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> Pricing at a loss by VC funded companies is great for consumers. It rarely is at a loss though - they look at the lifetime value. It's great for consumers on
by piva00 1y ago
> Pricing at a loss by VC funded companies is great for consumers. It rarely is at a loss though - they look at the lifetime value.
It's great for consumers only in the short term, the strategy to drive out competition that are not as well-funded has only one goal: to remove competition in the long-term to drive up prices at your will since most competitors won't have the chance to exist.
Edit: yes, technically dumping is a specific type of predatory pricing, so swap "price dumping" on my first comment to "predatory pricing" instead.
- nl 1y agoIt doesn't have one goal. In fact driving out competition is rarely the goal at all. Instead the goal is usually to reduce the barrier to people trying the thing - especially when it is a developer API which you hope developers will incorporate into their product.
- piva00 1y ago> In fact driving out competition is rarely the goal at all. Driving out competition is definitely a goal, the further you can snowball that makes your company a much more attractive investment since your competition will be bleeding money, attrition is definitely used as a tactic by VCs when a startup gets traction. Hell, it's one of the arguments they use to run further rounds of investments to others "this startup is very well capitalised and the competition has 1/10th of their funds, investing elsewhere is a losing proposition". > Instead the goal is usually to reduce the barrier to people trying the thing - especially when it is a developer API which you hope developers will incorporate into their product. I thought we were talking about unicorns such as Uber, AirBnb, etc., not some dev startup packaging APIs to serve other startups which is a whole other incestuous industry.
- guappa 1y agoAI company founder and CTO defends those practices… yawn.