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The reality is there are very few other types of businesses where you can scale your product so cheaply and still save or increase productivity to justify high
by datacruncher01 3y ago
The reality is there are very few other types of businesses where you can scale your product so cheaply and still save or increase productivity to justify high prices. Sure music and entertainment can scale but at the end of the day, it's regular people buying the product and there's only so much money there.
It's a temporary issue, rates being what they are means money goes to easier profits. Just like the dotcom bust, it'll eventually make a comeback but good luck figuring out if your company will survive it.
- hotpotamus 3y ago> you can scale your product so cheaply and still save or increase productivity to justify high prices You've just nailed an aspect of the software industry that I've never understood; if it's so easy to cheaply scale a product, then what's preventing a competitor from charging a bit less and beating your high price?
- datacruncher01 3y agoNothing, that's why VCs will invest an enormous sum to grow faster than the competition to become the dominate player. Once established and people are used to the product other companies will struggle to compete against it without doing so purely on a cost cutting model that they can't sustain against bigger players. Problem for many companies is that they are in the middle of a constantly changing tech landscape and become obsoleted fairly quickly or try and use their size to artificially increase margins too much and allow for competitors to eat their market.
- layer8 3y agoRegulatory capture. Network effects. Bundling. Anti-competitive practices. Data moats. Patents. Domain expertise.