Why tech companies never price things according to what they really cost. This new strategy of entering the market at a loss and then cranking up prices is getting old.

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Anon1096 2 days ago | parent | next [-]

Nothing is priced according to what they really cost. Things are priced at what the market will bear based on supply and demand. You might as well ask this question for oil, iphones, bitcoin, restaurants, or housing the answer is all the same.

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gonzalohm 2 days ago | parent | next [-]

I have been paying the same for my Kagi subscription since the start

	▲	shlewis a day ago \| parent [-]
		Which is almost certainly less than how they really should be, according to what they (allegedly) cost. Various cost-saving measures have been discussed, including a separate Assistant plan. Again, it will be priced according to how much the market will deem fit, which is less than what it costs at the moment.

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dumberquestions a day ago | parent | prev [-]

Predatory pricing is a separate issue from supply and demand.

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partsch 2 days ago | parent | prev | next [-]

To attract users :)

The question is probably more: How can it be legal to offer a service without specifying exactly what you're getting?

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Levitating 2 days ago | parent | prev | next [-]

You can still find honest companies providing correctly priced services. Purelymail.com handles my email. There are many VPS hostars, cloud storage providers etc with honest pricing.

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KellyCriterion 2 days ago | parent | prev | next [-]

This is not limited to tech companies! Underpricing is a very often applied method to enter/grow/develop a market.

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cma 2 days ago | parent | prev [-]

When a new restaurant opens in a college town, there will often be things like an opening day where everyone with a student card gets a free taco or whatever. Cheaper than buying a physical ad at the football stadium, and targets the people that might end up eating there multiple times a week (developers bringing Claude to their companies) rather than a bunch of people just in town for the game (Claude TV ads).

The training data flywheel though was probably as or even more important at least as of whenever it was that they switched it to opt out instead of opt in on subsidized subscriptions.

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gonzalohm 2 days ago | parent [-]

Right, and while you are getting your free taco you can probably ask for a copy of the menu so you can know if you are able to afford it

One thing is offering free demos or discounted products for a short time and a different one is making your consumers believe that the current price is the long term price.

I just want transparency. Are they done increasing prices?

	▲	cma a day ago \| parent [-]
		> I just want transparency. Are they done increasing prices? The initial announcement said it would only be available to subscriptions for a few weeks. The extra usage they said was for a limited time, I think it was 50% extra and they now are reducing that by 17%, less reduction than they had said. Because it's a monthly plan they usually have given heads up of at least a month on stuff. The API prices outside of personal subscription have always been more. Personal subscriptions are likely there for data scraping of company codebases (when users don't opt out), and for spreading the product to then get picked up by businesses the users work at or other word of mouth for API prices which they have said are profitable.