[jib]

By your reasoning Amazon are crazy for keeping as low margins as they are. They are leaving money on the table in the belief that as long as they stay somewhat profitable their future earnings will outweigh the short-term benefits from the money grab they certainly could make. They also have the added benefit of being hard to attack this way.

Fred Wilson is making a similar argument. By leaving some money on the table you increase your long term growth potential. People will be more likely to make deals with his funds if they know that he will make them a good deal rather than try to make the best deal for himself. His belief is that that strategy has a better chance of success, as he will get in on more good deals than someone who doesnt.

As long as he is open about that fact I see no problem. If you dont believe that is a good strategy you shouldnt invest with him. If you do, you should, in the same way that you should buy amazon stock if you believe in their strategy.

[lilsunnybee]

Running low margins in retail is often more of a really cutthroat business strategy, rather than simply trying to be nice to customers. You can easily run smaller competitors out of business, and increase your volume and overall profits, by making the competition unable to compete.

[001sky]

"Predatory pricing" has the name it has becuase its..not 'nice'

https://en.wikipedia.org/wiki/Predatory_pricing

[ZenPro]

It is also one of the easiest ways to bankrupt your own business.

Business Admin 101 - Approaches to combat Predatory Pricing.

http://www.fee.org/the_freeman/detail/herbert-dow-and-predat...

[001sky]

Predatory pricing is usually subsidized by unrelated but profitable lines of other business--which makes it sustainable (in that context).

[ZenPro]

Evidence?