Cyrus Tchahardehi’s Post

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Building the next-generation sleep clinic. Co-Founder at re:sleep

Free doesn’t always win A couple of weeks ago, I spoke to a startup founder who was down in the dumps after learning from his lead investor that a competitor was about to enter the market offering the same service he was offering... for free! I know just how horrible that feels. 😰 A couple of years ago, investors and friends alike were sending me news articles announcing that a competitor in the insomnia space was going to be offered for free on the NHS. "Game Over," many said. But that’s not how things really work! Apart from a few rare exceptions, people don’t use price as the sole proxy for choosing a product. Other factors matter too: service, support, speed, quality, ease of use, effort required... These are all very common choice criteria for people. 🥦 Some people prefer to pay thousands for Ozempic and Wegovy than dieting for free. 📧 People pay for Superhuman instead of using free email providers. 🏋️ Millions pay for a gym membership when they can exercise at home for free. 🚚 Some would rather pay for express delivery rather than get free standard delivery. 🚕 And of course, many of us take an Uber instead of walking. When the NHS started offering free insomnia therapy, we knew there was still a huge amount of people whose choice criteria were not led by price, and that with support, specialist help, and great personalisation, we could compete. And we were right… Despite the NHS offering a free app, in the last 12 months alone, we’ve had over 3,000 people join our paid insomnia therapy, demonstrating the value some people can place on comprehensive support and guidance. Look at what you’re offering and decide how you’re going to compete; determine on which criteria you can be "best in market"(make sure that it is a criterion that some of the market truly values), double down your efforts in aligning your offering, your messaging and go after that market segment. Of course, you need to make sure that it is a criterion that some of the market truly values) *But giving away something for free (a taster, education, a tool, an experience etc.) can be a great way to show the value you bring to the people you wish to serve. 😊

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