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This chapter introduces the “end-state cost” framework to analyze business evolution. Traditional physical products have variable costs growing linearly O(n); digital products and shared infrastructure approximate constant cost O(1); platform economies compound O(1) with spatial replication and network effects, enabling exponential growth. This perspective allows companies to transcend linear thinking, identify marginal cost limits, and select optimal markets for sustained advantage.

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Terminal Cost—Understanding the Evolutionary Logic of Business

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  • 发表日期：

    2026年

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  • Shuai Li

摘要

This chapter introduces the “end-state cost” framework to analyze business evolution. Traditional physical products have variable costs growing linearly O(n); digital products and shared infrastructure approximate constant cost O(1); platform economies compound O(1) with spatial replication and network effects, enabling exponential growth. This perspective allows companies to transcend linear thinking, identify marginal cost limits, and select optimal markets for sustained advantage.