Berkshire Hathaway Part II
Acquired
Float and Network Effects in Business
A business with float involves selling stamps to stores in advance, which are then given out to customers over time to incentivize purchases. The store pays the stamp company for the stamps, customers redeem the stamps, and there is breakage over time, similar to an insurance company's concept. Additionally, the business benefits from two-sided network effects, where more stores using a particular stamp system attract more consumers looking to redeem stamps for rewards, creating a mutually reinforcing cycle.
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