3 Insights from My Conversation with Rafi Levi
from Miles Lasater's newsletter
We recently published the Startups for Good interview with Rafi Levi of DOTS. I wanted to share three insights that we discussed during the show. For the full interview, you can listen online or in your favorite podcast player.
Insight One: How to Attract Early Adopters
Every startup desperately needs customers willing to be first. But how do you identify them?
Founder and CEO Rafi Levi shared his insights with me on the Startups for Good podcast.
The best early adopter customers are optimistic and trusting.
They believe that the future can be better and the believe that you are doing your best to deliver.
How do you attract these optimistic and trusting customers?
Be optimistic and trusting yourself.
How do you become more optimistic and trusting?
Make your Plan B. Then put it in the metaphorical drawer and focus on Plan A.
With clarity about the downside, you can focus on the upside. That will help you attract and sign up those critical first customers.
Insight Two:Price for Value But Don’t be Greedy
First-time founders can charge too little for their product. Here are 4 ways to avoid making the same mistake.
One, if you are thinking of a price in your head, double it before saying it out loud. Then observe the reaction.
Two, ask people what would be a good price, a reasonable but high price and an outrageous price. Go with the middle one.
Three, price for 25% of the value you are creating for customers. For example, if you are saving them $100,000 per year, price at $25,000. As you approach 50% customers' sense of fairness causes them to push back. Plus competitors may undercut you. Under 20%, you are leaving too much on the table.
Four, as Rafi mentions on this week’s podcast episode, also keep in mind your costs and make sure that your channel partners can make enough money. It is not as simple as cost plus pricing. But you do want to make sure that you are unit profitable.
Insight Three: Picking from Multiple Positive Externalities
A social benefit startup may have many positive externalities.
For example Rafi’s company, DOTS is all of:
AgTech
ClimateTech
path to cheaper food for all
improving farm economics to reduce the burden on government budgets.
Or you could tink of it as a high-tech sensor business with recurring revenue.
Which way of talking about the company is best?
You can choose which benefit to emphasize depending on the situation. As long as you are truthful,
Not legal advice but probably best to use one set of investor materials at a time. You can spend more time on different parts of the story depending on the interest of the investor.
We discuss this more in the episode and you can listen to the full episode online or in your favorite podcast player.