Episode Transcript
[00:00:01] Speaker A: Yo, mic check. What's up, everybody? You're listening to the street pricing podcast, the only show where proven SaaS leaders share their mindset and mistakes in pricing so we can all stop guessing and start growing. Enjoy. Subscribe, and tell a friend. Now let's break it down with your host and sought after Slayer of bad pricing, Marcos Rivera.
[00:00:25] Speaker B: Hey, welcome, everybody, to the first episode of the Street Pricing podcast with Marcus Rivera. And we got the man, the myth himself, sitting in the room looking very comfortable, very cool, very laid back in his casita down in San Diego somewhere there. How are you, sir?
[00:00:42] Speaker C: I'm doing fantastic, Paul. What is up?
[00:00:45] Speaker B: That is the question everybody's going to ask when they hear this show. We're doing a hip hop look at street pricing, at software as a service pricing. It's a very sophisticated, I don't think from meeting you, very well understood process that companies, whether it's big ones like Netflix or Microsoft Office or all these other people, that no longer send you something, you subscribe to it and they give you a monthly subscription, and you get this or that, and there's the kind of good, better, best program. All of this world out there, I thought, was dialed in. And from meeting you and helping record the audio version of your new book, street Pricing, which is coming out. When's the book going to? The book's out, but the audiobook is going to drop pretty soon.
[00:01:31] Speaker C: Yeah, the audiobook is dropping on September 29.
[00:01:34] Speaker B: Okay.
[00:01:35] Speaker C: We're almost there.
[00:01:35] Speaker B: So this may air after that. We're recording this right prior to it, and we're going to start rolling these out in October here. So I listened to you tell this story, and I'm amazed, and I wanted the opportunity to capture this story for the audience so they have a sense of who you are, where you came from, and what the heck you're doing, not just with your book and this podcast, but with your whole life's work here on street pricing, on SaaS pricing here. So let's start with the craziest part of the story. Marcos Rivera. How did you get from the streets? I mean, the streets of New York to the summit of the tech world? Take us through that. Where did you come from?
[00:02:14] Speaker C: Man? I would be lying to you if I told you it was all planned out. It wasn't, right. It just happened. So, skinny kin in the Bronx, right? And I'm in the inner city neighborhood, right? You've heard the stories, know, single mom, raising some kids in the Bronx, not a lot of money. We struggled growing up. We were poor what can you say? Right? The thing about it, though, is a lot of times the path is usually you either end up in a gang, you end up in jail, you end up dead. All those key things, right? But I didn't want to follow that path. I was the oldest of three, okay? I am the oldest of three. So that means that I have two younger siblings looking up to me, right? And I have to be the man of the house because dad's not around. So I took that responsibility pretty seriously. And that's where this sort of nature of taking care of others, of helping, sort of, was just part of my upbringing, right? But I'll tell you this, I have always loved tech. I love tech. I love figuring stuff out. That blinking twelve on the VCR, for those who even know what the heck a VCR is. Yeah, I remember I was those little tinkerers, right? I like to dig in and what does this button do? What does that button do? So that was always in there from the get go, right? Then you start infusing some of the hip hop piece, right? That's early in my years. All those.
[00:03:29] Speaker B: That's the beat that runs through the street as you're growing up.
[00:03:33] Speaker C: The whole time. And I was listening to a lot of the djs that are up and coming now in the hip hop started really finding its voice, and so listened to it a lot. It really was an area that I thought it was a fun way to let loose, to listen, to jam, to bob your head, have a good time. So you listen to those messages in those songs. You have this love of just naturally helping people. You really are into tech. So you see where the building blocks are coming in, right?
[00:04:00] Speaker B: Right.
[00:04:00] Speaker C: So fast forward. When I hit up in.
[00:04:02] Speaker B: But you're sampling, as they say, you're sampling different things and you're putting it together, right?
[00:04:07] Speaker C: You got. I'm sampling from these different pieces. Fast forward. I'm getting further in my career. I've always been into business, entrepreneurialism. I been wanting to become a business owner since I was young. I would even sell little things on the side of people just to try to understand the mechanics of money. Like, how does it actually work? Went to college, majored in economics, psychology, management science. All the nerdy stuff, right? Like statistics.
[00:04:32] Speaker B: But you say that so casually. A kid from the streets growing up in a rather challenging environment. Let's put it nicely that way. Here you saw something higher. The problem with so many kids in the street, as you could tell more than I could, because I didn't grow up in the streets. I grew up in nice, safe suburbia where everybody went to college. Few go to college. Few see that chance. How did you see it when others missed it? How did you set your sights when others were just trying to survive the day?
[00:05:04] Speaker C: There's a lot of introspection that happens, right? So for me, I'm a very natural introvert. Funny to say. Funny to say as we get into this, right?
[00:05:13] Speaker B: Yeah.
[00:05:13] Speaker C: Right. But I love people. I love learning. I love connecting. And so there's a lot of misunderstood things around introverts that we can launch a whole nother thing on, right? But what happens is I'm thinking through and I'm observing and watching, and I can see that the only way out of this cycle of poverty and this cycle of struggling is to get educated, get really good at something, and that something needs to add value somewhere, right? And if you can do that, then you create a path for yourself.
[00:05:43] Speaker B: Right?
[00:05:43] Speaker C: That's just putting two and two together, right? Just watching it over and over, people who are successful, people who are not. I'm just kind of looking at the patterns. All right?
[00:05:52] Speaker B: But not everybody sees that pattern. We had somebody on. We do a show at the orange County Hispanic Chamber of commerce, and they bring on these success stories. These people came over from another country with nothing, a dollar in their pocket, escaping something horrible, gang fights and everything here, and they come over with nothing. And some of them in their family and friends, that's as far as they can see. They made it here. That's as far as the vision. That's as far up the hill as they can see. But you and others can see what's over that next hill. How do I get a little higher in this whole thing? And I could share with you stories that I've heard, but amazing tales of people that said, I looked around and said, this isn't enough. I don't want to stay here. How do I get out of here? I'm not sure where to go or how to go. Was there a mentor in your life? Was there anybody that guided you? Because there wasn't a father around to say, follow me?
Was there a teacher that took hold and said, hey, you don't have to be one of these kids.
You can go higher here.
[00:06:52] Speaker C: Funny thing for me, there were really positive people that came in and out of my life, no question about it. But there's a sort of concept of locus of control, right? And when you think about, do things happen to me or do I make things happen? Like, do you fundamentally believe one way or the other right? And just growing up, I always thought I just had this mindset that I make things happen. Whether it's a drawing that I produced, whether it's the ability to sell 25 candy bars to somebody who had no intention to buy them, which I did. Just all these things that I noticed, it happened because I sat down, I prepared, I focused, and I made it happen. And when you start seeing these small wins, small little things, going to the store, buying something, making something, it doesn't matter. But you start accumulating these small wins, Paul, and then you start believing in yourself like, huh? Well, gee, if I really hunker down, I can make something happen. And if you don't pay attention to that, then you might miss it. Or if you believe that things just happen to you and you're either a victim or beneficiary, whatever it is, then it's going to be really hard for you to take those preparatory actions to get something going. And so for me, it's always been around, how do I make sure my brother is safe at school and not getting bullied? To how do I help my mom with the groceries? To how do I sell this to, how do I beat this video game? I didn't care. Whatever it was. I always focused on me preparing and making it happen. It's a mindset.
[00:08:20] Speaker B: So that sort of feels to me like the story of hip hop music. It started off in a world where people said, that's not music. We're not going to give anybody a record contract for that. And it came up from the street, and it was people who took control very early on. These weren't artists that got signed to big labels, and the labels made them famous. They created these renegade startup companies. If there is no path, we're going to create a path. If there is no business model, we're going to create a business model. And you think of all the great hip hop companies that were born and all the superstars that the Jay Z's of the world, and all these people that came up from nothing, I mean, absolutely from nothing, from the street, and took that sound and packaged it to the world, was that a motivator for you at all? Because you were so into the hip hop world? Did you see them doing it and say, maybe there is a path up here?
[00:09:12] Speaker C: It really connected with me, Paul. And so it's funny, we're talking about this at the 50th anniversary of hip hop this year, right? And how it's had such an influence in the growth trajectory of the genre. But when you listen to the music a little bit deeper, what I was listening to, and this is, again, young kid growing up, not really know what my options were. And listening to these artists who also came up from very humble beginnings, who had struggling nothing.
[00:09:41] Speaker B: Yeah. Right.
[00:09:42] Speaker C: And then seeing them now elevate, using their music as a platform, being able to do things they want to do, buy mama a House, buy myself a car, all these things. And I thought, man, so there is a path out, right? There are paths out. And it just really helped motivate me and keep me focused. And in the songs, if you listen closely, they even tell you how they did it and how they came out. And so there were areas of glimmers of hope when I was listening to these songs, as these artists were explaining their story, out of the hood, out of poverty. And it just let me just sit there and observe an example, a fun, catchy example of a success story.
[00:10:21] Speaker B: So let's hit the fast forward button. You go to college. Where did you go to college? Somewhere out here.
[00:10:25] Speaker C: I went to the University of California, San Diego.
[00:10:28] Speaker B: Okay. All right. Which is kind of in your hood now, here, your neighborhood. And you came out here because what, your grandmother was out here, somebody else was out here?
[00:10:36] Speaker C: Yep. So when I was young, my mother passed away, and we really was a big turning point in the life. So what do I do?
[00:10:43] Speaker B: Your single mom passes away.
[00:10:45] Speaker C: Talk about my single mom passes away.
I've mentioned this in the book as well. I open up about it. She was my hero, and I was the sidekick, and I lost my hero. And it was a big moment for me to think, well, what do you do?
Do you just crumble and again, cry, give in, let anything happen?
[00:11:03] Speaker B: Throw your hands up? Right? Yeah.
[00:11:05] Speaker C: Or do you step up and say, no, I'm going to do her proud. I'm going to make sure my brother and sister, who are both younger than me, are taken care of, and I'm going to make my life count. I'm going to make it count. Right. So again, the mindset piece. No one sat there and told me to pick myself up and dust myself off.
[00:11:22] Speaker B: It was nobody to do that. You had to look at yourself. So somehow you came with, your grandmother was out here for some reason.
[00:11:29] Speaker C: Yes.
[00:11:29] Speaker B: Your mother's back in New York, dad.
[00:11:32] Speaker C: Not really in the picture. Right. So grandmother comes out and she picks us up, takes care of us. And my dad, who wasn't in the picture, all of a sudden pops back in. This part is not in the book. He pops back in and he wants to basically just take custody of me and everyone, especially me, so he can get some of the funds, the insurance, and all that kind of fun stuff, right? And my grandma's like, I'm not having that. I'm not having that. They're coming with me. Big court battle. Fast forward. She won and then took us out of the Bronx and into San Diego, which whole nother level.
[00:12:06] Speaker B: What kind of a culture shock is that? Suddenly you're in a canyon of buildings, and suddenly you're in real canyons with open spaces and earthquakes and other sorts of crazy things.
[00:12:16] Speaker C: Here, the trees, Paul, the trees are so open. I'm like, what is this? It's not like all these buildings everywhere, right? It was a very different vibe out here. I had a really strong New York accent when I came over, so people would even kind of make fun of the way I talk.
Say coffee again. Say, you know, I adapt. And that's one of the things that if I think about my personality and an attribute that's helped me a lot along the way is the ability to adapt. And so I adapted. Change even my accent, it still creeps out a little bit here and there, but I changed the accent out. I fit in quickly, and then was able to excel in school. So the schools in New York, a little bit ahead of some of the schools here in the west coast. So when I came in, I placed already pretty high, was ready to blast through all my classes. My grades graduated pretty top, and then decided to go to school, stay here in San Diego.
[00:13:14] Speaker B: All right, so then you come out of school with a business degree or economics. I forgot what you said.
[00:13:18] Speaker C: Yep. The degree is actually called management science. Some people know what that is. It's kind of like economics on steroids. Right? So you got your economics, your business basis, but you also have heavy statistics and management operations and all these key things that require a lot of numbers and really healthy grip of mathematics, which I loved. I love math. If you ask me, write a paper or do a math test, I will do a math test.
[00:13:45] Speaker B: Unbelievable.
[00:13:46] Speaker C: Because you're writing the office is my weak point.
[00:13:48] Speaker B: Math, figuring out stats and stuff. Well, we live in a world more so than when I was a kid. I'm considerably older than you are here. I got a few years ahead of you on this journey. And stats, there weren't a lot of stats. It was all stick your finger in the wind and figure out how things worked. Does the public like it or not? Maybe eventually you did some small group research, and you had people come in and test market stuff and everything. But it was pretty much gut feeling about how you made ads, how you made products, how you marketed stuff, how you made movies. I can think of a million examples where there were all these people that had the golden gut, and that's why they got hired to do it, because they kind of had a sense of what the public wanted, the sense on the street. The hip hop artists were kind of that. They were in tune with the street. They understood what was happening. Nobody could see it but them. And they said, there's a market for this and we're going to make music out of this. To me, it still sounds like strange sounds. I still don't know if I can wrap my head around what hip hop is. It's definitely not my generation, but it's a different beat. So the whole point is somehow you fell in love with stats. And did you seek out a job where you could analyze statistics, where you could do this for a living?
[00:15:02] Speaker C: Fortunately for me, there were no shortage of jobs that really leaned on a strong statistic, mathematical base. Right? So I worked at, I was in a finance department, I was a financial analyst. Very natural move for me early in my career. So I was analyzing numbers and profit and loss statements and calculations. I was doing a lot of it. Got really good in excel. Not anymore. Right now my skills are rusty, but when I was in my day, I was creating all sorts of formulas and feed lookups and things like that, so got really deep into it. But I started noticing something, because when I needed some additional data, I would go to these other groups, and this other group was a product management group. And I'm like, what do you guys do? And they go, oh, well, we're the ones who actually decide what the product is and we create it. And at the bank, it's a financial institution, it's not a technology company. But there were integrations and technology and data going back and forth, right? And here's where I really stepped my foot in, okay?
[00:16:00] Speaker B: Because banks do view what they have as products. Now, my wife used to work in banking. It's not a checking account, it's a product. Now they view themselves as creating products in the last 1020 years, not just whatever, creating accounts.
[00:16:12] Speaker C: That's exactly right. And so I was really intrigued by this product group in the bank. I'm like, what are you building? What is this stuff?
So I applied for a job there. They had an opening and I stepped in and they hired me. And the role was to build a product that was, get this. That was an exchange between our bank and other banks for auto loans.
Okay. Just for a second, right? If you ever had a mortgage and you paid your provider, and then all of a sudden, you got a letter saying, hey, your mortgage got taken over by another company, now pay us, right?
[00:16:47] Speaker B: Very common.
[00:16:48] Speaker C: Think about that. For auto loans, okay? And so what I had to do was create not just the integration and technology interchange back and forth, but I also had to create all the pricing. Here's what I mean by pricing in the bank world. I had to decide what the interest rate was for the loan that we're purchasing in the background.
Super easy example. You go to a dealership, say BMW, you buy a car, your credit is. Maybe you had a few lumps, right? You're one of those doctors who forgets to pay their bills, but you have your income, everything's good, but you don't qualify for BMW's top tier financing rates, right? So what they do is they would, in the background, integrate with me, call my system, and then we have an algorithm, an engine that scores the loan, and it says, yeah, you know what? We'll buy that paper, but we're not going to give it 5%. We're going to charge you 7.5% for that, to accommodate the risk. So we send that back. This all happens in a matter of seconds. You send it back, the dealership says, okay, yes, sir. Let's get you into that new car right away, right? And they go ahead and wrap everything up. The customer is none the wiser, right? And then they package it, they ship it to me, to my bank, and then we purchase it, and we get the seven and a half percent and so on.
[00:18:03] Speaker B: And maybe you spin it off to somebody else. That's what you're saying.
[00:18:06] Speaker C: And then it's the securitizations of assets is what it is. And then we can tranche these and bucket these loans up into groups, and then we can sell those off as well. And so, I was pricing all of that, and I was also doing all the technology behind all of that.
[00:18:21] Speaker B: Now, how did you know how to do either? How did you know how to build tech code and algorithms? And how did you know how to price stuff? How did you price it in the beginning?
[00:18:30] Speaker C: So I had no clue, man. But I had to start somewhere, right? So I got in there, and my account was actually BMW. That's why I used that example. And so I flew out there, I spent a lot of time with them to understand their underwriting process and all those pieces. And then the integrations, it was all XML schematic exchanges, right? You schema, you send it over. And so I didn't have to code the XML, the engineers did it for me, but I had to tell the engineers the data I wanted, right. And so they can code the exchanges.
[00:19:04] Speaker B: For them and a ton of stuff. One of the challenges, I'll stop you for 1 second. We do shows all the time about the new Internet of everything, this flood of information that we're collecting, because we have chips on everything, a parking meter at the thing here, 1000 crazy examples where we're collecting data and then we say, what the hell do you do with it? Which data is important, which isn't important. What do I need for this transaction?
I don't really need to look at this. How did you decide what data to look?
[00:19:34] Speaker C: Really? I had to look in three big places. And the reason why I knew this was because I knew for a fact that BMW was very brand conscious. Like when you go into their building, there's a big, fat, beautiful BMW in the lobby. All the employees at BMW financial got special leases of BMW. So when I drove into the parking lot with my rental Chevy Malibu, I was the only Chevy in a sea of bmws, right? So I knew they were grant conscious, which means that it's important that not only is the process seamless to get approved, and they want to make sure that their customers still felt taken care of. So you didn't want a lot of steps. In the banking world, steps are stipulations like, hey, come up with this document, give me ten years of tax returns, whatever. So they wanted low steps and they wanted fast response because of their brand. How did I know that? Because I sat down with them, I talked to them, I watched them. And so through those observations, I realized, okay, we're going to have to price these. We're going to need a leaner set of information, because BMW does not want to pepper their customers with tons of like 50 questions. So we need less information, which means we're going to have to price that risk into the model. And BMW customers also were higher income, which means they're a little less sensitive to the prices. So I could build the pricing a little bit higher. Do you see what I just did? I just connected that brand and what they're doing to how they treat their customers, to the kind of information.
[00:20:57] Speaker B: And you understood the psychology not just of the brand, but of the customer who comes in and says, hey, I'm a doctor, I'm a successful lawyer. I don't want to go through all this rigmarole I don't want to answer 50 million questions. Maybe it's not perfect, but I'm here and I make a bunch of money, and I want this car, and I don't want a lot of hassle to do this. It's a very hassle free environment. You go to Alexis a BMW, they give you coffee. It's not a Chevy dealership where they're lining you up in the thing and saying, I don't know, I need 47 more pieces of paper here because you're trying to qualify this low cost car or something here.
[00:21:27] Speaker C: They won't do it. BMW customer won't do it. So they'll put 20 grand down, they'll have a pretty crappy score, but the value of the car, which holds pretty darn well, and their down payment gives you a nice set of equity that you can price in. So you see what's going on is you really have to watch for those components, those inputs, to really understand, okay, how am I going to price this on the other end so we can make our margins and keep the process flowing?
[00:21:51] Speaker B: So what I'm hearing is, whether you realize it or not, you're back to the street. You first had to go see the company, you had to touch the brand. Then you had to understand the psychology of the consumer of that brand before you could build in your pricing model. How much? Let's see, can we bump this up to accommodate the risk? Yeah. And it wasn't just numbers about what's the value of the car and all these other things. You really got into the head of the consumer and the head of the brand. The brand has an image to itself. Right. And I don't know that everybody takes the time to do that. Too much it's math and not too much the art. It's too science and not art.
[00:22:30] Speaker C: That's right. And for me, and I say this, you really have to understand that mind. As long as a human is buying something from another human, you got to understand that psychology.
[00:22:41] Speaker B: Right.
[00:22:41] Speaker C: So that's where I come from.
[00:22:42] Speaker B: All right, so this led to many years of doing this, and then you got involved in some other things. We'll just quickly run through it. We only got a couple of minutes left here. But you somehow saw that this was a need, this pricing. What shocked me when we sat and did the audiobook and you spun this tale of what you do and talked about the difficulty of pricing, particularly these SaaS models, these software as a service, because it's a subscription. Will they pay $10? Will they pay $15? Do I do this? Do I do that? And you said, and I want to confirm this is true, that even at the highest levels of SaaS pricing, these major companies, a lot of it is just hit or miss. A lot of it is just guesswork. A lot of it is, let's see what the market will bear.
[00:23:21] Speaker C: That was the big, eye opening moment for me so fast forward in my career, right? I got the taste of building a product, and I really love building, so did a lot of that. Did it at another tech company, did it across all sorts of technology. And then I joined a private equity firm that invests in technology, and they had, like, 60 companies in there, and I got to see all these different products and technology and pricing models, and I would always ask, hey, how'd you come up with that model? How'd you come up with that price? And they would always say the same thing, Marcos. I guessed we copied the competitor and.
[00:23:54] Speaker B: Added 10% at this high level, where they're guessing to see what it is, and they're guessing about something that determines the underlying value of the company. The underlying value of a SaaS company is how much your subscriptions are generating. It may not be the tool and dies that you've invested in. It may not be the intellectual property that you've acquired. It may not be other tangible, physical assets. It may be the accumulation of your entire subscriber base. That is the value of your company.
[00:24:24] Speaker C: That is the value. And I thought for a second, like, hang on a second. 100% of your revenue depends on your pricing, and you guys are freaking guessing. Exactly.
It drove me nuts, and so I had to help stop that.
To me, running a business is hard enough. With all the other things you got to deal with, why are you guessing at one of the most important central nucleus parts of the business?
[00:24:51] Speaker B: Important thing? Yeah.
[00:24:51] Speaker C: And so I see an opportunity to help that, and that's where I did it, across the private equity firm, and immediately saw how profound the results were when you update the pricing. And, by the way, I didn't even have to change the whole thing and make it upside down. Some of these were modest changes just to correct some things, and we saw a very, not just immediate, but profound impact to the revenue, and it just took off like wildfire. Went to company to company to company, seeing the problems, fixing them, seeing them, fixing them. And you see what's going on is my pattern recognition skills are getting even more sharp, they're getting supercharged. And that's where I'm like, whoa, this is something that people need to know. They need to know how to do this. Business leaders need to know.
[00:25:36] Speaker B: And you built now a successful firm which is called what? Pricing I-O-I kind of forward slash o. That's for like input output.
[00:25:45] Speaker C: That seems pricing IO. So input output, think about, it's a nod to the technology sector that we serve, right? But it's really understanding those inputs. I was just giving you an example right at the bank and producing those outputs. And that's really the basis for getting your pricing right, is to look for those signals, understand that consumer, what do numbers say? And sort of blend that art and science together.
[00:26:08] Speaker B: First thing you learn.
[00:26:09] Speaker C: Don't know how to do it.
[00:26:10] Speaker B: First thing you learn on the street, I'm assuming, is garbage in, garbage out.
[00:26:15] Speaker C: You said it. So if you're getting wrong information, if you're just making stuff up, then on the other end, on the outputs, they're going to be problematic for you, right.
[00:26:24] Speaker B: Or collecting the wrong info. Are you looking at the wrong stats? Right.
[00:26:28] Speaker C: Or you have an incomplete picture? Right. And this is where some customers can get into trouble if they are only looking at, say, for instance, when customers are saying no and are telling you your prices are too expensive and they maybe they think, oh, gee, I need to cut my prices and reduce them. Well, those were just your smallest, most price sensitive customers who actually aren't even a great fit for you. You're listening to them about your value, and now because of that, you're undercutting the value elsewhere and leaving a lot of money on the table.
[00:26:58] Speaker B: So I know we're rushing through what's probably the most important part. We should probably do a part two of this here and talk about this in greater depth. But you developed an idea, a strategy, a whole approach through fumbling through this process and discovering what works and doesn't work. And you built into a successful company now where big giant companies go hire you and say, marcos, we don't know what to price this, can you help us out? And that's really what you do. And you kind of use somehow this street vibe that you have. Let's get down to the street and understand basic what the customer wants. Who is the customer? What are they looking for? What will they pay? And even the psychology of a lot of stuff in your book about the psychology of numbers, talk about this just real quickly. Like if you say 1900 or if you say five or something, there's all this. I was fascinated. The psychology of what you say in numbers and really getting into people's heads, how they respond to these different offers here. Talk about that just a little. How do you figure out the psychology of what works and what doesn't?
[00:28:02] Speaker C: Yeah, you know what? I'll give you a couple of things. One is, when we work with our clients, they bring us in to tell them what they need to hear, not what they want to hear. And so when we get street with it, we are telling this, you want to go upmarket, but what we're hearing from your customers is that you don't serve them well. You don't serve them well. So why would you charge a higher price and justify it when your customers are saying you're missing some key features or big gaps? Whatever it is, we need to bring you back into reality. That's what getting street is about. And that's why a lot of companies like working with us, because it may not be pleasant and rainbows and unicorns all the time, but we have to tell you, this is the better path. Secondly, when we start introducing our frameworks and concepts, we do want to make sure that they're paying attention to both art and science. And I mentioned about the humans buying from other humans. Right? So psychology plays a big role into how we assess how much something is worth and if we're willing to trigger to make that buying or purchase decision, how it feels.
[00:29:01] Speaker B: Does that feel right? Does that feel enough? Does that feel too expensive? Does that feel just right? The goldilocks thing, does it feel just right? Too hot, too cold? Now just right.
[00:29:09] Speaker C: It's exactly the case. So think about buying a slice of pizza even. Right? Can you tell me your maximum price point for a pizza? Is it $4.92? No, you know general magnitudes. Yeah. I'll pay a dollar. I'll pay $5, whatever that is.
[00:29:23] Speaker B: But I'm not going to pay $20, probably, for.
[00:29:25] Speaker C: I'm not going to pay 20. Right. So there's always a natural range, a comparison, anchor point. All these things that humans do, that, if you understand what those things are, puts you in a much stronger position to price your product. Okay. And there's all sorts of psychology around the number nine and how that's a charm and signals a bargain. Numbers, fives and zero, which is a little bit easier to do. Math, creates a better sensation in the mind. You also have different concepts around the length of numbers. So if I were to tell you $97.95, that feels more expensive than just saying 98. It really does. Even though 98 is higher, you just have more numbers to consume in the mind. So there's lots of things around, making the brain comfortable and easy to read the numbers and understand it, to make your pricing feel better, which then makes them a little bit more willing to pay for it.
[00:30:17] Speaker B: Go get the book. Street pricing. It's a fascinating look at Marco's life, and he then relates that experience. The last question is, how do you tie this back into hip hop? The street feeling you have, again, hip hop, to me, seems, I'm sorry to say, f the cops and very yo and aggressive and domineering and stuff here. But you really found a beauty in it. You really found a story in it that. A layer that I didn't see. I had to take another listen to hip hop to talk about the human drama and the human stories that you did there and how that then relates to street pricing. Connect this all back together, this strange connection, bringing it back to where you started, bringing it back to the street here. Why hip hop for the book?
[00:31:02] Speaker C: So why hip hop for the book? So think about this way. When you listen to hip hop music, there's storytelling about struggle. There's storytelling about triumph. There's storytelling about unity. Yeah. There's frustration and bravado that happens. And you'll get a lot of those things in there, too, because those are real human emotions. And when I found that hip hop is so unfiltered in how you feel about something and how you address something.
[00:31:27] Speaker B: Very unfiltered, very wrong, very unfiltered.
[00:31:29] Speaker C: And it's also catchy and memorable, like some of these songs, you'll get in your head, you'll hear 2 seconds of the beat, you'll know what it is. And I want, okay, let's get unfiltered with pricing. Let's just peel it back and get to really what drives the value, and let's make it memorable so people can actually repeat it and do it over and over again. And that's where that blend started happening. So we have a process we call five Q. It's one of our biggest frameworks, and I tie it to the song. I got five on it, which is a very popular, catchy song. And I blend the message of the lyrics and the purpose of the framework in that chapter, in that track. So it really was taking messages and purpose and unifying them in a way that makes sense.
[00:32:12] Speaker B: So, as we're doing the audiobook, I was fascinated by your story. I was fascinated by your insights into human psychology, theories of numbers, and how people react to stuff and how they judge themselves. That feels right. That doesn't feel right. And then relating it to what you still see is a beautiful musical form here that I guess I had dismissed as just kind of very, not much depth to it and real kind of just aggressive, cocky kind of world of hip hop music. You really opened my eyes to something. So I think if people really want a fascinating read, go get the book. Street pricing, it's out everywhere, and it's really that kind of, it's like a hip hop approach. You're using hip hop as somehow a metaphor to tell a story of your life and of the world that we live in and the culture that is all around us here, and using that to understand better how to do something very technical on a very high level. SaaS pricing models. It's an amazing combination. It's an unlikely combination, and that's what I think catches everybody's eye and ear. All right, well, so the podcast is an outgrowth of that. It's the continuation of the story. The beat goes on.
[00:33:28] Speaker C: The beat goes on. We started the conversation with the book. Let's keep it going in the podcast. Let's get some unfiltered real stories of how people actually did pricing, how they overcome it, how they move away from guesswork, where do they fail, where do they succeed? And let's use that to start democratizing pricing. Let's get people to understand it, not fear it.
[00:33:47] Speaker B: Are people ready to get that real about pricing? Are they really willing to admit to be vulnerable and say, I didn't know, I don't know, I made a mistake, because businesses and hip hop, too, kind of has that kind of Persona. I'm not going to apologize. I'm never going to say I'm wrong. I'm never going to admit that I didn't know. But that's really what this process is about. It's about understanding what you don't know and getting back in touch with the reality, the real deal, the real street, the real people, the real customers, all that seems like that's it.
[00:34:18] Speaker C: So we want to keep it real. No sidestepping, no sugar coating. I'm not going to let you, but let's get into, how'd you figure this thing out? Let's do it.
[00:34:25] Speaker B: All right. Well, I look forward to it each and every week, right here in Orange County's only community radio station, OC talk radio. We're going to stream it live. It'll be found as a podcast everywhere, video versions of it, everything. You're going to see it everywhere. And it's a very colorful look at a very, what seems like to me, kind of a dull subject. Are you the only one that sees the color and the beauty and the complexity and the art of pricing models? Everybody else just groans and says, I don't know, just pick a price and let's go with it here.
[00:34:56] Speaker C: I get the looks. I get the funny looks all the time when I talk about what I do. But once I get into and open up a little bit of what's really happening, again with that art and science, people dig it. People dig it. So it just takes a minute to understand it at a deeper level.
[00:35:10] Speaker B: Well, we live in a pop culture, and you're bringing kind of a real pop hip hop feel and flavor. That's who you are. And it certainly comes out in the book. It certainly comes out in meeting you. The joy that you see in that music, the discovery you see in that music, the insights into human beings that you see in that music, and the insight it gives us of the culture. This isn't my dad's culture anymore here. This isn't 50s America here, where everything was command and control. They told you what the price was, and you just accepted it. They told you you could get any color you wanted as long as it was black. They made those decisions for you. And now we live in a world where people say, I don't want somebody telling me and imagining things. I want choice. I want some say in it. And I still say, we live in a world. I'll leave you with this, that it's more, at least on consumer base, it's more feeling than it is fact. I don't know if I trust the facts anymore, but I trust my feel. How does that feel to you? Does that feel right?
[00:36:09] Speaker C: Does that feel good?
[00:36:10] Speaker B: Does that feel about right? We're all living in a feeling world, so if that's the place we've at, then we've got to get in touch. And hip hop seems to be a very raw feeling kind of music. People are expressing their feelings in very raw, real ways, sometimes shockingly raw in real ways. But you see a beauty in that and an honesty in that that I think you bring to your whole business here. I don't know.
[00:36:31] Speaker C: It connects, man. It'll surprise you, but it really connects.
[00:36:34] Speaker B: All right, well, I connected with you in this story, and I'm thrilled that we're going to help produce this and put this together. Tell us real quickly who we're going to hear and what we're going to see. We've gone a little over here. Give us some examples of what's coming up in the future episodes here.
[00:36:46] Speaker C: Yeah. So we have lined up a real good set of proven leaders in SaaS. These are folks that actually have gone through and changed their pricing somehow. So, for instance, we do have a chief product officer from a really successful, fast growing SaaS company that has implemented pricing, saw the benefits, made a whole discipline around it, and is reaping those benefits year over year. They've almost doubled the size of their company since then, and they've gone through some trials and tribulations and they also had some really great successes. And he's super, brutally honest about what went on. So I'm super excited to get that person on. It's going to be fantastic.
[00:37:22] Speaker B: Okay, well, that's the kind of stories. We're keeping it real. You're keeping it close to the street. This is not a ivory tower examination of the world where we're going to figure this out and then we're going to bring it down like that. Moses brings the tablets down from the mountain and says, here are the ten Commandments. It seems like a whole kind of ground up feel that you're doing with this whole world here, and it reflects where you came from. From the streets back to the streets. Thank you, Marcos Rivera, for joining us. I'm tuning in Wednesday show. It's every Friday at 09:00 a.m. Pacific time.
[00:37:55] Speaker C: Yes, Fridays at nine is where we're going to post it so that way folks can access it, maybe listen to it over the weekend, watch it on a Friday. So that's what we're going to aim for and looking forward. I'm excited to get these things out.
[00:38:06] Speaker B: Okay. Look forward to it. Street pricing the podcast the conversation continues. The beat goes on right here in Orange County's only community radio station, OC talk radio. Streaming live from our studios here at the University of California Irvines applied innovation center.
[00:38:22] Speaker A: Thank you and much love for listening to the street pricing podcast with Marcos Rivera. We hope you enjoyed this episode. And don't forget to like and subscribe. If you want to learn more about capturing value, pick up a copy of street pricing on Amazon. Until next time.
