Smart Business Models for Smart Tangibles

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.

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Contents

This is an evolving list...

1. Economic Viability of Manufactured Goods

   
   

Can 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.

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2. The Cost of Capital

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.

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3. NPV: Profitability Assessment, Done Right

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.

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