Low Cost Provider is a good business model but only if you have a significant competitive advantage in cost.  Mature markets always compete on price until technology changes the game.

Better to compete on value.  Solve a big problem in a big market.  The iPod was not the first MP3 player.  Nor did it enter the market as the cheapest.  It cost $300 and in two years, it captured 92% market share.  It wasn’t perfect.  It didn’t have more features.  It had three things:

• 1,000 songs in your pocket
• Easy interface
• You could buy your favorite songs for a dollar

But it had one big thing… it was cool!

People like cool.  People paid for cool.  A lot of people.

Read “Duct Tape Marketing”  by John Jantsch