If you're starting with $2000 and bootstrapping a textiles business out of Kolkata, it's a terrible idea, you're likely going to immediately get burned and never recover.
(take with a grain of salt as I have no experience, just stating my observations)
A company with $2000 in its first few days need not give away $1000 to act generously.
Yes. Lend them many more pennies, removing the necessity for short-term profit taking and allowing them to run at a loss until they decimate the competition, capture the market and then start raising prices to the point that they are more profitable than had they taken the short-sighted approach.
There's plenty of businesses where you are simply optimizing a funnel, and driving more revenue at all costs is fully aligned with the goals of the company
before the pandemic hit and most of the world was quarantined, we decided to give loom away to students and teachers for free and made the service 50% off indefinitely. this was generous but also strategic. we made the simple deduction that, should people be locked inside, they would naturally see their sons/daughters using loom as students. or their spouse or roommates as teacher/staff.
> experienced that when customers are delighted and that when frictions are removed
Charlie Munger:
When other companies find ways to save money, they turn it into profit. [Costco] passes it on to customers. It’s almost a religious duty. [They] sacrifice short-term profits for long-term success”.
Many different ways to conduct business. "Lean Enterprise" might be in line with your thinking: https://en.wikipedia.org/wiki/Lean_enterprise
> talking people out of trying to prematurely squeeze out every last penny?
I'd say this is a wrong framing. It isn't the people; it is the systems & environs they are in, the incentives they operate under.
Economists have a term they call "willingness-to-pay", using which some business might optimize for "consumer surplus" (low price), some for "producer surplus" (high margin).
See also, The Economics of Customer Businesses, Michael Mauboussin et al, https://www.eatonvance.com/insights/consilient-observer/the-... (2021).
Or Bezos' "Create more than you consume": https://www.aboutamazon.com/news/company-news/2020-letter-to...
Exactly what I came to say. This 100% is hippy dippy head in the clouds stuff. Sure if your product is 100% digital you can "be generous" in so far as it costs you nothing. Real products, real services. Hell no. You will get robbed blind if you give people too much slack or come off as willing to easily pay out.
I learned this the hard way early on doing contract work. Multimillionaires would actively try to take advantages of my naivety and inexperience to coerce free work out of me. Also I highly suspect many of them get a sick sense of pleasure out of it. Good luck being "generous" to those types.
Take a look at those donate for pain videos on tiktok if you don't believe there is significant population of sadists out there.