Hi there everyone, TheRingMaster is back again with yet another Web 3.0 blog. Ever tried starting a business before? Yeah it's no joke.
A start-up is a very difficult thing to do no matter how good the product you're selling is. But the funny thing is, some of the already well established huge companies have made it even harder for any startup to thrive and succeed. They use manipulations of the system, secret deals with Government and the power they have to monopolize the business world.
One very interesting technique these huge organizations use is termed "Predatory Pricing" and it's a very manipulative tactics that in a way makes it next to impossible to have any start-up rise to compete with them. I believe Web 3.0 has a good enough solution to that problem and in today's blog I'll share my thoughts on it with you.
So What Is Predatory Pricing?
Did you know that companies like Amazon could sell some of their products so low that it makes them absolutely no profit , infact it comes at a loss for them? You might ask why would anyone want to sell a retail product way less than the whole sale price to a point of losing money?
Trust me it's not a discount strategy or philanthropic act, it's Predatory Pricing and the aim is one, to drive competitors, particularly start-ups, out of business by making it impossible for them to survive. If they sell the same product a startup is selling so cheap, all consumers will prefer that product for its affordability and will not give an ounce of attention to the startup's product. That way, the huge company remains in business monopolizing the entire industry for as long as they want to.
The sad part is that this strategy is not just going to affect startups but also the consumers in the long run. If these giant companies monopolize the industry, there will be no room for innovation as a result of competition and it's without a doubt that in the future they will raise prices extremely high to make up for the losses made with Predatory Pricing.
Predatory Pricing to some degree and in some jurisdictions is considered illegal because of its negative effect in the business sector. It is practiced by businesses that have more resources to spare or waste filled with greed and laziness to make great innovation. It's a one way ticket to monopolizing any business or brand.
The Rise Of Web 3.0 To Counteract Predatory Pricing
The one thing Web 3.0 does so well is to disrupt centralization and monopolization of systems, platforms, communities and businesses. Web 3.0 built on blockchain technology has decentralization as a great attribute which allows power to be distributed among users rather than being concentrated in a few big firms, individuals or groups. I believe Web 3.0 can solve the predatory pricing issue and this can be achieved through things like price transparency and data interoperability..
Let's look at a few ways Web 3.0 can solve this problem.
Decentralization and Distributed Power
The main reason Governments and Centralized organizations hate cryptocurrency, Blockchain and Web 3.0 so much is because of the power it takes from them. The moment we're able to incorporate or integrate Web 3.0 systems into the business market, it would be harder for Amazon to do what they're doing because they can't determine prices that would favor them at the expense of their customers. Power becomes spread out and so giving a better chance for start-ups.
- Just like on Hive we the people vote for witnesses and projects, we could vote for a standard price of any product meaning these huge companies won't be able to determine a price so low that the other start-ups or businesses can no longer compete.
More competition brings more innovation and it benefits the consumers or customers in the end.
Transparent Pricing Mechanisms
Like I mentioned earlier on, Predatory Pricing strategies are not exactly legal in some jurisdictions. Most of the companies that practice this do it secretively. Government or law enforcement agencies would find it difficult to detect activities like this. However Web 3.0 ensure transparency in all activities.
This will help eliminate secretive predatory pricing strategies by companies since all transactions are made public on blockchain networks.
Everything is exposed and that I believe is a very good thing. Startups and huge organizations can all have similar prices of the same product leaving the advantage to innovation. The better product will always be the winning product and in the end the consumers which is us, enjoy variety and quality.
Enhanced Consumer Choice
Decentralized communities or platforms always make things fair for developers involved. Take Hive for example, we have different communities like @ecency , @leofinance , @neoxian and @cent to list a few I really like. All these communities offer different values and we the users have the freedom to choose the one we want to engage in. This is entirely based on the advantages of the community, the value it offers its members and subjectively the niches members can post about.
For a community to grow in number of members it needs to be better as a platform, as a system and as a community to attract more people.
There's no extra advantage any community is running with besides the value it provides. So there's alternatives for members reducing dependence on few dominant players. This is what decentralization and Web 3.0 does.
So in the business realm, Web 3.0 integrated will bring about more options of businesses or brands for consumer. These businesses will compete in a leveled playing field and the only thing that would determine a successful business would be its innovation.
The increased competition Web 3.0 will bring is capable of driving prices down naturally without any need for predatory tactics. So in the end there'll be a wider range of products and services which we have freedom to choose. That's an absolute win for consumers.
Empowering Startups
There's a whole lot of unemployment happening in basically every country today. We need more jobs and the jobs come from business establishments. This means in order for us to have a brighter future, the startups need to be a lot and end up successful thriving businesses.
To avoid monopolization of business and less innovation, the competition between business brands needs to be higher. That's why startups should do well.
Thankfully, Web 3.0 can give startups tools that help them compete against established players.
You can't necessarily startup a business with just the idea, you would need the capital or funding for the business to start and run successfully. In addition, certain decentralized funding mechanisms such as initial Coin Offerings or ICOs for short and Decentralized Autonomous Organizations, DAOs can do a great job in helping the startups to raise funds without relying on traditional venture capital or bank loans.
- In my opinion Bank Loans would have been perfect if not for the conditions attached to it by some banks which are only interested in their own welfare rather than the well-being of businesses in the economy; asking exorbitant interest rates with very stringent security. It is also going to be heavily influenced by the government and this is bad for business start-ups at all costs.
I'll be talking more about Initial Coin Offerings in future blogs so definitely follow for more on this
Web 3.0 with its advantages brings financial independence. This kind of financial independence allows such businesses to not just survive but thrive even in markets with predatory pricing threats.
I always emphasize on the point that for Web 3.0 and Hive to succeed it solely depends on us the users. We need to do everything that is in our power to improve the platform and the technology. Developers are constantly working to make Web 3.0 more scalable and build better dApps to make it more useful. Its potential in all sectors of an economy is clear and the business market will be fairer and more innovative if we can successfully integrate Web 3.0.
Of course there will be challenges like having to defend against the fight that these organizations with so much power will bring to the growth or development of Web 3.0.
Yeah Amazon isn't exactly going to sit back and watch Web 3.0 take away their power so we certainly need to be ready for that. Also these giant organizations have the backing of the Government since they pay heavy sums of money in income taxes. The Government's War against Cryptocurrency and Blockchain is still on going but I strongly believe that in the end, Web 3.0 will thrive.
Thank you so much for taking the time to read this blog. As always I would love to get your feedback on the blog topic.
Let's Make Web 3.0 Great ✊