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From the article: "...look around for a profitable business... and build up a product that you can give away for free" I don't understand why techies are so qu

by lrobb 15y ago

From the article: "...look around for a profitable business... and build up a product that you can give away for free" I don't understand why techies are so quick to flip the "Race to the Bottom" switch as the defacto product marketing strategy. Consumer electronics compete on price because they're mainly commodities... Your Samsung TV is pretty much identical to your Sharp or your Sony. How do you differentiate? Price. There's so much more innovation that you can do in software that competing on price is pretty lame. "Clearly this is a more appropriate meta-idea for software / internet products where the cost of replication and distribution is almost zero." S/he gives the example of Plenty of Fish... I guess it depends on how you define "almost", but scaling up to support that many users (which is required to make serious $ off of "free"), you certainly have real costs. POF has hundreds of thousands of dollars invested in servers, not to mention bandwidth/elec costs.

jayliew 15y ago
Hi there, thanks for the feedback. The focus of the article was most certainly more of "how to extract value in creative was other than the most obvious: straight up paying for it with cold hard cash" (less so encouraging people to race to the bottom). I suspect most early stage pre-traction / pre-funding startups fail because they can't "monetize" in some way - hence the list of ideas. Certainly if you can't monetize, racing to the bottom isn't going to help. Differentiation of value proposition wasn't the topic of discussion either - but yes, I'm not a proponent of differentiating by price point alone. As for the example, Match and eHarmony certainly have "real" support costs too, and I did not say that POF did not. All three have server, bandwidth, electricity cost too. I'm not sure what your point is. My point with that example was that of those 3, POF has a different way of extracting value for itself (the central topic of the blog). I apologize if I sound defensive, I'm not. I thank you for the feedback and for challenging me to think through :)

by lrobb 15y ago

jayliew 15y ago

Hi there, thanks for the feedback. The focus of the article was most certainly more of "how to extract value in creative was other than the most obvious: straight up paying for it with cold hard cash" (less so encouraging people to race to the bottom). I suspect most early stage pre-traction / pre-funding startups fail because they can't "monetize" in some way - hence the list of ideas. Certainly if you can't monetize, racing to the bottom isn't going to help. Differentiation of value proposition wasn't the topic of discussion either - but yes, I'm not a proponent of differentiating by price point alone. As for the example, Match and eHarmony certainly have "real" support costs too, and I did not say that POF did not. All three have server, bandwidth, electricity cost too. I'm not sure what your point is. My point with that example was that of those 3, POF has a different way of extracting value for itself (the central topic of the blog). I apologize if I sound defensive, I'm not. I thank you for the feedback and for challenging me to think through :)