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Saved February 14, 2026
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This article outlines strategies for pricing and selling products when creating a new market category. It emphasizes that understanding sales models and market readiness is crucial, as many technical founders mistakenly focus too much on distribution rather than perceived value. The piece provides practical insights from Martin Casado based on his experiences at Nicira.
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Creating a new market category presents unique challenges, especially for technical founders. Martin Casado emphasizes that simply developing a product doesn’t guarantee its value will be recognized by potential customers. When he founded Nicira, the technology lacked a defined category, making it difficult to sell. Founders often mistakenly believe that if their product is innovative, customers will readily understand its worth. The reality is that without effective go-to-market strategies, even the best products can go unnoticed.
Casado points out that most go-to-market literature focuses on established markets, which can mislead those attempting to create new categories. In these situations, understanding how to educate the customer about the problem you’re solving is essential. Founders need to recognize that if customers don’t even know they have a problem, selling becomes much harder. Good sales models and clear communication are critical.
Pricing is one of the most important decisions a founder can make. Casado warns that setting prices too low early on can severely limit future market potential. Instead of prioritizing distribution, focus on establishing the product's value. Founders often assume low pricing will lead to traction, but this strategy can backfire. The right price must align with the sales model; for instance, in enterprise scenarios, direct sales require high prices to cover costs associated with sales reps. Understanding the economics of direct sales — such as the number of deals a rep can close and the typical compensation structure — helps in determining a viable pricing strategy.
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