4 ms·
This works unless they have so much VC cash that they lower their prices into massively negative margins for long enough to kill competition. Then they either d
by leetharris 3y ago
This works unless they have so much VC cash that they lower their prices into massively negative margins for long enough to kill competition. Then they either die or jack the prices up.
This has happened to two companies I've worked at. It's the biggest problem with VC funding. It creates an unhealthy ecosystem.
- piva00 3y agoAnd that tactic is usually called dumping in international trade, it's one aspect of the VC-funding tech culture that I don't understand how hasn't been fought with regulation, it's incredibly anti-competitive since the price is artificially low and only sustained by losses through a massive amount of capital. It isn't healthy for the free market, it might lower prices for customers for the period while dumping makes sense and a competitor outlives others but it will inevitably lead to increased prices when a company finally engulfs a big enough marketshare to be safe. Predatory pricing is a ridiculous practice, killing a lot of innovation.