How Peter Murphy Turned $1,800 Into a Multimillion-Dollar Company By Charging Customers Less
A potential partner laughed at Peter Murphy’s $20-a-month pricing. Nine years later, that affordability has become Pocket Prep’s moat.
EXPERT OPINION BY DANIEL ROBBINS, CEO AND FOUNDER OF IBH MEDIA AND HOST OF FOUNDER’S STORY
Nine years ago, Peter Murphy got on a call with a company he hoped would feature Pocket Prep, his exam-preparation app, on its website. Most prep products for the certification cost thousands of dollars. His cost $20 a month.
The two people on the phone giggled throughout the call.
They basically said, look man, this twenty-dollar-a-month thing
“They basically said, look man, this twenty-dollar-a-month thing you guys are doing over here, we can’t make any money off that,” Murphy told me. “Come back to us when you’re charging five hundred or more, because we take fifty percent of every sale. You’re priced too competitively.”
They laughed some more and then hung up.
The daily digest for entrepreneurs and business leaders
An Inc.com Featured Presentation
“I remember thinking, this is either really great or really awful,” he said. “We might actually be bad for them, because we’re twenty bucks a month. People can get the job done with our app and save a thousand dollars on whatever they’re peddling.”
Murphy is proud of that call now because the pricing they laughed at became Pocket Prep’s moat. Pocket Prep turned a $1,800 bootstrap investment into a multimillion-dollar company with 40 employees, helping people pass the professional certification exams that serve as gateways to entire careers.
From Lockheed to startup.
Murphy’s path to becoming a founder wasn’t typical. He spent six years at Lockheed Martin, working on the production floor and coordinating materials. When he emailed colleagues that he was leaving and jokingly plugged his study app, someone replied: “What a shameless plug.” People were baffled that he would walk away from job security.
Source: www.inc.com
