Carving out market share and aiming for an acquisition exit is a valid win condition.
replyIt also serves the consumers in the long run as it eventually will force competition and price reductions; effectively busting up price leadership dynamics.
This isn't commoditized because an incumbent has the market share, it's commoditized because there are dozens of providers in a crowded market. So what is likely going to happen is there will be a race to the bottom in terms of price.
replyPS - This is why I loathe advice from prominent software co operators. It's not one size fits all. Uber's strategy is going to be very different than Tesla's strategy which is going to be very different from Amazon's strategy.
unless the startup has gobs of free money how can they do this against an incumbent? note: nobody has gobs of free money anymore, except the incumbents. Startups competing on price is typically not a winning strategy, unless they have some technical advantage that shifts the price curve; subsidizing a move on it doesn't work.
replyIt's the latter for us. We have healthy margins even at this price point. So we don't actually need a lot of money to do this against incumbents.
reply.. Don't you think it suspicious/sounds too good to be true?
A newly created product space with insane margins, and easy to compete in?
replyEasy to compete+huge margins -> lots of competitors who compete on price -> commotidization -> lower margins -> not good
haha, the inevitable cycle of capitalism.
reply