Tag Archives: freemium

How Digital Business Models are Truly Special – Implications of Low Marginal Cost

In my previous blog post I highlighted that digital business models have a fundamentally different cost structure than most traditional models – with a key difference being the low cost of revenue. Low cost of revenue in turn means low marginal cost, i.e. once everything is up and running, it doesn’t cost much more to serve additional customers.

Extremely low marginal cost has very interesting implications. Continue reading

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