the most important thing I learned, and which I used in both Viaweb and Y Combinator, is that the low end eats the high end: that it’s good to be the “entry level” option, even though that will be less prestigious, because if you’re not, someone else will be, and will squash you against the ceiling. Which in turn means that prestige is a danger sign.
He worked at Interleaf, which produced high-end publishing software. I think that if A serves the high end of the market and B serves the low end of the market, if one of them takes over the other’s market, it is more likely that B will move into the high end.
But prestige brands still have value.
Pointer from Tyler Cowen. Reading Graham’s whole essay is worth your time.