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The birth of business models

17 March 2010

The term business model only really entered the mainstream in the 1990s, when so many unfamiliar ones emerged. Earlier inventors of revolutionary models like Henry Ford (mass production) and Frank McNamara (credit cards) just thought they had come up with a good business idea. Now business model innovation is analysed by academics […]

Winners and prizes

21 February 2010

I discussed last week how different combinations of network effects and positive feedback loops have enabled a few winners to take something close to all the prizes in some markets. But we should beware of being deterministic and over-schematic about this – each case is different. Microsoft and eBay established effective monopolies […]

The Network Effect

February 11, 2010

The Economist recently published a special report on social networking, which attributed Facebook’s extraordinary growth to ‘the network effect’. This is more or less true but the writer is conflating two different phenomena: network effects, a concept drawn from economics, and positive feedback loops, from the world of engineering. It is their […]

Just too big

30 November 2009

You’d think it was abundantly clear by now that banks that are too big to fail are just too big. Bankers tend not to agree.

Anyone else still doubtful should read the analyses of Willem Buiter, Martin Wolf, John Kay and Gillian Tett. Simon Johnson, the former chief economist at the IMF […]

The free lunch

15 November 2009

The sharpest comments I’ve seen on Rupert Murdoch’s latest pronouncement were from Cory Doctorow on BoingBoing and John Gapper in the Financial Times. (In an interview, which is available on BoingBoing, Murdoch said that he planned to charge for the content on News Corp web sites, and that he might even bar […]

Is creative destruction the culprit?

2 November 2009

Much has happened since December 2008 when I made the final revisions to Winners and Losers. Capitalism has survived its worst crisis since the 1930s, though confidence in free markets has crumbled. Keynesian solutions have played a major part in averting another depression, while the reputation of Schumpeter may have suffered. If […]