On commoditizing your complements — one of the most important strategy concepts in tech.
Key Insight
When an economist considers price, they consider the total price, including some intangible things like the time it takes to set up, reeducate everyone, and convert existing processes. All the things that we like to call “total cost of ownership.”
The essay explains why companies strategically make things free — not out of generosity, but because reducing the cost of complements increases demand for your core product.
Why This Matters
Written in 2002, still explains modern tech strategy. Why does Google make Android free? Why does Amazon invest in AWS tooling? This is the framework.