These days, we’re hyper-focused on marketplaces, communities and social platforms. We love these platforms for many reasons, but the primary one is the power of their network effects and how they create a high degree of defensibility for startups. What are network effects? “Network effects” is a frequently used term…

The virtuous cycle is the holy grail for online marketplaces. In this positive feedback loop, a high number of quality suppliers attract more customers; then more customers attract more suppliers to join. This cycle continues as a self-sustaining growth engine until both supply and demand reach critical mass to be…

When we look at investment opportunities, we need to consider the type of market that the potential investment is in. How much room is there for a market leader or leaders? Is it winner-takes-it-all or winner-takes-almost-all? Is there room for multiple potential winners? Winner takes all These markets are driven…

Creating effective barriers to entry can be the single most important driver defining the profit potential of a company. In today’s B2B and B2C web markets, barrier to entry boils down to one thing: demand-side benefits of scale. To be successful, every web start-up needs to be thinking about how…

“Traction is the new IP” sums up perfectly how the technology space has evolved over the past decade due to the nature of the web. Barriers to entry are no longer created by patents or by tech differentiation alone, but by superior traction in the marketplace. In today’s web landscape,…