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independence7 unconnected · 1 more author in those circles
standing

contested · 6 claims against 3

applies to

b2b, no audience needed

this one failed

confidence

high

evidence

10 claims · 10 articles · 4 receipts

window

2010-04-12 → 2026-07-21

7 builders who never spoke to each other · contested

Undercutting alone is not a position

Post mortems of failed companies keep landing on the same cause: a price promised before anyone knew where the saving came from, which then had to be withdrawn in front of customers, or an order of magnitude discount that the incumbent simply outspent. Cheap and disappointing also sours buyers on a whole category, and a funded rival can decide not to make money at all and give away what you charge for. The workable version is being the affordable option that carries most of what the expensive one does, with the cost base to sustain it.

What both sides agree on

  • Expect later entrants to copy your pricing, positioning and marketing outright, because your public mistakes are free research for them.

Where this splits

Failory's post mortems and Kogan treat price undercutting as a position that collapses, while Cohen, Steckel and Osler describe deliberately cheap products that held their market.

  1. side 01 · 6 claims

    Undercutting collapses, you cannot sustain the promised saving

    Alex Hillman · Failory · Greg Kogan · Pieter Levels · Preetam Nath

    1. 1Do not promise a lower price than the incumbents until you can show where the saving comes from. An unsustainable price is a promise you withdraw in front of your customers.
    2. 2Undercutting the incumbent by an order of magnitude is not by itself a position. The incumbent can buy the established players and out launch you while you are still explaining the price.
    3. 3If a group of you is pushing a category together, win the buyer on quality and not by undercutting to get distributors interested, because a cheap and disappointing first impression sours an entire generation of buyers on the category.
    4. 4Do not plan to win on price against a platform vendor whose product exists to drive compute and storage consumption and can therefore be sold at or below cost.
    5. 5Price in the risk that a funded competitor chooses not to make money and gives away what you charge for, which can make your offer redundant overnight.

  2. side 02 · 3 claims

    Be the affordable option carrying most of the features

    Jason Cohen · Mark Steckel · Turner Osler

    1. 1Compete as the affordable option carrying most of what the expensive incumbents offer, which is a workable position even against far larger rivals.
    2. 2Price flat with no contract and publish a guaranteed floor for performance when the incumbent's pricing is high and its delivery inconsistent.
    3. 3Set the price to maximise how many people adopt the idea rather than to earn a margin, and let falling production costs create the profit later.

What it returned

  • $2

    Katerra pitched cutting the cost of construction projects, struggled to create real value for clients and could not make the lower prices it had promised sustainable, with about $2 billion invested over its lifetime.

  • $13M

    MatterFab's metal 3D printers were meant to cost about a tenth of a standard machine. The company raised over $13M, burned more than half a million a month during 2016, and closed while GE was acquiring Concept Laser and Arcam and preparing its own largest ever metal printer.

  • Post-apartheid South African wine chased US importers on very low cost while shipping poor quality, and the backlash left buyers who would pick almost any other origin first.

  • Founders of a later competitor told Cohen they set their prices by copying WP Engine's, assuming the testing had already been done.

Sources

the second source

Three plays a week, for the phase you are in

No roundup of links, no news. Three tactics more than one builder arrived at separately, with the numbers each one returned and the disagreements left in.

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More in pricing

all pricing plays

the second source

Three plays a week, for the phase you are in

No roundup of links, no news. Three tactics more than one builder arrived at separately, with the numbers each one returned and the disagreements left in.

963 corroborated plays to draw from · 3 a week

One email a week. Unsubscribe in one click, and the address is used for this and nothing else.