What Is Your Surplus Leader Margin?

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There is this concept that we call surplus leader margin, which is the maximum price you can charge more than your competitor while still maintaining your competitive position. That number is dependent on the differential scale you have against the other platform. Oncperners do it because when you see such a so large greenfield you can penetrate, you should grab that and sacrifice short term margin for a larger market share. And dial up the tune when it's the right time.

We sit down once again with one of the world’s very best strategy thinkers, 7 Powers author Hamilton Helmer — this time joined by his impressive Strategy Capital colleague Chenyi Shi — to discuss platform businesses, and how the Power framework applies to them. If you’re building, investing in, or just curious about the dynamics of platforms, this episode is a must-listen. We owe a huge thanks to Hamilton and Chenyi for sharing their work-in-progress insights on this very special category of companies. Tune in!

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