A strong business needs more than a good product
An economic moat is a durable advantage that helps a company defend its value against competitors.
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Daily Business learning cards
Strategy, value & growth. Explore a short explanation, an everyday example and a question you can answer from memory.
The Business collection currently has 8 written cards. The daily app introduces written ideas and revisits earlier cards once the collection is complete. Source previews offer additional reading.
Some costs move with output
Variable costs change with activity; total fixed costs stay stable within a relevant range.
Profit is not cash in the bank
Profit and cash flow measure different things.
Break-even asks how many sales cover the basics
Break-even occurs when total revenue equals total costs.
A sale has to help pay the fixed costs
Contribution per unit is selling price minus variable cost per unit.
Start with the customer's problem
A value proposition explains a useful benefit for a particular customer.
A network can become more useful as it grows
A network effect occurs when participation changes value for other users.
The slowest stage can set the pace
A bottleneck constrains the throughput of a process.