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by MichaelZuo 643 days ago
If your product’s value proposition is that fragile, that it can be eroded down to near nothing just via some schemer(s) with more money in the bank account saying ‘free’… then maybe it’s just not that big of an improvement over the status quo?
2 comments
cm11 643 days ago
I think there's two ways to read this. One is that maybe a lot of startups are not improving the status quo today. Perhaps this is right. If so, I don't think it would negate the environment described.

If the intent is that solid value props can't be eroded in such an environment, I'm not sure I agree. The issue I think is less about value prop, it's closer to not having a moat. Or one that can't be bought anyway. People are paying for and using the product—so there's some value prop—but then it's being copied and sold for free (at a loss). The competitor may even pay to take customers. I'm not sure that stronger value props are inherently harder to copy or harder to buy users.

For the bootstrapping startup to win, it needs to find a product people want, create it from scratch, then find a non-money-based moat. The startup with the money can copy the idea, create it (benefiting from your blueprint), and then find the moat (with some capacity for it to be money-based).

In any case, I think the need for value prop lessens in this environment. If we're talking purely about getting paid and you have the option to do so via exit rather than only via profit, value prop becomes a means and maybe not even required one.

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MichaelZuo 643 days ago
It generates some customer loyalty, on average, which does impede, somewhat, outright buying of customers or enticing them with lower to free prices.

Of course loyalty is not perfectly sticky, nor can it ever be, but then again enticements can not be perfectly attractive either.

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afavour 643 days ago
Silly take. If my product is worth $5 and I sell it for $6, that’s a sustainable business. If a competitor uses VC cash to subsidise their operation and charge $1 they can run me out of business, then they’ll charge $6. Or, hey, $7, why not.

But it has nothing to do with my products value proposition.

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MichaelZuo 643 days ago
No it isn’t a sustainable business, because the competitive landscape, which it has to be sustained in, would now also include this group out to get you for whatever reasons, for some unknown period of time.
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afavour 643 days ago
That’s exactly my point? VCs distort the market.
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MichaelZuo 642 days ago
“If my product is worth $5 and I sell it for $6…” Is not a sustainable business in that specific competitive landscape.

VCs don’t even need to exist for this to occur.

So I didn’t mention anything regarding VCs and market distortions or lack thereof?

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