Part 2 of 12 in How Much Should You Charge?: A Guide for Indian Entrepreneurs← Part 1Part 3 →
This chapter explains why many new products fail to meet financial targets and how pricing decisions contribute to that failure. It helps Indian entrepreneurs design products around what customers will pay instead of treating price as an afterthought.
- About 72% of new products fail to meet their financial targets, often because they were not designed around customer willingness to pay.
- Indian startups may copy Silicon Valley growth strategies or underprice products because they assume customers are price-sensitive.
- Building features first and asking about price later can create feature shock, minivation, hidden gems, or undead products.
- Willingness to pay should guide product design before significant resources are committed.
- Early pricing decisions can reduce wasted effort and support simpler products with scalable pricing architecture.
Why 72% of Innovations Fail, and Why India Is No Exception
Ramanujam and Tacke cite internal Simon-Kucher research showing that about 72% of new products fail to meet their financial targets. Some fail completely. The failure is rarely because engineers cannot build the product. It is because the product was not designed around what customers will actually pay.
In India, the problem is amplified. Founders often copy Silicon Valley playbooks, raise money, build features, acquire users at any cost, and hope monetization will come later. Or they underprice heavily because “Indian customers are price-sensitive,” leaving money on the table and creating a brand that cannot later raise prices without losing customers. Both approaches destroy value.
Consider the typical journey of many Indian startups. A founder spots a problem, say, small manufacturers struggling with inventory or parents wanting better English speaking practice for their children. The team builds an MVP with as many features as possible so that it looks impressive in a pitch deck. Only after the product exists do they ask, “How much should we charge?” By then, the cost base is fixed, the feature set is locked, and salespeople start discounting just to close deals. The result is either feature shock (too many features nobody will pay extra for) or a minivation (a good product priced so low that it never generates meaningful revenue).
This sequence is backwards. The most important question is not “Can we build it?” but “Will enough customers pay enough for it to create a viable business?” That question must be answered before significant resources are committed.
The Four Monetization Failures
The original book identifies four classic failure modes. All four are visible in the Indian startup ecosystem:
Feature Shock: Cramming every possible feature into one product so that it becomes expensive to build and confusing to buy. Many early edtech and HR-tech products suffered from this. Customers saw a long list of features but could not clearly see the one or two things that justified the price.
Minivation: Pricing so low that even success does not produce meaningful profits. Some D2C brands and marketplaces chased GMV with deep discounts and never recovered. Volume grew, but unit economics never worked.
Hidden Gem: A feature or product that customers would gladly pay for, but the company gives it away or never commercializes it properly. Sometimes the best opportunity sits inside an existing product and is never properly packaged or priced.
Undead: Products that customers do not really want. No amount of pricing creativity can save them. These are the ideas that look good in presentations but fail when real money is on the table.
The central claim of Monetizing Innovation, and of this book, is that these failures are not inevitable. Willingness to pay should drive product design, not follow it. Price is not just a number you put on a tag at the end. It is the clearest signal of what customers value and how much they value it.
Indian founders who internalize this shift early gain a structural advantage. They waste less time and money building features that do not matter. They design simpler products that are easier to explain and sell. And they enter the market with a pricing architecture that can scale profitably.
Frequently asked questions
Why do 72% of new products fail to meet financial targets?
About 72% fail to meet their financial targets because products are often not designed around what customers will actually pay.
What are the four monetization failures?
The four failures are feature shock, minivation, hidden gem, and undead. They describe products with excessive features, prices too low for meaningful profits, uncommercialized value, or insufficient customer demand.
Why should Indian startups decide pricing before building a product?
Pricing should be considered before significant resources are committed because the cost base and feature set may otherwise become fixed, leading to discounting and weak unit economics.
What does willingness to pay mean for product design?
Willingness to pay should drive product design. It shows what customers value and how much they value it.