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If the only barrier to entry was money, that would be understandable, but facing artificial roadblocks like those Tile faced seems pretty avoidable with better

by ece 5y ago

If the only barrier to entry was money, that would be understandable, but facing artificial roadblocks like those Tile faced seems pretty avoidable with better anti-trust regulation. I also don't think making software or making a platform is "near zero marginal cost." Sure someone can hack something together with off the shelf components in a short time, but building a sustainable product or service isn't easy and takes a lot of resources. Copycat products or making the nth widget might be things which are low marginal cost, but then those who don't innovate die off.

lotsofpulp 5y ago
The zero marginal cost is for copies of the same software. Whereas physical goods have to continuously deal with suppliers, commodities costs, quality of said suppliers and commodities, efficiencies in manufacturing, etc., there is comparatively near zero of that with software. Once it is made, selling it to 1, 10, or 100 buyers makes no difference which lets you drive the price down in case any competitor should try to come around. As an example, Microsoft bundling Teams with its other software at nearly no cost to Microsoft versus Slack. In a physical product business, a seller does not have as much freedom to bundle in extras at no cost to prevent competitors.
- ece 5y ago
  This is a meaningless argument, like I said, innovation and upkeep isn't free. Software requires just as much infrastructure, tooling, and optimization as making a physical good. Your code will bit rot in weeks or months if you don't keep up with changes. Nobody is going to want the 100th copy if someone else has added a popular feature that I don't have. Lowering the price to build a user base is one thing, doing it just to get a sale is temporary and can't last. (edit: If I'm making a game I need art, if it's an App that uses ML/AI, I need data, and if it's an OS, I need hardware docs. None of these things are easier or harder to get than say wood or metal.) Those wanting to use something other than Teams are still free to choose, the switching costs are the barrier to entry in this case and anti-trust can ensure it's not made artificially higher by platforms.

by ece 5y ago

lotsofpulp 5y ago

The zero marginal cost is for copies of the same software. Whereas physical goods have to continuously deal with suppliers, commodities costs, quality of said suppliers and commodities, efficiencies in manufacturing, etc., there is comparatively near zero of that with software. Once it is made, selling it to 1, 10, or 100 buyers makes no difference which lets you drive the price down in case any competitor should try to come around. As an example, Microsoft bundling Teams with its other software at nearly no cost to Microsoft versus Slack. In a physical product business, a seller does not have as much freedom to bundle in extras at no cost to prevent competitors.

ece 5y ago
This is a meaningless argument, like I said, innovation and upkeep isn't free. Software requires just as much infrastructure, tooling, and optimization as making a physical good. Your code will bit rot in weeks or months if you don't keep up with changes. Nobody is going to want the 100th copy if someone else has added a popular feature that I don't have. Lowering the price to build a user base is one thing, doing it just to get a sale is temporary and can't last. (edit: If I'm making a game I need art, if it's an App that uses ML/AI, I need data, and if it's an OS, I need hardware docs. None of these things are easier or harder to get than say wood or metal.) Those wanting to use something other than Teams are still free to choose, the switching costs are the barrier to entry in this case and anti-trust can ensure it's not made artificially higher by platforms.