Different customers are willing to pay different prices for the same product. Companies that set only one price are leaving money on the table from those customers who were willing to pay more, while simultaneously loosing out on customers who would have bought if only the price was lower.

The solution isn’t either/or, it’s both.

Use Differential Pricing to Charge Each Customer Segment What they Are Willing to Pay

The least price sensitive customers can be offered higher levels of service, early access, or other conveniences in exchange for paying premium prices. More price-sensitive customers can be courted with periodic discounts, or by offering lower prices to those willing to jump through hurdles such as rebates, coupons, or price-match guarantees.

Each new pricing option you offer opens the door to a new group of customers.
– The Startup Daily

Pricing is traditionally determined by starting with the costs, and adding a profit margin to arrive at the final price.

However, this ignores the realities of the customer’s situation. This cost-driven approach can result in prices that are wildly more, or less, than what the customer is willing to pay.

Pricing Should Start with What the Customer is Willing to Pay

Set prices according to customer realities and then design a cost structure that will allow you to make profit at the target price. Price-driven costing ensures the customer’s needs come first.
– The Startup Daily

The more ideas you can generate, the greater your chances of finding the best solution to your problem.

A Quota Forces You to Actively Generate Ideas Instead of Waiting for Them to Occur

Setting a high quota forces everyone to get the safer ideas out early on, clearing the air for less obvious ideas.

The human mind can stretch to fill even the most ambitious quotas.

Once you have committed to a quota, stick with it, and don’t end the brainstorming session until it is met. You don’t have to stop when the quota is met if the ideas are still flowing. A quota does not prevent you from generating more ideas, but it does ensure you reach the minimum.
– The Startup Daily

If, after thoroughly immersing yourself in a problem, you find yourself stuck and unable to make progress, then it may be time to forget about it.

This is not to say you should forget about it and relax. Relaxation slows down your momentum and your mental processing.

The Secret is Not to Stop Working, but to Switch Gears and Work on Something Else

Continue working, but on a different problem. This keeps your mind active and working at full capacity. While your conscious mind is occupied with the new project, your unconscious mind will continue working on the original problem. This is when a solution often appears, seemingly out of nowhere.
– The Startup Daily

The Six Thinking Hats method, also known as parallel thinking, is an approach to idea generation and decision making that allows a group to fully explore all sides of a problem.

It is based on the premise that the mind has distinct modes of thinking, and that when you are engaged in one mode, you become desensitized and dismissive of stimuli that is better matched to one of the other modes. Mismatched stimuli lead to confusion and missed opportunities, and is often the result of team members reverting to the mode of thinking they are most comfortable with.

Parallel Thinking Minimizes Confusion and Removes Ego from the Brainstorming Process

Unlike traditional group discussions, where each member takes opposing and often argumentative positions, parallel thinking allows the group to look at each side of a problem together. The result is a more complete and balanced view of the situation, where the best solutions often become obvious to everyone without the bruised egos.

The colored hats are a metaphor. They serve as a helpful reminder of the current mode of thinking that the group is exploring together.

White Hat Objective, stick to the facts
Red Hat Emotional, intuitive
Black Hat Cautious, the devil’s advocate
Yellow Hat Optimistic, look at the bright side
Green Hat Creativity, growth, and new ideas
Blue Hat Organizing, thinking about thinking
– The Startup Daily

The more ideas you can generate, the greater your chances of finding the best solution to your problem.

A Quota Forces You to Actively Generate Ideas Instead of Waiting for Them to Occur

Setting a high quota forces everyone to get the safer ideas out early on, clearing the air for less obvious ideas.

The human mind can stretch to fill even the most ambitious quotas.

Once you have committed to a quota, stick with it, and don’t end the brainstorming session until it is met. You don’t have to stop when the quota is met if the ideas are still flowing. A quota does not prevent you from generating more ideas, but it does ensure you reach the minimum.
– The Startup Daily

Share

If you gather a group of people who all work in the same environment and share similar backgrounds, and you ask them to brainstorm a solution to a problem, you are likely to get a collection of very similar ideas.

The Diversity of Ideas is Directly Related to the Diversity of the Team

To get the widest range of perspectives on a problem, build a brainstorming team that includes people from a wide variety of cultural, educational, and professional backgrounds. Those who have little industry experience or knowledge of “the way it’s always been done” can be particularly valuable.

Next time you have a brainstorming session, go ahead and invite some outsiders.
– The Startup Daily

Effective brainstorming involves two distinct modes of thinking. Combining them too early limits the quality and quantity of the ideas you will generate.

Productive Brainstorming Requires that you Separate Creative Thinking from Critical Thinking

The goal of creative thinking is to generate as many ideas as possible, while deferring judgement. These ideas should not be thought of as packaged solutions, but instead as partially formed fragments and possibilities. These fragments are then used as jumping off points for further expansion.

Only later at the critical thinking stage should you analyze, question, and narrow down your list of ideas.

The real magic of brainstorming usually happens in the expansive space between idea generation and selection, and cannot occur if ideas are judged and dismissed the moment they are conceived.
– The Startup Daily

Don’t wait for somebody else to tell you what products to develop and what problems to solve. To find a challenge worthy of your time, look no further than the points of friction in your own life.

Study Everyday Situations with an Eye Towards Improving Them

Become a nitpicker. Identify all the little things that are inconvenient or broken in the world around you. Then, instead of just accepting them, pick one and commit to doing something about it.

Life’s little problems are an entrepreneur’s opportunities.
– The Startup Daily

Incremental innovation is made by finding better ways to serve existing markets. But to create truly disruptive innovation, there are massive growth opportunities hidden in plain site.

The Biggest Impact Is Not Made by Grabbing Bigger Slices of the Pie, It’s Made by Uncovering Entirely New Pies

Your competiors are fighting over an established market of a known size. Yet there is likely a much larger group of people who have similar needs, but find the existing offerings too complicated, expensive, or difficult to access.

This strategy enabled Nintendo to come from third place in the video game market to outselling their competitors for five years with the Wii. Instead of going after the existing market for video game consoles—the hardcore gamers—they went after everyone else with a system that was priced lower and easier to learn. Nintendo opened up a whole new market of casual gamers, which they had entirely to themselves for over five years before Microsoft and Sony finally caught up.

If you want to play it safe, then stay focused on improving how you serve the existing market and hope that it doesn’t shift. But if you want to turn industry upside, be the first to find a way to serve those who are currently being left out in the cold. The risk may be bigger, but so is the reward.
– The Startup Daily