Characteristics of successful monopolies


Every monopoly is unique, but they usually share some combination of: 

  • Proprietary technology: a good rule of thumb, proprietary technology must be at least 10 times better than its closest substitute in some important dimension to lead to a real monopolistic advantage.
  • Network effects: keep in mind that you’ll never reap network effects unless your product is valuable to its very first users when the network is necessarily small.
  • Economies of scale: A good startup should have the potential for great scale built into its first design.

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