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Network Effects Aren't Enough
Hagiu, Andrei; Rothman, SimonArticle HBS-R1604D-EEntrepreneurshipIn many ways, online marketplaces are the perfect business model. Since they facilitate transactions between independent suppliers and customers rather than take possession of and responsibility for the products or services in question, they have inherently low cost structures and fat gross margins. They are highly defensible once established, owing to network effects. Yet online marketplaces remain extremely difficult to build, say Andrei Hagiu ...Starting at €8.20