Why Executive Side Projects Almost Always Underprice
The most common revenue mistake in executive side projects is not a bad product or a weak market—it is underpricing. Executives who negotiate million-dollar deals in their day jobs inexplicably price their side project SaaS at $19 per month because they are afraid of scaring off early adopters. This fear is unfounded and expensive.
Underpricing creates three compounding problems. First, it attracts the wrong customers—price-sensitive buyers who churn at higher rates and demand more support. Second, it anchors your revenue at a level that makes growth painfully slow. Doubling from $10K MRR to $20K MRR requires 100 new customers at $100 per month, but only 25 new customers at $400 per month. Third, it signals low value to sophisticated B2B buyers who associate price with quality and capability.
The antidote is value-based pricing: setting your price based on the economic value your product creates for the customer, not on your development costs or competitor pricing. If your side project saves a customer 10 hours per week of manual work, and that employee costs $75 per hour, your product creates $3,000 per month in value. Charging $300 per month—10% of the value created—is not only fair, it is a bargain that sells itself.
The Value-Based Pricing Framework for Side Projects
Value-based pricing requires understanding three things about your customer: the problem's cost, the available alternatives, and the switching cost. The problem's cost is the total economic impact of the pain your product solves—measured in wasted time, lost revenue, compliance penalties, or operational inefficiency. The available alternatives include manual processes, competing products, and custom-built solutions. The switching cost is the effort required to adopt your product.
Your price should sit between the cost of the best alternative and the total value your product creates. If your customer currently pays a consultant $2,000 per month to generate reports that your tool automates, and your tool also adds real-time dashboards and alerts, your price should be $500-1,000 per month. You are saving the customer $1,000-1,500 per month while delivering superior results—a value proposition that practically closes itself.
For executive founders, the easiest way to validate pricing is through direct conversation with potential buyers. In your validation calls, ask: "What does this problem cost your organization today?" and "What would you budget to solve it permanently?" The answers will almost always surprise you—the value is higher than you assumed, which means your price can be higher too.
Pricing Tactics That Accelerate Early Revenue
Annual pricing discounts are the single most effective tactic for accelerating early revenue. Offering a 20% discount for annual prepayment converts monthly subscribers into committed customers and gives you cash upfront to reinvest in the product. A side project with 20 customers paying $3,600 annually instead of $300 monthly collects $72K upfront—enough to fund the next phase of development.
Founder pricing creates urgency and goodwill. Offer your first 25 customers a locked-in rate that is 30-40% below your standard price, explicitly labeled as a founder's discount that will never be available again. These early customers become advocates who feel invested in your success, and the urgency drives faster purchase decisions. Make it clear that the discount is permanent for them but that future customers will pay the standard rate.
Usage-based pricing components can supplement your base subscription and align revenue with customer value. If your tool processes transactions, generates reports, or manages records, charge a per-unit fee above a threshold included in the base plan. This ensures that your most successful customers—who derive the most value—pay proportionally more, and it gives smaller customers a low entry point.
When and How to Raise Prices
Price increases are inevitable and healthy, but they require careful execution. The best time to raise prices is when you add significant new features, enter a new market segment, or when your conversion rate exceeds 40%—a signal that you are priced too low. Most successful SaaS products raise prices 1-2 times per year in their first three years.
The standard approach is to grandfather existing customers at their current rate while applying new pricing to all new customers. This eliminates churn risk from the price change while increasing average revenue on every new deal. Communicate the change transparently: explain what new value justifies the increase, give 60 days notice, and make the grandfathered status feel like a reward for being an early supporter.
If you are uncertain about pricing, start higher than you think is right. It is psychologically and operationally much easier to offer discounts or lower a price than to raise one. Executive founders who partner with Sizzle Ventures benefit from pricing strategy guidance based on data from dozens of side project launches—eliminating the guesswork that costs most founders their first year of optimal revenue.
Ready to Build Your Side Project?
Executives across every industry are turning side project ideas into real products—without pulling a single engineer off their core team. The key is working with a partner who understands both the technical execution and the strategic context of building alongside a day job.
Sizzle Ventures helps executives go from idea to launched product in as little as 90 days. Our MVP Sprint is built specifically for leaders who need speed without sacrificing quality—and without touching their internal dev team.
Ready to explore what's possible? Start a conversation with Sizzle about bringing your side project to life.