The article analyzes historical consumer tech cycles characterized by 'free-trial' eras where companies experimented with underpricing strategies to gain market share. From Kozmo's same-day delivery in 1999 to the rise of social media and Uber's subsidized rides, these cycles reveal a pattern of short-lived benefits for users alongside the eventual market dominance of a few entities. As the tech landscape shifts towards AI in 2025, echoes of these trends are appearing again, with the potential for unsustainable pricing models and strategic undercutting becoming commonplace in new technologies.
"Most free (and ad-free) social-media apps failed, but a few of them became so dominant that they can now add as much friction and advertising to their products as they want."
"Companies do this, and investors allow it, because it sometimes works. In the process, early adopters can reap small but real benefits from strategic underpricing."
Collection
[
|
...
]