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I think there is a related fallacy which is to see a current level of demand / characteristics of a market as representing a "natural" and fixed state, rather
by stupidcar 9y ago
I think there is a related fallacy which is to see a current level of demand / characteristics of a market as representing a "natural" and fixed state, rather than a function of constraints such as the cost of resources. E.g. criticism of the viability of SpaceX's Falcon Heavy rocket hinged on weak demand for putting large payloads into space. But this ignores the possibility that payload sizes are constrained because it's too expensive to launch them, and that having a cheaper option will create the market for it. I'd argue that the core of successful entrepreneurship is being able to see through this fallacy, and being able to identify gaps in the market that are the result of hidden, unmet demand, either in terms of price or functionality.
- posterboy 9y agoFor some markets I find it reasonable to assume that high price differentiation is ment to increase the barrier to entry, to keep the market exclusive.