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Wouldn’t that work in _favor_ of the startup idea? If the hardware is a commodity and the market is for a bare-bones, self-serviceable “just a TV”, then the st

Wouldn’t that work in _favor_ of the startup idea? If the hardware is a commodity and the market is for a bare-bones, self-serviceable “just a TV”, then the startup should have significantly lower engineering costs and benefit from the low component costs. Given that people on this thread are stating that they would pay a premium for such a product makes it seem even more viable. Maybe other people have different “serviceability” definitions, but I once replaced the main board of a broken Vizio smart TV —- there were only two components —- a power board and the main electronics board. The hardest part was tracking down a replacement board, but $35 and a few screws later and I had a working TV again. That met my definition of self-service.

tialaramex 6y ago
Maybe. There can be a problem with the size of that premium. Suppose end consumers think fixing this is worth $50 but not worth $100. If the outfit selling a "SmartTV" gets $80 lifetime value from the "SmartTV" features like forced advertising and margins are slim you probably find you can't offer this "dumb TV" for $50 extra without losing money, and you have no customers and go out of business. On the other hand, it could go pretty well. We know advertisers see people who buy premium products (which such a "dumb TV" would be since it costs extra) as more valuable in a lot of categories, so maybe you charge $50 extra for the dumb TV and - as it takes off - that undercuts the advertising income of the existing products, so they have to raise prices to remain profitable and that actually improves your affordability compared to the market. Or else they make advertising even more intrusive and pervasive to keep the revenue up, and it makes your $50 premium appear a bargain by comparison for those sick of advertising.
cameronbrown 6y ago
What people on HN say they would pay for, and what people actually pay for, are very different.
- nitrogen 6y ago
  There's both a time lag and the influence of manipulative product offerings. "Revealed preference" is just code for exploitation of vice.
renewiltord 6y ago
* They're not going to buy it for the most part. They just like saying "I would buy it". Ultimately, price will determine almost all. You can see this when the already committed market for open source phones just didn't materialize when the device arrived. Turns out when people say "I want an OSS phone" they mean "I want a phone that is exactly like this top of the line phone but the software should all be OSS and it should not be a penny more expensive". In this case, you can judge by the fact that these already exist and when people say "significantly more" they mean "5% more" because they don't actually buy the thing. * You can't compete on price because the TV guys are selling access to the data they collect for ad targeting / attribution. But don't let anyone stop you from doing it. None of us thinks this is worthwhile, so you might be on to a Thiel Truth.

tialaramex 6y ago

Maybe. There can be a problem with the size of that premium. Suppose end consumers think fixing this is worth $50 but not worth $100. If the outfit selling a "SmartTV" gets $80 lifetime value from the "SmartTV" features like forced advertising and margins are slim you probably find you can't offer this "dumb TV" for $50 extra without losing money, and you have no customers and go out of business. On the other hand, it could go pretty well. We know advertisers see people who buy premium products (which such a "dumb TV" would be since it costs extra) as more valuable in a lot of categories, so maybe you charge $50 extra for the dumb TV and - as it takes off - that undercuts the advertising income of the existing products, so they have to raise prices to remain profitable and that actually improves your affordability compared to the market. Or else they make advertising even more intrusive and pervasive to keep the revenue up, and it makes your $50 premium appear a bargain by comparison for those sick of advertising.

cameronbrown 6y ago

What people on HN say they would pay for, and what people actually pay for, are very different.

nitrogen 6y ago
There's both a time lag and the influence of manipulative product offerings. "Revealed preference" is just code for exploitation of vice.

renewiltord 6y ago

* They're not going to buy it for the most part. They just like saying "I would buy it". Ultimately, price will determine almost all. You can see this when the already committed market for open source phones just didn't materialize when the device arrived. Turns out when people say "I want an OSS phone" they mean "I want a phone that is exactly like this top of the line phone but the software should all be OSS and it should not be a penny more expensive". In this case, you can judge by the fact that these already exist and when people say "significantly more" they mean "5% more" because they don't actually buy the thing. * You can't compete on price because the TV guys are selling access to the data they collect for ad targeting / attribution. But don't let anyone stop you from doing it. None of us thinks this is worthwhile, so you might be on to a Thiel Truth.