July 17, 2025
This is just anecdotal and not based on any detailed research. But impressions are essential. The first story started with a knock on my front door. A young man introduced himself and offered to trim my cedar hedge, which is a bit disheveled and can be seen clearly from the street. My hedge needs a trim, so I asked him to provide an estimate. He walked along the hedge and came back to say that his team could do it for $250. Seeing my hesitation, he brought down the price to $200.
That sounded good to me, based on experience with hedge trimming. Before making any decisions, I wanted to learn about his experience and the composition of his team. Six recent college graduates formed a team, he explained, with three of them knocking on doors to generate business, and the other three handling trimming. I thought they had no experience at all. However, he assured me that they possessed all the necessary equipment, including tall ladders and trimming equipment.
Now I am always positive about young people initiating a business, and I told him I’ll think about it and to come back next week. I prefer not to make impulsive decisions. And he did come back a few days later. When I asked him when he could do the trim, he took another walk along the same hedge. He came back, explaining that it is a tall hedge on sloping ground, making it challenging to place the ladders. It is a tall hedge, over twelve feet. So, he concluded that the price would be $600.
I said what? Now, wait a minute, I said. You told me a few days ago that it would be $250. My voice indicated exasperation and disbelief. I even smiled at him, at his chutzpah in more than doubling the price. He suddenly changed his mind and offered to do the job for $300. That offer made me more than upset, and I said that I do not negotiate; you gave me a price, and I expected you to honor it. He decided to walk away.
By the way, I thought his final price was reasonable, but I did not like the way he behaved. What guarantee did I have that his work would be good and the cleanup complete?
Several thoughts crossed my mind. When one starts a new business, one marketing approach is to undercut the current market. One should demonstrate that the new company is superior to existing alternatives in at least one way. Why should anyone pay competitive pricing for a new product or service without testing it?
Next story. A couple of people were trimming the cedar hedge behind my house. I walked to the back of my garden and asked if they would be interested in cutting my cedar hedge as well. If so, I asked them to come over and give me an estimate. They did come over after finishing their job, and a young fellow said that he would message me his estimate later that day. Before leaving, I asked him about his background in landscaping and learned that he was studying to be an arborist. That sounded relevant to the job, and I awaited his estimate.
To my surprise, the estimate came in at $900, significantly above what I thought was fair (by the way, I had asked him to trim more of my cedar hedge than I had asked the young fellow I described above). To my response that he was way out of line, he messaged back that he was a bit high and that he could do it for $700. I responded negatively, to which he answered by asking me what I thought was a fair price so that he could learn from it. I give him high marks for sincerity, but why didn’t he work for a hedge trimming company and learn the pricing in the trade before starting his own business?
Now, these two stories do not provide a definitive characterization of today’s young people, millennials, to be sure. But I found it surprising that both started with a high estimate. Why did they not start with a low estimate (the first one did, but when it came to doing the job, he doubled the price)? Or, why did they not ask me what I would pay for the task? That would not be a bad approach; I think most people would come up with a reasonable estimate. When you start working, do you not need to obtain some contracts and build up experience that you can use as a form of advertising?
The new services introduced by the international telecom company I worked for were offered at less than half the price of those offered by our competitors. The purpose was to have our services used and tested by customers, demonstrating the superior quality and features of our services in comparison to the competition. The point is that the seller, a new entrant to an existing market, has to demonstrate the value of their services before prices can be raised.
I was frankly disappointed in the two young fellows trying their hands at establishing a new business without doing some background work, especially in asking for prices way above market rates.
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