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> If they reduce price to $10/m they'll need 5x customers to reach same revenue This assertion could only start to make any sense if you believe that the law o

> If they reduce price to $10/m they'll need 5x customers to reach same revenue This assertion could only start to make any sense if you believe that the law of supply and demand doesn't exist, and that economies of scale don't apply. Meanwhile, I am a paying customer of cloud providers eventhough I don't use them just because they are affordable. This service expects that people like me spend 600€/year when I can have the same exact service somewhere else for 60€/year.

Closi 6y ago
Well the assertion is just a mathematical fact, there is a disagreement on the demand curve. Maybe the company isn’t targeting anyone who is a paying customer of cloud providers, and is targeting full time cloud architects who need more than the other products offerings.
- rumanator 6y ago
  > Well the assertion is just a mathematical fact, It really isn't. You're somehow assuming that the law of supply and demand doesn't exist. As the premise is blatantly wrong then this mistake renders all subsequent assertions mute. > Maybe the company isn’t targeting anyone Irrelevant. The initial assertion was that higher prices somehow had no inpact in demand and thus revenue would be proportional. This assertion is blatantly wrong. The fact is that lower prices increase demand, and increased demand enables economies of scale, which lead to higher revenue. Conversely, higher prices lower demand, etc etc. Market segmentation is tangential to this point.
  - Closi 6y ago
    > It really isn't. The assertion was "$10/m they'll need 5x customers to reach same revenue" Revenue = Price * Quantity Sold. Let x = Quantity Sold, and y = revenue $50 * x = y $10 = $50/5 $50/5 * x = y/5 $10 * 5x = y OP stated a fact, and you said it was incorrect. I'm just trying to say the disagreement is actually about how elastic the price is (i.e. a change of x% in price results in a y% change in the number of customers).

Closi 6y ago

Well the assertion is just a mathematical fact, there is a disagreement on the demand curve. Maybe the company isn’t targeting anyone who is a paying customer of cloud providers, and is targeting full time cloud architects who need more than the other products offerings.

rumanator 6y ago
> Well the assertion is just a mathematical fact, It really isn't. You're somehow assuming that the law of supply and demand doesn't exist. As the premise is blatantly wrong then this mistake renders all subsequent assertions mute. > Maybe the company isn’t targeting anyone Irrelevant. The initial assertion was that higher prices somehow had no inpact in demand and thus revenue would be proportional. This assertion is blatantly wrong. The fact is that lower prices increase demand, and increased demand enables economies of scale, which lead to higher revenue. Conversely, higher prices lower demand, etc etc. Market segmentation is tangential to this point.
- Closi 6y ago
  > It really isn't. The assertion was "$10/m they'll need 5x customers to reach same revenue" Revenue = Price * Quantity Sold. Let x = Quantity Sold, and y = revenue $50 * x = y $10 = $50/5 $50/5 * x = y/5 $10 * 5x = y OP stated a fact, and you said it was incorrect. I'm just trying to say the disagreement is actually about how elastic the price is (i.e. a change of x% in price results in a y% change in the number of customers).