Hello {{First Name | founders}}!
Welcome to ‘Tactical Tips’ by Jerel and Shuo at DECODE, where we cover one new idea to help you build and grow your startup – every week in <5 minutes!
Today, we’ll be answering the question: “How to monetize effectively?”
And here’s advice inspired by Casey Winters, founder and CEO at SuperMe, and former Chief Product Officer at Eventbrite.
If you're trying to figure out how to monetize your product without killing user growth, today’s newsletter is for you.
🔥 Inside this issue:
✅ 3 tactics to monetize effectively
✅ 2 traps to avoid
✅ 1 tool to leverage
👇Let’s dive in.
Need personalized advice on building your startup or just want to talk? Grab 20 mins with me here—happy to help and make intros if it’s the right fit or feature you in future newsletters.
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3 tactics to monetize effectively
🤝 Tie monetization directly to feature value
If it drives virality → Give it away
If it drives activation to long term retention → Give it away until activated, then charge
If it drives lifetime value → Charge if willingness to pay is higher than lifetime value gains
If it doesn’t drive virality, activation, or lifetime value, but people are willing to pay → charge for it
If the value of the feature does not cover the cost to support → don’t build it or sunset it
🔥 Bundle features into simple, value-driven packages
High usage + High willingness to pay → Higher tier
High usage + Low willingness to pay → Core tier
Low usage + High willingness to pay → Add-on
Low usage + Low willingness to pay → Don’t build
Bundling sacrifices some individual feature willingness to pay but prevent overwhelming customers
⏰ Design monetization with long term growth in mind
Monitor churn closely after pricing changes; rising churn can offset revenue gains.
Track second-order effects on acquisition—especially when users drive growth and distribution
Measure revenue-per-customer improvements against volume changes; avoid sacrificing scale for short-term gains
2 traps to avoid
🚨Avoid shipping new features across all pricing plans
Adding features to every plan dilutes premium value and crushes upgrade incentives
It squeezes margins with more maintenance but same revenue—and blurs value between plans
Don’t fall for “keeping up with competitors”—innovate where it counts instead
Focus on building differentiated features that justify higher-tier prices and drive upgrades
🚨Avoid misaligning revenue model to value created
Charging in ways that discourage usage (Eg. charging per tracked event) limits engagement, hurts retention and kills product value
Tie pricing model to usage that scales with value—make it easier for customers to get more value over time instead.
1 tool to leverage
📖 Best practice on monetization strategy
Monetization = how, when, and what to charge—not just price
Evaluate holistically using these 4 metrics: revenue creation, payback period, revenue retention, and 1-year average revenue per paying user—don’t rely solely on lifetime value
Leverage tools like Orb to implement flexible and dynamic pricing
Bonus: 1 trend to spark startup ideas
🔨 Digital commerce is accelerating with huge growth potential
E-commerce represents only ~20% of total commerce, with digital spend growing 8.4% in 2024 (vs 4.9% in 2023) and outpacing inflation
Consumer spend remains strong despite inflation—Shopify’s GMV has grown 5x in 5 years and nearing $300B (over a third of Amazon's)
Spend is shifting from the physical world to the digital
New categories emerging: sneaker bots, IP proxies, community memberships and virtual stores (Eg. IKEA in Roblox)
Startup Knowledge Check
Hint: Read our past newsletter on how to maximize investor interest.
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