Switching Costs

Customers would lose value moving to a rival for the next purchase.

The core idea

Customers would lose value moving to a rival for the next purchase.

Per-unit cost falls as you grow; rivals can't match your cost without your share

Each user makes the product more valuable to other users.

A new model incumbents won't copy because it would damage their business.

Customers pay more for an identical offering because of who you are.

Preferential access to a coveted asset — patent, person, deal, deposit.

Routines that deliver lower cost or better product, copyable only over years.