Triple-Price Test
Challenge insecure pricing by testing three times the obvious starting price
- Difficulty
- Easy
- Time to result
- ~days to results
- Steps
- 5
- Confidence
- 96%
Kaufman's Triple-Price Test is a rule of thumb for beginning entrepreneurs whose initial prices are distorted by insecurity and fear of rejection. Start with the price that feels obviously right, triple it, and test the resulting offer with real buyers. The purpose is not to assume the higher number is correct; it is to move the test closer to a commercially sustainable range and replace imagined rejection with evidence. The discussion shows several possible mechanisms behind stronger results: customers may read price as a quality or status signal, additional margin can fund better marketing and delivery, and lower financial stress can redirect operator attention toward revenue-producing work. The final price should follow observed demand and economics, not the founder's initial comfort level.
Origin
Kaufman developed the rule of thumb through years of consulting and advising beginning entrepreneurs.
Core principles
- 01Founders often set prices low to avoid rejection
- 02The emotionally obvious price is usually biased downward
- 03A higher price should be tested rather than rejected in advance
- 04Price can support reinvestment and signal quality or status
How to run it
- 1
Expose the comfort price
Record the price that instinctively feels like the obvious place to begin.
Pro tip Notice whether the number is designed to make rejection feel unlikely.
Watch out Emotional comfort is not market evidence.
- 2
Triple it
Create a test price equal to three times the initial figure.
Pro tip Treat the number as a hypothesis, not a permanent commitment.
- 3
Make the offer
Present the higher price to real prospective buyers and let them respond.
Pro tip Test with the actual offer rather than asking abstractly what people might pay.
Watch out Do not reject the price on the customer's behalf.
- 4
Measure the effects
Track demand, revenue, customer perceptions, and the business's ability to improve delivery.
Pro tip Look beyond unit volume to total economics and quality.
- 5
Adjust from data
Keep, refine, or reject the price according to observed results.
In the wild
Chris Williamson describes fearing that a 50-pence rise would damage his packed club night. Demand instead increased, while the extra money supported reinvestment in the product and marketing and reduced time spent worrying over the accounts.
→ A feared increase coincided with stronger demand and more resources for improvement.
Williamson describes co-hosts producing personalized diet and training plans for about £35 despite each plan requiring hours of work. He argued that the plans were worth £100 or £200 and encouraged them to confront the fear of charging more.
→ The example exposes the gap between a fear-based price and the labor and value involved.
Common mistakes
Pricing to avoid every objection
A price designed to feel objectionable to nobody is often driven by insecurity rather than sound economics.
Predicting rejection without a test
Assuming nobody will buy prevents the entrepreneur from collecting the data needed to set a viable price.
Is it for you?
Best for
It is best for beginning entrepreneurs pricing services or offers without strong historical data.
Not ideal for
It is not a guarantee that every market will accept three times the current price.
From the transcript
“the rule of thumb for beginning entrepreneurs is take the price that feels like the gut obvious this is where I should start, triple it…”
“we think that the best way to get people to like what we're offering and take us up on the deal is to make sure…”
“demand goes up when price goes up.”
From the episode
The Key Principles Of Running Any Business - Josh Kaufman - #215
Josh Kaufman