This might be too basic of a thought for some people, but to be honest, I'm not sure it's as simple as it seems. If you give me a few minutes of your time, I think you will see my point clearly too.
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I think the lot of us have seen at some point in time the charts that explain market dynamics. Yes, there's probably too many of them for me to cite them all and keep anyone engaged in this short post, but the point I'm making is this: We think we got this figured out by now.
How we got it backwards
It's often believed that the way the free market works is strictly by the dynamics of supply and demand. Which is to say that whatever product or service you may provide, the price for that product or service will be determined by those two factors. In practice however, this is rarely the case. Even more so because often markets are monopolized, and the idea of it being free is just an illusion being sold to us to keep our voices quiet.
Because I don't want to be abstract, or at least not excessively, allow me to use a concrete example:
Let's say I manage to develop a new form of vegan meat. This meat taste exactly like bacon and for all intents and purposes is just as magical.
Now, the simplistic way of imagining the price, the market value, is to imagine that I put the product out there, and then supply and demand just take over the system. But, is this really how we launch a new product?
Let's just put it out there, see where it goes? It's even comical to imagine it, and I'm not trying to be funny at all. So, How does the spark, the igniting spark for this "revolutionary" product to be successful get lit? The not so obvious, yet obvious answer: The Price.
Price it too high, nobody will dare to gamble trying it. Price it too low, people might not trust the quality. This is not even taking into consideration costs of production, that side of the equation is completely being ignored by me at the moment.
You see, the spark, the calculated ignition of any given market is the price of the product or service. Yes, you need marketing, yes you need logistics, but I'm not taking about any of that, I'm talking about the spark.
Ok, but why? Who cares?
Well my friends, if it's not obvious already. A big problem in this space begins at the spark. Is the price, the cost, the barrier for entry too high? Is it too low? Are we igniting it to allow the "free market" (as free as it can be, I guess) to truly take over and work it's magic?
So yeah, maybe we should care. As a matter of fact I suspect that to those among us who do most of the heavy mental lifting, this is pivotal. Even if they've thought of it from a different angle.
MenO
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