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by enaaem 2297 days ago
Very good point! Let's say you move into a new market, trying to undercut the status quo. The status quo, with their power of scale and experience can just undercut you back. Who is benefitting from this? The customers! So if the customers want more competition they have to pay you to play. Which means they have to co-invest with you and promise to buy your service later.

A good is example are the Apple iPhone screens. If Apple wants a new competing supplier, they have to invest in new competitors.

1 comments

Not really. Suppose giant A undercuts startup B where A is making a temporary loss but B runs out of money trying to complete, only A remains in the market and A starts charging a premium since it doesn’t have completion.

This is bad for customers in the long term. Like how Amazon is slowly destroying brick and mortar stores, or having Amazon Basics at the front undercutting other sellers. Monopolies mean you don’t have an open fair market anymore.

It's true that benefits for customers would likely be only temporary. But that is not my main point.

I'm explaining a common business move called pay to play, in industries that require very high investments for new competitors. If customers want B to compete, they have to pay B first to ensure B does not make a loss, so everyone wins a little in the end.

So in the case of OP. He needs to finds paying customers first, who are willing to pre-order his service.