YC Startup School: Lessons for a First-Time Founder

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There's something interesting in #2: if you look at the examples, AOL was the expensive choice, which won. Today, I see the same thing playing out with github(expensive) over bitbucket(cheap).

Selling expensive stuff makes you able to throw crazy money into marketing (so you can send cds to everybody and their cat). That marketing money will buy you the mindshare you need to win. Most of my friends use github. But nobody knows what/who bitbucket is.

In other words, even when network effects abound, cheap/free products may not beat expensive products with the right marketing.