How to evaluate the upside and defensibility of marketplace businesses[A. Hagiu-HIC]

Marketplaces dominate the modern business landscape by leveraging powerful network effects-think Airbnb, Alibaba, Amazon, Coupang, Mercado Libre, Naver Shopping, Pinduoduo, YouTube, etc. As the number of users on one side of the marketplace grows-buyers, for example-the appeal to the other side-sellers-expands exponentially. This reinforcing cycle makes marketplaces attractive to entrepreneurs and investors alike: everyone wants to build or invest in the next Airbnb, Uber or Twitch. However, bui

2024.12.18 11:07

Why and How All Businesses Should Consider Turning Their Products into Platforms [Andrei Hagiu-HIC]

In the current digital era, businesses are constantly seeking ways to innovate, grow, and maintain a competitive edge. One increasingly popular strategy is transforming products into platforms. This approach involves expanding existing products and services to also enable interactions among customers or between customers and external third-parties. With some creative thinking and careful implementation, this strategy can generate new revenue streams and enhance competitive advantage via network

2024.09.19 11:38

When does generative AI create competitive advantage? [Andrei Hagiu-HIC]

Generative AI, which includes chatbots such as ChatGPT, have exploded over the past year.[AFP]Generative AI is a powerful tool that businesses can use to make their workers more productive and enhance their product offerings. While many companies are adopting generative AI initiatives, few are designing these initiatives to achieve sustainable competitive advantage. Whether generative AI is leveraged internally to improve productivity, or externally to improve the customer experience, or both, t

2024.07.17 11:10