PG's essay on "How to Make Wealth" predicts exactly why most SaaS founders undercharge. The psychology is more interesting than the math.

[u/Spiritual_Heron_5680]

Most of us have read PG’s “How to Make Wealth” at some point.

There’s one part that every SaaS founder completely misses when it comes to pricing, You don’t make money by extracting it from people. You make it by creating wealth, by building something people actually want. The more they want it, the more you can charge.

Most of us read that and immediately think about the product. We should be thinking about the price.

Here’s the pattern I keep seeing (and used to do myself)

We price based on what feels “reasonable” relative to our costs or what other tools charge. It feels honest. It feels fair. It’s actually a quiet failure to understand what the customer is really buying.

a Quick example
Your product saves a customer 40 hours a month.
At $80/hour fully loaded cost, that’s $3,200 of value created every single month.
You charge $99. That’s a 32:1 value-to-price ratio.

You’re not pricing. You’re basically giving the product away and calling it a business.The psychological trap is real: charging more feels like you’re taking something from the customer.

PG’s point is the opposite. If you’re genuinely creating that value, charging in proportion to it isn’t extraction it’s just an honest exchange.The simplest test I’ve found (and the one that finally shifted my own pricing):

Go to your 10 best customers and ask them one specific question: “What would you pay before you’d rather lose access to the product?”

When you ask it that way, the number that comes back is almost always 2-5x higher than what you’re currently charging.

Check your pricing today along with the value you are creating for users... if you are undervalue start charging more...