| A lot of mixing business solutions with models. I have a meta-model I use to determine the mechanism of how a given company makes money. Simplest is the service model. Most complex is arbitrage. There are 3 in between. Variables are the scaling factors. Question isn't "how does it make money," but rather, "of possible transaction types how must it make money and how do its factors scale?" There is a short list of ways it must, and then finite factors of how it scales. Most clever to me is Renaissance Technologies who appear mainly to be an arbitrage factory. Ad-tech markets are closely related. Clever in the sense that their business is about buying clever and applying it to a limited class of increasingly esoteric arbitrage problems. From what I can tell, investment banks are essentially institutional casinos where you take a set of street level hustles and conceptually walk them back until they fit into a regulatory framework. Beating that game would be a lot of fun. Market makers like uber, airbnb, ebay and AMZN are the next smartest. A company like sharetribe is a good example of smart market making, I hope they do well. FANG companies are essentially publishers, and their business is about demographic pandering and selling viewers to advertisers/marketers. The other categories have different structure. Separating the business model from the problem and solution gives insight into just how clever they really are. |