5 ms·
I believe engineers over-rate the cost/feature-consciousness of consumers and under-rate brand consciousness. People do want to shop on price, but they want a
by krschultz 12y ago
I believe engineers over-rate the cost/feature-consciousness of consumers and under-rate brand consciousness.
People do want to shop on price, but they want a discount on the brand they know. That's why they'll buy a laptop for $20 less on Amazon than at Best Buy, but they probably won't buy a non-name brand laptop.
I don't even think his examples are compelling. There were action cameras before GoPro, there are alternative cameras on the market now. Some have different form factors, some are cheaper, some are better. At the end of the day, GoPro is plastered all over every action sport competition and their daily video email gets millions of views. That's harder to replace than the actual tech - especially when the product itself needs to be redesigned every 18 months.
Also note that "come in under the incumbent's price" is a bad startup strategy. The incumbent has economy of scale & bulk pricing advantages the startup can't match. The only way to do it is to build a different product that is so much cheaper to make that you can squeeze the same margins in a lower price tier. If that's possible, then it means GoPro has shot over what the market needs. In that particular case, I don't think it is true today. It might be true someday.
In AWS's case, I actually think the competitive play is on the higher end. Everyone is trying to undercut AWS's price (generally by giving it away for free). I feel that the last 20 years has shown trying to get under Amazon or Walmat's price is a bad strategy. How can anyone get under their price at smaller scale without taking a "strategic" loss or having 0 margins? I'd rather compete on the high side by offering better docs / UI & UX / support and not be competing completely on the price of hardware.
- jedrek 12y ago> I believe engineers over-rate the cost/feature-consciousness of consumers and under-rate brand consciousness. I agree. They also tend to discount the value of an ecosystem around various high profile electronics goods. Apple and gopro are both amazing examples of that, there are hundreds of accessories for every iPhone and every gopro camera. Then there's the value of a known workflow, of positive word of mouth and, finally, a feeling of community. People would much rather ask a friend who owns a product about some issue than hit the Internet to find a solution. GoPro and Apple both also tend to bring killer features to market first. Be it TouchID or 4K 30fps for $600.
- deitcher 12y agoOK, but who pays for 4K 30fps at $600 other than pros?
- ghaff 12y agoGoPro is probably an even better example of winning based on brand than Apple is. A good argument can be made that, while Apple does have an extremely strong brand, it's complemented by differentiated product, service, and a strong ecosystem. I'd argue the GoPro product is just OK--there's a lot I don't like about the overall UX--but it owns the category in terms of awareness and nails the whole action sport thing even if that's more aspirational than actual for most buyers.
- jccooper 12y agoBrand-sensitivity scales with price and the need for quality. Almost no one will buy an off-brand car, but most people will buy an off-brand cheap plastic toy if the price is better. Action cameras are probably on the low end of that scale, unless it's your job, so I'd suspect a much-cheaper version to fare well--especially if it's cheap enough you can buy it just to see if it will do the job. Also, the no-name cheap brand can become a known one pretty quickly. Brand is not a long-term defence to being undercut. It can give you some time to adjust to the new market being created, though.
- brianbreslin 12y agoI agree 100% with your comment. There are intangible "values" that people associate with GoPro vs cheapo chinese knockoffs that are 1/5th the cost.