Why Didi Is Dominant But Still Unprofitable (Tech Strategy – Podcast 87)

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This week’s podcast is about Didi’s upcoming IPO. They have released their numbers and it shows market dominance but operating losses. This is my explanation for what is happening. And what their strategic plan means.

You can listen to this podcast here or at iTunesGoogle Podcasts and Himalaya.

Here is the key paragraph from Didi’s IPO filing:

How I breakdown:

  • Market size and/or growth
  • Competitive strength and defensibility
  • Unit economics

Questions for network effects:

  • Local vs. regional vs. international network effects?
  • Fast vs. slow network effects?
  • Degree vs. value of connections?
  • Minimum viable scale vs. asymptotic scale? What is congestion / saturation / degradation scale?
  • Linear vs. exponential growth at different scales?

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Related articles:

From the Concept Library, concepts for this article are:

  • Network Effects: Indirect
  • Economies of Scale: Purchasing Economies
  • 5 Forces: Substitutes
  • 5 Forces: Threat of New Entrants

From the Company Library, companies for this article are:

  • Didi
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I write, speak and consult about digital strategy and transformation.

My book Moats and Marathons details how to measure competitive advantage in digital businesses.

I also host Tech Strategy, a podcast and subscription newsletter on the strategies of the best digital companies in the US, China and Asia.

With my subscription newsletter, you will:

Get a deeper understanding of the strategies and business models of the best digital companies.

Get specific frameworks for measuring competitive advantage in digital businesses and for traditional businesses doing digital transformation.

Get an edge in predicting what is going to happen next and who is going to win.

Note: This content (articles, podcasts, website info) is not investment advice. The information and opinions from me and any guests may be incorrect. The numbers and information may be wrong. The views expressed may no longer be relevant or accurate. Investing is risky. Do your own research.

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