| They don't get lazy. Think of it like a career change at age 42. Imagine being married with a couple of children and at 42 you tell your wife that you are going to spend all of your free time, and a lot of your money working on becoming a lawyer. You want to do this because you think your current career is topped out and you want to be prepared for the future. In 6-8 years you'll be ready for the career change, but you'll need to start at the bottom of the laywer pool and work your way back up, your expenses won't change, nor will your obligations, just your income, and it will go down substantially. I worked in a startup and we had a product that cost $1k per seat and it was full featured and slick as hell, but we started getting competition from a company that was selling a bare bones product for $99 a seat. Our customers really liked their price, but they wanted our features, in the end price won and we started losing business to the competitor. Because of my company we actually legitimatized a market for an certain type of after market computer cards, we spent a ton of time and money helping to build the surrounding ecosystem so that our product could have a market. Once we invested all the money, the competitor came along and could ride the ecosystem we built, but we still needed to cover all of our costs, hence our high price. I spent a ton of time arguing with the BOD about pricing and volumes, but they had financial models they had to meet and an $89 product had no place, luckily for us we got acquired because of our expertise and the work that we did to create the market. If we hadn't been acquired we would have been overrun by our competitor, and it had noting to do with lazy. |
As Buffett says, "price is what you pay, value is what you get." Your ex-co failed to provide reasons why customers should pay for the value it offers.
Apple excels at this, despite naysayers saying that a premium consumer electronics is a "bad business".