>If it was $10, no one would buy it and if it was $0.01, they'd run out of supply. //
Do you think? Milk is a pretty much fixed use rate for homes I feel - low cost milk is probably more a loss-leader than anything else. If there's a crisis in the dairy industry those who can afford to pay $10 probably will for quite a time. The reason my supermarket doesn't charge more is competition. Milk is fungible, largely, hence competition plays a more important role [we buy Organic milk wherever possible however]. Most tech isn't so fungible.
I guess how that feeds in to your valuation analysis is that USP is important? Even if your business amounts to just another messaging app, or another photo app, you can have a USP - like Whatsapp's user base?
... if milk were 1¢ I'd take up cheese making; cheese is so expensive.
Do you think? Milk is a pretty much fixed use rate for homes I feel - low cost milk is probably more a loss-leader than anything else. If there's a crisis in the dairy industry those who can afford to pay $10 probably will for quite a time. The reason my supermarket doesn't charge more is competition. Milk is fungible, largely, hence competition plays a more important role [we buy Organic milk wherever possible however]. Most tech isn't so fungible.
I guess how that feeds in to your valuation analysis is that USP is important? Even if your business amounts to just another messaging app, or another photo app, you can have a USP - like Whatsapp's user base?
... if milk were 1¢ I'd take up cheese making; cheese is so expensive.