During audits, I often ask founders

What's the goal?

Like, why are you digging into pricing and monetization, diving back into custdev, segmentation, values, and all that?

Usually I hear about "growing", "scaling", "making more money".

Sounds good, of course..

But then I always clarify - what does that mean?

Growing in sales volume? market share? generating more revenue? or profit?

These are different metrics of "growth" and "scale"

(and the strategies to achieve them will also differ)

I haven't compiled exact statistics. But, perhaps, 8 out of 10 talk about market share.

There's some magical attraction to this story. Like, I'll capture 40-50% of the market - and money will automatically appear in my pocket.

I don't have an exact answer to where all this came from.

Sometimes I was told about economies of scale (the more we sell, the lower the cost per unit and the higher the margin). Someone mentioned brand and top-of-mind.

Once I was even given an example of the PIMS study, which proved that the market leader's business margin is almost 3 times higher than the fifth-largest competitor's.

In short - we grow market share, and profit will follow.

I usually don't argue
(the founder always knows best)

But as an alternative point of view, which, in my opinion, should be considered when choosing your growth metric, I would outline this..

Your profit and market share are much less connected than commonly thought

There is a whole series of recent studies that prove that market share has a negligibly small impact on how much money you have left after all expenses.

A much more important role is played by "unobservable variables".

For example, your team's competencies, corporate culture, product value, pricing strategy.


For instance, economists at the University of Cologne in 2024 analyzed 6,000 cases from 800 companies over 25 years.

The result? Digitalization significantly reduced the correlation between market share and profit.

Endless growth is increasingly not the best path.

What comes to the forefront is not market share in absolute terms, but how you achieve it.

If you grow through low prices (or high acquisition costs), essentially buying market share at the expense of margin. And you hope that someday you'll achieve comparable profit..

Then there is a very high risk that your business will die before you feel the rustle of bills in your pocket.

But if you pay a lot of attention to quality growth (based on value-based products and balanced monetization models)

Then there's a high chance of achieving positive unit economics from the start.

And what's your goal?

#pricing