When facing competition, if a direct competitor enters the market and underprices you, engaging in a price war is not a winning strategy; instead, differentiate your product based on functionality or value.

If you're charging significantly less than competitors, you might be attracting customers who only want the cheapest option, leading to misleading data about your product's demand. Successful products often charge a premium rather than being cheaper than competitors, as they solve significant problems for customers who are willing to pay more for effective solutions.

Pricing implies value; if your price is lower than competitors, customers may perceive your product as less valuable.

Sometimes competitors have objectively better products, which can lead to founders losing users to those alternatives.

Don't undervalue your product; while it's okay to start with lower prices, avoid making it a habit as it can lead to long-term pricing issues.

Being cheaper than competitors is often a losing strategy. As AI models become more capable and affordable, differentiation through unique value propositions becomes increasingly important.

It's a dangerous mindset for founders to think they must beat their competitors to succeed, which distracts them from focusing on their own customers and product development.

Most startups are undercharging, and relying solely on lower prices as a differentiator is not a sustainable strategy.

If your price is higher than the value customers see in your product, they won't buy from you, so it's crucial to find the right balance.