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What about tackling a large-ish market but competing on price? As a small bootstrapped business, depending on the cost of the product, you just don't have too m

What about tackling a large-ish market but competing on price? As a small bootstrapped business, depending on the cost of the product, you just don't have too many costs. Small companies/single founders have much smaller overhead: there's no 50 person costly dev team on your payroll. So you get to offer a subset of the main competitor's product at a much lower price and still have high margin. It's something I've thought of: many companies I've worked for over the years bought expensive products that weren't necessarily too complicated or crucial, just did things we didn't want to do divert resources to do in-house. Yet the costs ballooned (usually $ per/user) and we kept those subscriptions for a while up until we figured a cheaper alternative. If the costs had not increased so much there'd be nothing to move off of, we'd have been happy forking over money.

carlosjobim 3y ago
Competing on price gives you the worst type of customers. If you can deal with that then you're good. It's like some weird glitch in the human psyche - instead of appreciating that they can get their product or service for a better price, they fell like they're being cheated and will start causing problems. I have no idea why it is like this. Maybe they're pissed off for having to buy the thing and that's why they were looking for the cheapest offer to begin with?
lapcat 3y ago
> As a small bootstrapped business, depending on the cost of the product, you just don't have too many costs. The cost is in acquiring customers, as mentioned by the article. "Sales and marketing are both major time drains and you can't spend all your time doing them." I would say money drains too. A small business can't "make it up in volume" like a big business can.
- dinvlad 3y ago
  While difficult initially, a small business doesn’t need as much volume though - you might “only” have a few customers, but that’s gonna be enough to feed you and maybe your family. Plus, small business customers can stick around for longer, because you develop an authentic relationship with them, while delivering similar or better quality product at a fraction of the price of the big ones. I.e. you have an inherent edge, and it’s more about quality than quantity, while the bigger ones simply can’t afford that.
  - lapcat 3y ago
    > a small business doesn’t need as much volume > a fraction of the price of the big ones These two things are inherently in conflict. low volume * low price = low income
    - dinvlad 3y ago
      They are not. Low is relative! Where a big company charges you 300,000K/year, I will charge you 30K and I have 10 of you, so still a win for me :-)
      - lapcat 3y ago
        > Where a big company charges you 300,000K/year, I will charge you 30K and I have 10 of you, so still a win for me :-) I think you're inventing an entirely unrealistic hypothetical scenario. The original commenter asked, "What about tackling a large-ish market but competing on price?" How many large-ish markets are there with $300,000K/year products, and moreover, how many $300,000K/year products can be delivered to 10 different customers for $30K each by a 1 person team? This seems completely absurd.
        dinvlad 3y ago
        Every consultant and successful indie developer does this :-) And no, I’m not talking absolute numbers here. In fact, absolute numbers are sometimes even greater - I know a few prominent solopreneurs who are making millions/year while we argue whether this is possible on HN ;)
        lapcat 3y ago
        > Every consultant and successful indie developer does this :-) I'm an indie developer. > I know a few prominent solopreneurs who are making millions/year while we argue whether this is possible on HN ;) That isn't the argument. It was never the argument, and nobody has disputed that. So you've clearly just misunderstood the discussion here, which may explain why you keep saying absurd things.
jjk166 3y ago
Bigger companies might have more people on payroll, but they are also serving more customers to generate more revenue, and the individuals on that payroll can do their tasks more efficiently because they can specialize and cooperate. There might be times when a bigger company is bloated, for example shortly after a merger, or complacent, perhaps refusing to take on business below a certain volume, but in general they can easily undercut small businesses via economies of scale.

carlosjobim 3y ago

Competing on price gives you the worst type of customers. If you can deal with that then you're good. It's like some weird glitch in the human psyche - instead of appreciating that they can get their product or service for a better price, they fell like they're being cheated and will start causing problems. I have no idea why it is like this. Maybe they're pissed off for having to buy the thing and that's why they were looking for the cheapest offer to begin with?

lapcat 3y ago

> As a small bootstrapped business, depending on the cost of the product, you just don't have too many costs. The cost is in acquiring customers, as mentioned by the article. "Sales and marketing are both major time drains and you can't spend all your time doing them." I would say money drains too. A small business can't "make it up in volume" like a big business can.

dinvlad 3y ago
While difficult initially, a small business doesn’t need as much volume though - you might “only” have a few customers, but that’s gonna be enough to feed you and maybe your family. Plus, small business customers can stick around for longer, because you develop an authentic relationship with them, while delivering similar or better quality product at a fraction of the price of the big ones. I.e. you have an inherent edge, and it’s more about quality than quantity, while the bigger ones simply can’t afford that.
- lapcat 3y ago
  > a small business doesn’t need as much volume > a fraction of the price of the big ones These two things are inherently in conflict. low volume * low price = low income
  - dinvlad 3y ago
    They are not. Low is relative! Where a big company charges you 300,000K/year, I will charge you 30K and I have 10 of you, so still a win for me :-)
    - lapcat 3y ago
      > Where a big company charges you 300,000K/year, I will charge you 30K and I have 10 of you, so still a win for me :-) I think you're inventing an entirely unrealistic hypothetical scenario. The original commenter asked, "What about tackling a large-ish market but competing on price?" How many large-ish markets are there with $300,000K/year products, and moreover, how many $300,000K/year products can be delivered to 10 different customers for $30K each by a 1 person team? This seems completely absurd.
      - dinvlad 3y ago
        Every consultant and successful indie developer does this :-) And no, I’m not talking absolute numbers here. In fact, absolute numbers are sometimes even greater - I know a few prominent solopreneurs who are making millions/year while we argue whether this is possible on HN ;)
        lapcat 3y ago
        > Every consultant and successful indie developer does this :-) I'm an indie developer. > I know a few prominent solopreneurs who are making millions/year while we argue whether this is possible on HN ;) That isn't the argument. It was never the argument, and nobody has disputed that. So you've clearly just misunderstood the discussion here, which may explain why you keep saying absurd things.

jjk166 3y ago

Bigger companies might have more people on payroll, but they are also serving more customers to generate more revenue, and the individuals on that payroll can do their tasks more efficiently because they can specialize and cooperate. There might be times when a bigger company is bloated, for example shortly after a merger, or complacent, perhaps refusing to take on business below a certain volume, but in general they can easily undercut small businesses via economies of scale.