I have been reading Robert McLaws and commenting about his posts for a few days. I was generally commenting about his ComponentOne post and about how from his many posts and his company website how he appears to be a champion for lower prices components. And in many ways I am in agreement with him.
After 10 years in this business, his perspective is one I’ve found to emanate mostly from newer vendors. More established vendors don’t seem to have his same viewpoint.; And I think that is the nature of the beast. A newer vendor often has an ideology they want to pursue (it was true with me.) An established vendor is trying to protect their position and grow it. This is not about good-or-bad, right-or-wrong, moral-or-immoral, or ethical-or-unethical; it just is.
This phenomenon is almost exactly like those covered in The Innovator’s Dilemma. The author Clayton Christensen makes the point that companies are always trying to move "northeast" by which he refers to a graph of increasing margins over time. As challengers offer cheaper products, the natural response for incumbents is to increase features offered while attempting to maintain or increase margins.
Initially incumbents view challengers as unimportant because their products are "not as good" as the incumbents. However, if challengers execute well, their products become "good enough" for the incumbent’s former customers and the incumbents either loose market share or fail. The former challengers then become the new incumbents who then try to "go northeast." Soon the new incumbents are facing their own challengers, and the cycle begins anew. Ironically, knowledge of the phenomenon is far from sufficient to guard it. To understand why, read the book.
In a recent post Robert states (emphasis mine):
I feel that it just lends even more evident as to why it is so important that we really refine the support model, review the issues with products that cause the most support calls, and eliminate them, and adjust the pricing model so that we can afford to support our customers when problems arise.
To that I will say, with absolutely no disrespect to Robert:
Be careful or you will become what you most despise.