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April 19, 2009


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Andy Abramson

Good points Brad, except, declining market for advertising dollars, driving price down, with less desire for "may be our market" buying or tolerance.

Second, declining VC market means fewer dollars to play with and shorter cycles to show traction, delivery, conversion, cash flow, profitability path.

Brad Templeton

The problem is this. If you've got competition, it is likely the competition will offer their product for free, paid for out of investor's money. In this case they don't plan to give it away forever, but they do plan to get market dominance away from you. Even if their product is inferior to yours, if they are free and you cost money (with free samples) they are going to own the market.

If the product has any network effects (as most communications and social media products do) then you are doomed. You are left offering free too.

This even applies if you have no competitor, because if you show success charging money, you will attract a free competitor, perhaps an inferior one.

So what's your option?

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