Ask HN: Copy & Undercut. Should I do this?

One way to compete on price is to find something you could replicate, take their price and quadruple it. By charging 4 times as much, you can spend a lot more on marketing. Sure you'll lose some sales to people who price shop, but that's a small part of the market. It's possible that with four times the marketing budget you could bring in more than four times the number of customers of your competition. I don't know.

This might work best where your primary value add is repackaging a scalable service that is mostly offered by others.

Maybe you could copy patio11's appointment reminder service, only charge four times as much. There are a lot of businesses in the USA that take appointments... with the higher margins, maybe you can afford to send every one of them a nice packet of information.

The approach I take, though, is to do something original. Even if others have done it (and others are trying what we're trying, but nobodies really been successful) I expect we'll do ok because the opportunity is huge and there aren't that many others doing it.

But even still, I wouldn't be doing it if I didn't think that I had a really compelling competitive advantage. If the others weren't totally screwing up the opportunity, I'd be a lot less interested.

I think github is NOT screwing up their opportunity, and so that might not be a business to try and compete with... but there are lots of ideas... just find something where you can do it better than anyone else, or where you think you have a compelling advantage.... that would be the idea to pursue.

Maybe charing four times as much would give you a compelling advantage in marketing, I don't know. But that's the kind of price competition I'd go for.... otherwise, have your own spin and then use that difference to find the part of (a preferably very large) market to get for yourself.

1. If someone is already charging for it and they have customers, they've already done the hard work. Now you can copy them.

2. You need to solve a problem better than anyone else. There are lots of cars, but people buy a partiuclar one because it moves heavy things better, or impresses the mother in law more, etc.

3. You should pick a problem that really sucks and charge more for it. I'm sure there is a specialized case you can solve for related to repo hosting. Solve that really well and people will gladly pay more for it than github.

Think about the population of big internet sites (google, fb, etc) there will ever be. There are countless of these sites that have yet to be created as of today. Therefore, there's plenty of opportunity.

One of the mistakes I made early on when participating on HN was giving a shit about what folks here thought about my startup ideas. Funny thing -- I didn't even realize it. I would just suggest something, somebody would trash it, and I would move on without working on the idea some more. Unknown to me, I was letting popular hacker opinion be some kind of gatekeeper to what I wanted to spend my time on.

To your point, don't do this. If other engineers like the idea -- building some new toolset or creating the 4000th version of an online scrum tool -- run away from it. Run far, far away.

I had a cousin who was always trying get-rich-quick ideas. One year it was zero-down real-estate. Then it was investing. Then it was MLM. Then it was something else. He read some books, get jazzed up, and work as hard as he could. But, of course, none of it ever worked out.

One day I was speaking to him on the phone and he was very excited. Yet again. I kind of sighed inwardly, but then he described to me how he was going to make a renewable power product -- how the cost per material had a significant differential, how he had contacts in the import business, how the fabrication could be done at a small improvement -- all nickel and dime, small percentage, boring stuff. You know, distribution channels, marketing, production models, etc.

It was then I knew my cousin was finally going to make it. He graduated from dealing with all the emotions around startups to actually working the mundane, small, detailed problems that really make a business hum. There won't be any books or seminars on how to create a renewable energy manufacturing business -- he's making up the book as he goes along. That's what real business building is about. Not about creating some cool new thing or solving world hunger. Of course, nothing wrong with chasing a dream -- as long as you don't delude yourself and know what the numbers say. The trick is graduating from "feel good" startups to actual, real, down-and-dirty, numbers-driven, boring startups.

Find and talk to target customers and try to discern what would meet their needs best. I've been trying to take Jason Cohen's number of 30 to heart...find 30 customers who would buy your product, or tweak your offering until you do. Don't ignore the competition entirely, but don't base what you do just on what is out there.