Smart Business Models for Smart Tangibles
By Yoel Frischoff
Blending Goods and Services Economics
getting smart about unit economics
Rationale
This series, part of Smart Tangibles upcoming book, is about the underlying economic forces that drive users and buyers’ behavior - as well as vendors’ fortunes - in the space of smart tangibles: Things that think, interact, and communicate.
Production Economics, Cost accounting, and Managerial Accounting are well trodden concepts as they pertain to either physical goods or digital wares. However, successfully melding them together to crate smart business models for the sake of better value offering and extraction is a delicate balancing act.
It is this careful balancing act, though, that opens for extraordinarily lucrative opportunities, so we learned from smart tangible vendors, such as Apple or Tesla.
Contents
This is an evolving list…
- Economic Viability of Manufactured GoodsCan a product idea can turn into a sustainable business? Focusing on contribution margin and break-even quantity, we explore the fundamental economics behind a smart product’s viability.
We discuss two critical dimensions in product business models: time and risk. These shape the opportunity cost of capital - the value of the best alternative forgone.
How to evaluate smart product profitability using Net Present Value (NPV), a method that discounts future cash flows to reflect time and risk - essential for sound prioritization.
How Smart product open for long lasting relationships with customers, and for recurring revenues from 3rd parties, using their integrated platforms as distribution channels
