Netflix, Spotify, Airbnb: how investors might approach the modern breed of companies

16.05.2019 10:55 - Schroder Investment Management (Switzerland) AG (LUX & CH)

Netflix, Spotify, Airbnb: how investors might approach the modern breed of companies

Not all network-building platforms are created equal; investors should beware that their business models vary wildly in terms of their viability.

When Facebook was in its infancy and only used by a small group of Harvard college students, its value was relatively limited. As it took off, spreading across US campuses and out into the wider world, its usefulness grew exponentially. The more people that created accounts, the more indispensable an account became, leading people to sign up en masse.

This is known as a “network effect”. And everyone wants one.

Read the full report here:

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