Comment by Zanfa
1 year ago
That’s a bit naive. There are a lot of markets that are effectively impossible to enter without massive amounts of capital and current players are selling below cost.
1 year ago
That’s a bit naive. There are a lot of markets that are effectively impossible to enter without massive amounts of capital and current players are selling below cost.
The vast vast vast majority of companies do not sell a product below-cost.
And if the customers are not willing to pay more, it sounds like they're actually happy with the current offering and that's not an area that your fellow humans would find useful for you to work on.
Yes, one of the responsibilities of a founder is fundraising. If you can't sell people on investing in your vision that is...a somewhat bad sign.
> The vast vast vast majority of companies do not sell a product below-cost.
Maybe in terms of the number of companies, but in terms of percentage of market size, I'm not sure. Literally the entire social media adjacent market at the moment, including instant messaging is about offering a service below cost, killing any chance of non ad supported platforms.
> And if the customers are not willing to pay more, it sounds like they're actually happy with the current offering and that's not an area that your fellow humans would find useful for you to work on.
Not necessarily. This would be true in a world of spherical cows and rational consumers, but that's never going to be the case. There's other considerations like walled garden lock-in and network effects that consumers have no control over.
> Yes, one of the responsibilities of a founder is fundraising. If you can't sell people on investing in your vision that is...a somewhat bad sign.
So it's not about "just go out and build a competitor", but something much more complex, as reality usually is. Even access to venture capital can differ by orders of magnitude between markets.
This comment reads like a very rational, risk-averse person convincing themselves why they should never try doing anything new or interesting.
Yes, markets are democracies which are messy and complicated and competitive and hard and not as easy as issuing top-down decrees from the elite.
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> And if the customers are not willing to pay more, it sounds like they're actually happy with the current offering and that's not an area that your fellow humans would find useful for you to work on.
People would need to have perfect information about all the products they buy in order to truly know if they're happy with them. If they knew and saw first hand all the effects that a product has (poor working conditions, poor pay, environmental destruction, effects on health, etc) they might not actually be happy with these products. It's impossible to research all of these things on everything you buy, and therefore the market does not "care" about any of these things, only about the immediate effects that the buyer can feel.
If people would actually be happier with your solution that's simply a marketing problem, which is entirely solvable.
But I think more often people delude themselves into thinking their thing is better (since it's their baby) when it actually is not, which no amount of marketing dollars can solve.
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> The vast vast vast majority of companies do not sell a product below-cost.
Tha tis true, as they won't survive.
However an established company often has the ability to go on a price war, including selling under cost temporarily, to fight off an up starting competitor and preventing it from entering the market in any serious way. Once they give up, one can go back to higher prices.
Thus only one who can compete is somebody who can use profits from other area, thus some already well established player in a related market.
The problem with many digital offerings nowadays, in particular those that dominate the end user market, is that the user isn’t the customer, but is the product (i.e., directly, or indirectly, ads). Another problem is oligopolies, like Android vs. iOS.