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> you can scale your product so cheaply and still save or increase productivity to justify high prices

You've just nailed an aspect of the software industry that I've never understood; if it's so easy to cheaply scale a product, then what's preventing a competitor from charging a bit less and beating your high price?

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Nothing, that's why VCs will invest an enormous sum to grow faster than the competition to become the dominate player. Once established and people are used to the product other companies will struggle to compete against it without doing so purely on a cost cutting model that they can't sustain against bigger players.

Problem for many companies is that they are in the middle of a constantly changing tech landscape and become obsoleted fairly quickly or try and use their size to artificially increase margins too much and allow for competitors to eat their market.

Regulatory capture. Network effects. Bundling. Anti-competitive practices. Data moats. Patents. Domain expertise.

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