I know all of you are very passionate about the One and eagerly awaiting its release—and I am too—but here are three reasons why I think OnePlus is likely to fail as a startup.
You may have the best products, the snazziest features, and the most loyal fans out there—but you won't sell a single unit if nobody knows they exist. In the video below, you'll see that a software company spends around 15-20% on research and development, and a larger 30-40% on sales and marketing. This, compared to OnePlus' 0% on sales and marketing, doesn't seem like a wise choice. Think of all the product recommendations people have made for you. Now think of all the companies that you know. If every business relied on word-of-mouth, we'd all know a small fraction of the companies we know about now.
OnePlus has chosen quite a unique business model, one that relies on "Word of mouth," as Pete Lau calls it. This may sound OK on paper to some of you, but we've seen that this is not a functioning business model. Companies like
Monoprice are praised for their quality products, but they do not make as many sales as companies that spend more on marketing while offering inferior products. The Apple iPhone—shamed by most of the tech community for being lower quality while costing more—is one of the most successful handsets on the market today. We have seen that the quality of the product you're selling has smaller impact on sales and revenue than marketing.
As formally revealed in
one of Carl's posts, OnePlus does not plan to generate any revenue for two years. This means that, after two years, OnePlus will need to cut corners somewhere. If the One wasn't manufactured with top-of-the-line hardware, would you still buy it?
What's convinced most to buy the One is its value, and as we can see in
this thread, very few people would buy the One at a higher price.
hank you all for reading my post. I would like to clarify that I am
not against OnePlus in any way, and I will absolutely be purchasing the One in June.
