Why Data Network Effects and Data Scale Aren’t Moats. Plus, More on Bundling. (260)

The Tech Strategy Podcast

This week’s podcast is about why bundling (and cross-selling and upselling) are so powerful in digital. Plus, some thoughts on why data moats are mostly not real.

You can listen to this podcast here, which has the slides and graphics mentioned. Also available at iTunes and Google Podcasts.

Here is the link to the TechMoat Consulting.

Here is the link to our Tech Tours.

Here is the article on bundling by Chris Dixon.

• How bundling benefits sellers and buyers

A lot of thinking on data as a moat comes from these articles by Martin Casado, Julian Wright and Andre Hagiu.

• The Empty Promise of Data Moats
• When Data Creates Competitive Advantage

Here are 7 complications I mentioned about bundling.

1. Bundling requires a a robust product suite.
2. You want a low attach rate. So you don't cannibalize products by bundling.
3. Bundling can complicate the customer experience and buying journey.
4. Bundling works best when all customers have similar total willingness to pay. But different tastes.
5. Unlimited bundles (subscriptions) can have problems if there are non-zero product costs.
6. Unlimited bundles (subscriptions) do limit revenue per user. This is a problem when willingness to pay is positively correlated with demand for variety.
7. Subscription models do not reward superstar creators very well.

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I am a consultant and keynote speaker on how to accelerate growth with improving customer experiences (CX) and digital moats.

I am a partner at TechMoat Consulting, a consulting firm specialized in how to increase growth with improved customer experiences (CX), personalization and other types of customer value. Get in touch here.

I am also author of the Moats and Marathons book series, a framework for building and measuring competitive advantages in digital businesses.

This content (articles, podcasts, website info) is not investment, legal or tax advice. The information and opinions from me and any guests may be incorrect. The numbers and information may be wrong. The views expressed may no longer be relevant or accurate. This is not investment advice. Investing is risky. Do your own research.

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