If you can do the same thing for less money, that's just good business. If you're stealing someone's unique idea, that's still business, just not particularly moral.
Ask HN: Copy & Undercut. Should I do this?
11–20 of 34 posts
Re: Ask HN: Copy & Undercut. Should I do this?
#12What about a repository hosting service for non-source code related projects? Office workers don't use git, yet. >> I'm thinking of just copying other startups but charge less as a possible strategy. Is this a good idea? No. As others mentioned, existing startups will be better than you are at the same problem because they've been doing it longer. As a result they can always charge lower than you. What you can do is…
It's my understanding that dumping files in to dropbox (on a paid for account) can be set to retain all past versions. That seems like a pretty sensible way of keeping versions but of course without merge abilities and such.
Re: Ask HN: Copy & Undercut. Should I do this?
#13Sounds like you are looking at startups as if your job is to come up with some new idea. Don't do this. Your job is to provide something people want that you can scale. 99.99% of the time somebody will be able to point at what you are doing and say "That's already been done!" People who say this have no idea what they are talking about. A business is about a hell of a lot more than some unique, creative idea. In fact…
I think that's a fantastic way of thinking about it. Businesses don't win custom by doing totally unique things, but by doing common things in a way that is local/prettier/cheaper/easier/in a language you speak/on a device you own.
I think you've changed the way I'll look for "the idea". Not something new, but a problem I can solve, that people have and that scales, that other people like me don't want to touch.
One of the best comments I've read on HN, especially for stressing the complexity of why a product works. Thanks Daniel.
Re: Ask HN: Copy & Undercut. Should I do this?
#14>... charge less as a possible strategy. Is this a good idea?
Usually not. Competing on price is almost always a bad idea. There are two exceptions to this rule I can think of:
1. Your "knockoff target" is the only game in town and because of that they are able to charge a lot.
2. Their service is expensive to run because their infrastructure costs a lot (lots of servers, expensive proprietary app stack, ...) while you're able to run your service on significantly less expensive infrastructure.
The better approach is to see what their existing customers are bitching about. Where's the bitching there's a problem in need of a solution (and an opportunity to make money).
Re: Ask HN: Copy & Undercut. Should I do this?
#15We chose to enter a business that has been saturated since 1999. Why? Because it was quite clear that most of the companies in the space were doing it wrong and inefficiently. We identified plenty of things that we could do better, and we executed on those things.
It's fairy straightforward to find a niche where the incumbents are operating sub-optimally.
Re: Ask HN: Copy & Undercut. Should I do this?
#16Attitude is everything.
Read Henry Ford's autobiography: http://www.gutenberg.org/ebooks/7213
Re: Ask HN: Copy & Undercut. Should I do this?
#17> Every viable web startup idea that I can think of has already been done by other startups who have been there many years before.
You aren't looking hard enough. At work, about once a week we come up with another perfectly viable startup idea. We're already working on one, though, so we file those away just in case.
You're probably looking in the wrong place. You could be mainly looking at existing companies, which of course means you won't think of anything new. Or you could be paying attention mainly to the obvious parts of yourself. But since people like us make startups, the obvious things we need are already covered.
Instead, go look at other people. Really look. Be an anthropologist at the ballpark, a psychologist at the coffee shop, a sociologist at the grocery store, a short-story writer at the bar. Look at the problems people really have and ask: could I build something that would help?
If you think the answer is yes, go pick up something like "The Entrepreneur's Guide to Customer Development", or go do a Lean Startup Machine weekend. Learn how to test your ideas before you write code. When you find an idea you can't kill without building it (and find it you will) then go build it.
Re: Ask HN: Copy & Undercut. Should I do this?
#18Well, obviously I think so. Especially in the infrastructure industry, starting with very low prices and slowly working your way up the food chain is essentially how it's done. It's easy in the computer-infrastructure market, too; you simply don't lower your prices as fast as moore's law lowers your hardware costs.
I mean, you also need to think about your market and what they care about. It is a given, I think, that if you are breaking into an established market, you will be forced to accept lower margin than the established competition. But some markets? lowering the price won't help you. In those markets, don't lower your price, but spend a larger percentage of your revenues on sales or advertising. In some markets, like say contracting to 'enterprise' customers, it makes sense to actually charge more and give most of that to a middleman; I've never been able to get as much money directly renting myself out as I could going through a middleman, even after you take out the middleman's cut. Large corporations are more concerned about following the procedures than saving 50%. On the other hand, small companies? they'll switch providers for a 10% discount sometimes. Individuals paying with post-tax money can be even tighter than small companies. So know your market, and know if spending more on sales/marketing makes more sense or if firing the salesman and knocking his commission off the price will sell you more.
Another thing; Even if you provide the same service as the existing player, if your prices are significantly lower, you will probably be targeting a different market. I mean, I steal some customers from slicehost, but I think most of those are older customers who joined up when slicehost was small and cheaper. These days, really, I doubt there is a lot of overlap between the sort of people who would consider slicehost and the sort of people who would consider me.
Really, I think the slicehost example is a good one; back in the day, Slicehost was seen as the only player (marketing failure, I think, on Linode's part, mostly, if I'm remembering the timeline right. Linode was UML a long time ago, which is really a different product, but I think Linode was Xen by the time Slicehost hit the market. At the time, I was also selling Xen VPSs, but I was in no way a serious player.) So, there were a lot of people on Slicehost who switched to Linode or to me as time went on, as they were individuals or small companies.
But large companies? they want the big name, and barring a buyout, Linode and I can't give them that. (Linode is earning a reputation on their own, which is great for them, and really, for me too, because they have no reason to lower their prices as fast as they would otherwise. But they are a long ways from having the name that rackspace has.)
I was doing some consulting the other day for a friend who works for a very large company. They are paying rather a lot for dog-slow OpenVZ VPSs provided by Verio. They could have gotten a better deal almost anywhere, but they had the relationship with Verio.
Re: Ask HN: Copy & Undercut. Should I do this?
#19Entrepreneurs shouldn't be building things for the sake of making money. If you're an entrepreneur, it's your job to solve real problems that people have. It's never about you. It's always about the people you're serving.
No idea why you got downvoted; I think that's the most essential truth of entrepreneurship.
Re: Ask HN: Copy & Undercut. Should I do this?
#20If the best you can do is to copy and price (undercut) then someone will no doubt return the favor. It's an ugly race to the bottom.
There's always someone willing to do the work for less.
It's always, 100% unsustainable.
Why do more work for less $$?
Compete on ANYTHING but price.
Here's an idea. Find some product/service you really like, even promote it, and learn it inside and out. Find ways to do it better or perhaps there's a sub-market that needs more product/service in exchange for more $$.
I've paid consultants to do the work for me that I could not and/or would not do myself. I paid much more than it would have cost me to learn it myself. My time is worth more than learning new software.
In the end, even though I paid more, I received much more value in exchange for a trade-off of my time.