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Competeing On Price
A VC:
I had lunch yesterday with a friend who is a running a growing startup business. He is the upstart in a two company market. The established company is starting to notice his company. And apparently the established company is “giving away” their service in certain situations in an attempt to stop the upstart from gaining market share.I’ve seen this reaction a lot. And it rarely works. First, customers are smart enough to realize that if they are getting something for free, its either not worth anything, or it’s a short term deal that is going to cost them a lot down the road.
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