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by gnicholas 1658 days ago
Don't let customers lock you into multi-year pricing deals that aren't inflation-adjusted. It might seem strange to ask that future payments be inflation-adjusted, but that's just because we (anyone under 40 or 50 years old) does not remember high inflation from their adult life. But this is exactly what people do when there is inflation risk, currency exchange risk, etc.

A payment you receive next year could worth be 5 to 10 percent less, and a payment two years from now will be worth even less. It's like the power of compound interest, but as a sword, not a shield.

Conversely, try to lock in pricing with suppliers if you can!

1 comments

At the rates startups should be growing, customer pricing lockins are rounding error. You want to have many times more customers moving forward. If this year’s customers are getting a 10-% discount a few years from now, either that’s a < 1-2% revenue hit for your startup, or you’re going out of business anyway.