Economics for One

Prostitution, Drugs, Pornography, Gambling, and Religion

When I revamped Stanford’s program in Entrepreneurship in the early 1990s, I got to thinking about all the types of businesses people start.

As I thought about the various business models, I realized I could boil them down to some basic characteristics, mostly around what they were selling.  Some companies were based on people (e.g. services companies), some required large up-front investments, but had low marginal costs (such as software), and so forth.  I found that people who were good at one of these business models often had trouble understanding or working in the others.

The basic business models I identified could be loosely identified as:

  • Prostitution
  • Drugs
  • Pornography
  • Gambling
  • Religion

These are business models, and have nothing to do with the specific products or services being offered. Read more…

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