I'm not an expert in this but I think that generally price is determined by what the upper limit of what the users are willing to pay and the lower limit of what the vendors are willing to charge. As a new software vendor it only makes sense to look at the price of similar software in your space. And is it really bad - how many would want to be a software vendor otherwise? I'm not saying that some physical products do not come with risk, but the article is mentioning water - what are the chances that a company selling water will have a product market fit problem? What are the chances that the app you have worked on for so long without getting paid for it will not net more than a day job would 2 years after launch?
And Google, Facebook - they are something entirely different, they have a monopoly on their ad machine so they can charge whatever they want - and give something back in R&D in exchange - a company that struggles to keep its lights on can't innovate much (Zero to One is a nice take on this). For the latter, I'm not saying it is good or bad, it has benefits and drawbacks and it's the way it is and it's certainly not limited to virtual products. The Train Monopoly Co in my country has made the tickets practically 2x as expensive in just 1 year and what can I do? They could increase the price even further and I would still be riding with them because there are no other options.
mckravchyk|2 years ago
And Google, Facebook - they are something entirely different, they have a monopoly on their ad machine so they can charge whatever they want - and give something back in R&D in exchange - a company that struggles to keep its lights on can't innovate much (Zero to One is a nice take on this). For the latter, I'm not saying it is good or bad, it has benefits and drawbacks and it's the way it is and it's certainly not limited to virtual products. The Train Monopoly Co in my country has made the tickets practically 2x as expensive in just 1 year and what can I do? They could increase the price even further and I would still be riding with them because there are no other options.