All about Network Effects

Network effects. It’s one of the most important concepts for business in general and especially for tech businesses, as it’s the key dynamic behind many successful software-based companies. Understanding network effects not only helps build better products, but it helps build moats and protect software companies against competitors’ eating away at their margins.

Yet what IS a network effect? How do we untangle the nuances of … [ Read more ]

Marc Goedhart, Tim Koller, David Wessels

The guiding principle of business value creation is a refreshingly simple construct: companies that grow and earn a return on capital that exceeds their cost of capital create value.

Competing in a Digital World: Four Lessons from the Software Industry

Software is becoming critical for almost every company’s performance. Executives should ask what they can learn from business models employed by software providers themselves—and consider the implications for their IT function.

Clayton M. Christensen and Mark Johnson

The term “business model” often describes the profit formula used by the company to generate its income. However, we have seen fit to increase the scope of the term business model beyond profit model to include how the company delivers value to the customer and, subsequently, how the company organizes resources and processes to support both its profit model and customer value propositions. External interactions … [ Read more ]