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Comment by seanpackham | Hacker News Reader

Surely it depends on the problem being solved though? If I was making a new project management or source code hosting service I would have to think twice about charging the same or more than my competitors alternatively I need to compete on something other than price. Also if a you need a solution to problem X how can the price point be compared to an established company solving problem Y?

I'm curious, are you a developer?

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>if a you need a solution to problem X how can the price point be compared to an established company solving problem Y?

If problem X and problem Y both cost $25/month to solve, they should be roughly equal pain-wise. By starting at price point of $25/month, and working your way backwards to find problems, you should expect to be tackling Github- or Basecamp-sized problems.

>I'm curious, are you a developer?

Yes, I'm a developer/consultant.

I think that's non-sense. Just because X and Y cost the same to solve doesn't mean they are equal pain-wise. It doesn't take into account any of relevant factors like market size. I've seen a lot of services that are trivial in comparison charge a lot more because it's a much smaller market and/or the value of a very specific tool is worth far more for people in that niche.

If X and Y cost the same but do not solve the same amount of pain, one of them is underpriced.

X and Y can cost the same amount and solve different amounts of pain and both be priced accurately.

How?

Amount of Pain X Solves < Amount of Pain Y Solves

X solves a problem for a small market where the consumers are still find it worth $25 to solve the problem and have less options.

Y solves a massive problem that a lot of people have (big market). Prices have been driven to $25 by many competitors.

Different amounts of pain, different amounts of complexity, same price. Y's price has been driven down to 25 by competitive factors. X's price is higher because a lack of competitors. All this requires is that one is under-priced relative to value delivered but not to the market's competitive forces. Therefore neither is under priced given the reality of both sides of the market.

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