Startup Fail Reason #1: ‘Too hungry to eat’

Marc Andreessen (who is he) mentions in ‘Tools of Titans’ that it is important for Startups to ‘RAISE THEIR PRICES’ instead of lowering them to compete with the market.

“The number-one theme that companies have when they really struggle is they are not charging enough for their product. It has become conventional wisdom in Silicon Valley that the way to succeed is to price your product as low as possible, under the theory that if it’s low-priced, everybody can buy it, and that’s how you get to volume,” he said. “And we just see over and over and over again people failing with that, because they get into a problem called ‘too hungry to eat.’ They don’t charge enough for their product to be able to afford the sales and marketing required to actually get anybody to buy it. Is your product any good if people won’t pay more for it?”

I too learned the hard way (failing several times) that lowering prices for your product is not a permanent solution to create a successful and sustainable business. Logically people think if it’s cheaper more people will buy it. This might be the case BUT what you miss is that if less people would buy it for a higher price you would most probable make at least the same profit (mostly even more) and would even have more time to provide a better customer service!

You should price your product for the price it deserves. Not lower! And fcuk competition. Don’t race to the bottom. There is nothing down their except of failure.