of the ways we
talk about it on, on the course that you are kind of pricing a little bit
outside in, you are starting more from the, from the lens, from the
perspective of the person who is buying.
It's not just about you vomiting a figure into the air, because almost
certainly the figure that you are vomiting into the air when you are
pricing your own thing is one which is kind of clouded by your own
stories, your own anxieties, your own worries, your own judgments,
good or bad about what it is that you might, you might be doing.
So the kind of the danger of doing what he did or kind of going inside out is
there is no reason to what you're doing.
There is no, you know, it is, it's not a, a qualified thing.
There is no ne, you know, you have no idea whether the value of what you are
talking about is kind of right or wrong.
Now, for sure, someone like him, I would guess the $20 thing came about
because you know, he has undoubtedly given that he just bought a company
for $44 billion, an army of people who were really good with spreadsheets.
I mean, that's what you would hope and expect if you're doing that.
And so the army of people who are really good with spreadsheets, no
doubt, look at the organization, you know, from all the stuff they could
see and think, well actually, if we could get 20% of the people who have
a blue tick to pay $20 a month, all of a sudden we'd make all of this money.
To which he then probably just regurgitates that into the world
going, okay, well there you go.
So $20.
But yeah, it just talks the idea of acting impulsively, acting from the
gut, acting inside out, and not thinking about or caring about what the person on
the other side of the table is thinking, doing or wanting, and that that
essentially is setting yourself up for a kind of period of uncertainty and or
anxiety and maybe a suboptimal outcome.
Carlos: So there's another aspect, another point or another lesson around,
um, uh, that Mark shared was value is all about the company, not the customer.
Ben: Mm.
Carlos: And I'm linking that to what you were saying.
'cause there's a, sometimes I, I feel, and we've been guilty of it, about this
having a defensive stance about prices.
So it's like, oh, I'm charging this much 'cause we need to make some money.
You know, it costs us this much and this much and this much and this
much to actually make a profit.
So, you know, you should pay us because we need to put food on the table.
Now on one hand, yeah, that's fair enough.
On the other hand, it's like, well, why should I care?
Like you are a business.
Am I am I, am I a charity?
Am I giving you money?
Just.
That can help.
And I've seen it like with models like Patreon and people who just want
to support artists to do their work, fine, but there's still some kind
of value that people are getting.
Not guilt.
I'm not trying to get someone to pay you money by through guilt.
I feel personally, I find that a bit challenging.
Uh, but even just from a purely pricing strategy approach.
It's like, well, what is it about the, this customer that,
what's the good feeling here?
'Cause guild doesn't feel like a very good feeling.
Ben: Mm.
Carlos: So that's, that's what I was picking up on there.
So when I'm thinking about pricing from the inside out, it's like
if this is this unfiltered, oh, I feel really, really scared.
I really feel really, really desperate and I feel really, really, um,
needy, can you please pay this price?
That's when I think you are, well, you, you are gonna come up with
either a, some resistance, uh, at best and ambivalence at worst,
maybe someone just, essentially blatantly saying, that's not worth it.
Ben: Mm-Hmm.
Carlos: Because you're not talking to me about what I'm getting out of it at all.
Um, and, and that's not based on any kind of, uh.
At least some kind of understanding or knowledge of who you're selling to.
Ben: Mm-Hmm mm-Hmm.
Carlos: It's all coming from me.
I need, I need, I need, I need this much money feed.
I need you to pay this much money and I need it to survive.
Ben: Mm-Hmm.
Carlos: Please pay.
Ben: I think it's a further, it's like, it's not, it's partly, you
know, they're not coming at it from a position of knowledge or
understanding about what me, the kind of customer or client might wanna do.
But also it sort of talks to a lack of kind of care.
Actually, I'm not, I don't really care about, um, kind of what's
happening on the, on the other side of the other side of the table.
Uh, and that kind of blindness of it really.
Uh, because yeah, you know, there are two parties in all of these, in
all of these transactions and better understanding what the, the kind of
buying party wants and needs and values and sort of judges and all of those
things will mean you are doing better work and you are also better understand
what something is worth to them.
Carlos: Well, I think the, the word for me the, the really
important word there is care.
Ben: Mm-Hmm.
Carlos: Is like, particularly for the work and the kinds of people that
we are talking to and surrounding ourselves with and wanting to work
with, are people who care about the people, not just the money.
And so, in terms of an outside in approach, it's like, I
wanna understand these people.
I wanna know what they're trying to do.
I wanna know what they're struggling with.
I wanna know what that means to them so that I can actually help them and I can
work out what we're doing with the Happy Pricing course, how much money they're
willing to pay for us to help them.
And then with the inside out approach, I think what boundaries
can I create for myself so that I'm not just pandering to anyone?
Ben: Mm-Hmm.
Carlos: I have some clear understanding and you talk about the course.
What more money, um, could buy me?
You know, what are the kind of the minimum, what's the
minimum amount of money?
I'm willing to, uh, sell my services for?
Or what am I willing to give away consciously, not because of I need
them, need the client, but because I feel like investing in that person.
Ben: Mm-Hmm.
Carlos: Investing my time.
There's something, and this is where point lesson two about
strategy, I think is interesting.
You know, having a strategic understanding of pricing as opposed to
just, again, throwing out some prices.
Because I think about, when I think about strategic aspect of pricing, the
thing that's springing to mind is like, I might have a product or service that
I charge 49, 60, 90 $9 in, uh, before, in the past, but actually I'm reducing
the price, not because the value is less, because it's a stepping stone
to something else that I've created.
And so this idea of like thinking about price, not in isolation of the product,
but in terms of, in this case, when I think about strategy, what's the
bigger journey, or the longer journey that my customers potentially go on?
And so I'm pricing not only based on the value to them, but also how
I think they'll feel more amenable to try this thing than this thing,
than this thing 'cause it tells a story not only in terms of their
own growth and development, but also how much they're willing to
invest at different points of their.
Education or transformation.
Ben: Mm-Hmm.
So the thing that was actually coming to my head as you were talking there
was not directly what you were talking about, but don't say that personally.
The thought that was actually coming up was if Elon Musk was
on the Happy Pricing course
Carlos: Yeah.
Ben: Working out while two at Twitter, what would we have gone through, right?
Carlos: Ooh.
Ben: So obviously he would've begun the endeavor, the exercise, thinking
about his attention, thinking about what he wanted to get out of it, thinking
about all of those sorts of things.
So it had some kind of clarity about the kind of direction he was traveling
and the work that he wanted to do.
Then the next thing that he would do, uh, on the course with his happy
cohort of other people having made the relatively small investment compared to
the 44 billion that he spent on Twitter, um, he basically would've done some
more work thinking about what it is that the people were actually buying.
So in his mind he's thinking this blue tick is worth something to people.
So there is a universe of people who have that blue tick that
presumably it is worth something.
And actually, so one of the things we do is actually better
understand, well, what is it that those people are actually buying?
What is it?
What is the change that those people are wanting, are enjoying by kind of
wanting the blue tick and being willing to spend money on the blue tick.
And so there will be a whole range of things which are important to people
who have the blue tick, uh, about why they would want it, why it's important
for them, which might be about status, which might be about how other people
perceive them, might be about their own kind of credibility or their own
respect or their own understanding or their own kind of sort of professional,
um, sort of integrity or positioning.
Might be important for the work that they do.
It might be important for their ability to.
Grow and connect and, and grow more, more followers.
There'll be a whole range of reasons that are actually important to people
for why they want the blue tick.
And all of those things do varying degrees and reasons,
of course have a value.
They have a value to, you know, why is it important for
Carlos to have a blue tick?
Because his followers think about him in a certain way, more likely to
attract other followers as followers.
People will pay attention more to things that he says or he doesn't say.
So there is value in that to you.
And so the, the, the task for Elon while he's on the course and with
the tools that he gets, probably by joining the Momentum bit afterwards,
'cause he is not gonna nail all of this just in the one go, he is gonna
have to work at this for a little bit of time, is he kind better
understands all of these motivations and clarifications and all of this things.
And then he basically starts to experiment in a conversational
sense with a pool of key people.
'Cause of course he's not gonna do it with all the people who
have a blue tick or all the people who might want a blue, blue tick.
He's going to sort of experiment, be in conversation with a relatively
small group of those people, you know, using questions, using conversations to
understand what is it that the Carlos is of the world who have a blue tick?
Why do they want it?
Why is it important for them?
What do they gain from doing that?
And through being in conversation, he will start to better understand
what the value of the blue tick is to different people at different times.
And as he better understands what the value of the blue tick is to different
people at different times, he's able to go into the fourth part of the
Happy Pricing, uh, course and start to understand with what options might be.
Because I think that's the other thing, which is kind
of alluded to in the article.
It spoke a little bit about framing there.
There's no kind of frame.
We're just.
Vomiting a figure into the world.
There does need to be some choice.
You know, the Carloses of the world who have a blue tick, don't want
to feel like a price is just being forced on their head, which is a
yes no thing, I'm in or I'm out and this is the, you know, either,
either I do this or I don't do this.
There should be some opportunity for Carloses to engage at a different
level, or there should be an opportunity for Carlos to understand
the value of a blue tick at this price versus one at this price, might
point to kind of different benefits or different ways of, of engaging.
So that sort of suite of things, if.
Elon would like to join us on the course he's of course very welcome to do that.
But I think it's about that.
It's about process.
It's about, and again, what it's talking about in the article, there
is about, it is about strategy.
It is about thinking things through.
It is about research.
It is about framing.
It is about having care for the Carloses of the world, and better understanding
what it is for them about why.
And the, you know, why, why would I even want a blue tick?
What's it gonna do for me?
And I think if you don't get into that space, you are never gonna be able
to think about a price that speaks to, you know, speaks to you or speaks
to somebody who might be willing or able to pay for the blue tick.
Because undoubtedly there are many people who would pay for it if it
was spoken to them in the right way.
Uh, for the right reason with the right care.
Carlos: Yeah.
And I think it's interesting that whole, you know, giving that example
of, would I pay for a blue tick?
At the moment, no, because, uh, a I don't have a massive
enough brand to defend.
So my assumption now, so if we're gonna say like, someone who wants to pay a
blue for a blue tick is potentially someone who's gonna have lots of other
accounts who are trying to piggyback on their brand and their status.
And so they want to be heard as the authoritative person for
themselves, as opposed to be having their followers distracted or
people distracted by other people.
I.
So depending on how important my brand is and how important it is
for other aspects of my business, whether I'm a speaker, whether I'm
a writer, whether I'm a politician, then that starts to tell me a story
of like, ah, yes, actually $20 is cheap compared to losing a 10 grand
speaking gig, or suddenly being defamed because I said something contentious
online that people mistook me for.
So even in that case, if I was someone, uh, on the maybe hundreds
of thousands, and this is off the top of my head, if I Barack Obama and I
had a hundred million followers, to be honest, I don't need a blue tick.
Ben: Mm-Hmm.
Carlos: Because everyone knows this is the place.
But if I'm on that cusp where it's hard to differentiate, is that
the real person or not, then there might be some value paying even
$99 if it's core to my business.
And this is the interesting thing here is like who is the core customer?
Or of the blue, the, the Twitter's blue tick.
Because then that, for me, from what you're saying, starts to dictate
Okay, the where the price should be.
And I think what's going through my head is like, how much money does Twitter
need to make in order to, to whatever?
Because if I'm gonna flip it on its head now let's talk about
Elon buying Twitter itself.
Ben: Mm-Hmm.
Carlos: Why would Elon pay $44 billion for Twitter?
Ben: Mm-Hmm.
Carlos: Now, as I understand it from a quick Google research, they
make $5 billion in revenue a year.
Now I do, correct me if I'm wrong, you are the investor person.
Uh, our rule of thumb, I've heard for tech stocks is like a 10 x.
I'm not sure if it's on profit or of revenue as a valuation rule of thumb.
Ben: There's not a quick answer to this point for the reason actually.
Why A lot of this is kind of interesting because yeah, like an investor would
say, oh, you know, there is a, there should be a multiple of profits.
It should be, but of course that doesn't happen at all.
Like Facebook bought WhatsApp for $19 billion when it was generating
like not, not 100th of that.
Why?
Because the value of it to the buyer is worth that for the
reasons, which it is for that.
So all those things around multiples, and the rest of it is just the story
that we tell ourselves to justify why we've done something, whether
it's Elon Musk buying Twitter, or you know, somebody buying
your service, whatever it may be.
Carlos: And so this for me illustrates, well, I was trying to illustrate the
values in the eye of the beholder.
Ben: Mm.
Carlos: Without asking Elon, why is it worth $44 billion?
Because it might not be for anyone else worth, not even if you did the,
you know, the calculations and the revenue, you know how much you're
gonna return on investment over 10 years, it probably won't even
touch a, like you said, a hundredth of the investment that he's made.
But there's a bigger play.
You know, what is Elon actually buying?
Is the question.
And then maybe when you understand the answer of that, then you say, oh yeah,
I can see why it's worth $44 billion.
As opposed to, why are you paying $44 billion for that thing?
Ben: Yeah.
To him in that moment is why it worth.
Carlos: To him.
Exactly.
And so the invitation is to then transpose that situation
to your customer when they're buying something off of you.
Ben: Mm-Hmm.
Carlos: Are they just buying the thing or are they buying something more?
Ben: Yeah.
Carlos: Something that's in their mind.
Some, like you say, a good feeling or a solution that's in their
heads, not necessarily yours.
Ben: Mm-Hmm.
Yeah.
I mean entirely in their heads and never in yours.
I think, I think where you got to there is a nice, that actually
the value is in the eye of the beholder, is in the eye of the buyer.
And so all this sort of stuff is actually that, that's the place
we need to be is what is the story your customer, your client is
telling themselves, and how is it that the thing that you have sort
of supports them in that change, supports them in that journey,
supports them in that transformation?
'Cause that's the thing that.
Somebody is buying.
And so what we can do, all we can do is try and take the time
to kind of understand what those stories might be so that we can
start to understand how our thing, how our product, how our service
plugs into helping them achieve it.
Carlos: And I like the, you know, use of the word stories
and thinking about stories.
This is something that we're doing at the moment with Vision 2020.
We're, we're kind of focusing a bit more on stories.
And there's the stories that your customer's telling themselves and
then there's how we relay that or reflect that story so that
they feel a sense of empathy.
'Cause I think the other aspect of this is there's value in trust.
I'm more likely to pay someone who I trust who actually
seems to see in my head.
And that way, again, it doesn't have to be more stuff in order to charge more.
There's something else around relationships, understanding,
empathy, and caring.
thank you very much for your words and your time and your ears.
And until next time, uh, keep on pricing happy.