Zero Marginal Cost Advantage
Part 1: Cloud LGS is an investor’s dream. And this is why...

What is Zero Marginal Cost?
The cost to serve one additional customer is basically zero.

Businesses often fall under 1 of 2 categories:
Platform business models are the next wave of billion dollar companies.
Watch this video to learn more about monopolies of the 21st Century.

The easiest way to explain the 2:
  1. A linear business model has increased costs when there is increased demand for their product or service. 
  2. A platform business model often has zero marginal cost when there is increased demand for its product or service.
linear business model vs platform business model

Why do linear business models have increased cost with increased demand?
Linear business models often create a product or service for distribution. There is a cost associated for the product, production, and distribution. As demand for product grows, so does cost of business.

Why do platform business models have near zero marginal cost?
Platform business models facilitate the exchange of value between two or more user groups, typically a consumer and a producer. One of the most powerful aspects of platform business models is their ability to scale without increasing costs. The cost to serve one additional customer is basically zero.

Why Platforms Scale Better than Linear Businesses:
To understand how platform business models scale, we need to start with the economics. To create a mobile app, it might cost $250,000 to produce the original version, but creating a copy of that app for user #2 will cost next to nothing. In the language of economics, the app has near-zero marginal cost.

Amazon is a Unicorn

Amazon is a Unicorn and this is why:
Amazon has combined it's platform business model with it's linear business model. 

Amazon linear business model vs. Amazon platform business model:
Read below to learn how Amazon leverages both and see how other companies are benefiting from their platform models too. These are real examples of platform businesses with zero marginal cost advantages. Coincidentally these businesses have achieved unicorn status.

Amazon’s Platform business model:
Amazon has built an online platform for others to buy, sell and distribute product. Adding products, buyers and sellers to the Amazon platform is an example of zero marginal cost. Amazon accrues almost zero cost to add buyers, sellers and products to it's platform.

More than 80% of all items listed on Amazon are from third-party sellers. Meaning Amazon’s online marketplace acts as a platform facilitating the exchange between two or more user groups, typically a consumer and a producer.

Amazon’s Linear business model:
Amazon builds and operates numerous distribution facilities for both offline and online commerce. Each facility is equipped with personnel, inventory and machinery. As demand for Amazon’s business offerings increase so does their operational costs.

Amazon fulfillment services allow sellers to house their inventory in Amazon warehouses and let Amazon handle shipping when a customer places an order. Sellers are charged a fulfillment fee per item and monthly inventory storage cost for each item stored in an Amazon warehouse.

Hyatt & Hilton's Linear business models

Hyatt & Hilton's Linear business models:
If Hyatt wants to add rooms, it needs to build more hotels, or as Hilton did, it needs to acquire them at great cost. By comparison, Airbnb is almost worth more than Hilton and Hyatt ($6.87 billion) combined ($30.2 billion).

Airbnb’s Platform business model

Airbnb’s Platform business model:
When Airbnb wants to add more rooms, it just needs someone to create a new listing on its website. This costs the platform next to nothing. It doesn’t have to build rooms or acquire companies – it needs to acquire users. Airbnb has been valued at $31 billion.

Uber & Lyft Platform business models

Uber & Lyft Platform business models:
Consider Uber & Lyft vs. traditional taxi companies. For a traditional taxi company to add another taxi to its fleet, a car and licence need to be acquired at significant cost. Instead of shouldering that setup cost, Uber can add another taxi to its inventory at almost no cost by enabling people to share their existing cars, all coordinated via the internet.

Google's Platform business model

Google's Platform business model:
Google operates what might be the world’s most profitable platform business model. In 2013 Google introduced it’s proprietary platform called Google Adwords. Google AdWords is an online advertising service developed by Google, where advertisers pay to display brief advertising copy, product listings, and video content within the Google ad network to web users.

Today Google makes well over $100 million per day from this platform business model. Google’s cost to deliver ads is a zero marginal cost model. But everytime these ads are clicked Google makes money. 

Yelp's Platform business model

Yelp's Platform business model: is another example of a zero marginal cost business model. Yelp is a website and mobile app that connects people with local businesses. Today Yelp is valued at over $3 billion dollars. Yelp is able to add new customers to its platform at zero marginal cost.

Wikipedia’s platform business model

Wikipedia’s platform business model:
Wikipedia is another great example. It’s a nonprofit and it’s free to use, but it still serves hundreds of millions of users every month. Wikipedia is valued at $12.8 billion.

How did Wikipedia pull this off?
By creating a platform business.

A successful platform has close to zero marginal cost, while thanks to network effects, the value it delivers continues to grow as more users join its ecosystem.

Rather than employing professional curators and writers, Wikipedia built a platform with an ecosystem of external producers and consumers who created, policed and used its content. As Wikipedia grew, it was able to overcome Encyclopedia Britannica’s usership at only a fraction of the cost. Wikipedia is able to add or change information, and expand its audience at zero marginal cost.

Platform business models are not a trend.
They are becoming the normal.

Physical assets and employees don’t scale well.
Platforms do.

For platforms, the nature of networked growth and the low marginal cost of production means that expenses typically don’t grow as fast as revenue does. The costs of a linear business will always continue to rise as it grows, while the costs of a platform’s growth tend to level off logarithmically.

In the twenty-first century, the supply chain is no longer the central aggregator of business value. What a company owns matters less than what it can connect.

Cloud LGS Growth Fundamentals

Part 2: Cloud LGS is an investor’s dream. And this is why...

Cloud LGS Growth Fundamentals.

Cloud LGS Collective Growth Hacks:
The path to Cloud LGS unicorn status is largely attributed to it's collection of 21st century business strategies. Cloud LGS fits the unicorn pedigree because its a platform business model with multiple zero marginal cost revenue streams.

How Does Cloud LGS Relate with the Internet’s Billion Dollar Unicorns?
Before we dive into the comparison’s let’s first explain what Cloud LGS is.

  • Cloud LGS is online marketing platform.
  • Our proprietary software creates marketing tools and websites to fit any device size.
  • Additionally Cloud LGS serves as an educational platform.
  • Providing continued education is a growth hack to create more long term loyalty.

Cloud LGS’s Platform business model:
Cloud LGS has built an online platform for others to create, buy or sell websites and other online marketing tools. Similar to Amazon, adding websites, customers, and users to the Cloud LGS platform has almost zero marginal cost.

Cloud LGS industry unicorn

How Does Cloud LGS become a Unicorn?
As Cloud LGS approaches mass user adoption it's zero marginal cost platform model provides massive revenue opportunities. Mass user adoption can be achieved through increased product awareness. 

Similar to Amazon Cloud LGS has Linear Growth Capabilities:
The Cloud LGS zero marginal cost growth model organically creates linear growth opportunities too. As more users are added opportunities for physical assets will present themselves.

Cloud LGS Linear Growth Assets:
The opportunity to acquire real estate becomes a potential growth hack for Cloud LGS. Business types such as cellular phone carriers, fitness centers, coffee houses, and banks, are on every corner in populated areas. As entrepreneurship continues to become the normal, Cloud LGS marketing hubs could become part of this ecosystem.

McDonald’s Growth Hack

McDonald’s Growth Hack:
Similar to McDonald’s early stage growth hack of acquiring real estate to facilitate the growth of more McDonald’s locations, Cloud LGS could potentially stimulate the same opportunities. Cloud LGS could acquire both residential and commercial real estate assets to stimulate growth and massive Cloud LGS evaluations.

Cloud LGS Marketing Hubs

Cloud LGS Marketing Hubs:
Local 1 on 1 assistance could become a growth hack advantage. Local marketing hubs act as growth centers for Cloud LGS users and customers. Visiting a local Cloud LGS marketing hub creates the opportunity to connect with other like-minded people.

This level of access to other Cloud LGS users helps create strong culture resulting in increased customer loyalty. 

The End of Bad Customer Service:
Instead of waiting on hold to experience high customer frustration, make a stop at your local marketing hub to receive 1 on 1 in-person support at little to zero cost to the customer. Apple has mastered this with their local in-store genius bars.

Apple’s secret weapon: Incredible customer service
Apple elevated customer service into a science. Today, the company stands shoulders above the competition when it comes to alleviating the stresses that accompany tech products.

Across the globe, Apple has 454 retail stores, with 265 in the United States alone. As a result, Apple’s retail infrastructure provides a welcome layer of convenience for users. This is infinitely more helpful than tech support via the phone.

Impeccable customer service was one of the key driving forces behind the creation of Apple’s retail stores. This isn’t something Apple haphazardly discovered. From the get go, the Genius Bars within Apple stores were positioned as an integral part of the overall user experience.

Everyone Wants to be an Entrepreneur:
Today everyone wants to be an entrepreneur. Cloud LGS has the potential to become the world's most popular in-home business model. Every business needs marketing. The Cloud LGS platform provides all aspects of digital marketing. With Cloud LGS users can make money selling marketing services and learn how to market their next business venture too.

Home Business Trends

Work from Home Business Trends:
As working from home trends continue to boom Cloud LGS marketing hubs become even more attractive. Google likes localized marketing. Google My Business is a free tool offered by Google to help local businesses compete with national brands. 

Providing local businesses and local marketers with a place nearby to obtain marketing advice is another growth hack to earn customer loyalty. Visits to a local Cloud LGS marketing hub creates the opportunity to generate additional revenue. 

Today’s Residential Business Climate:
Today’s business trends make it much easier to work from a residential property. Cloud LGS is able to easily operate from a residential home, apartment complex or commercial business environment. All of these building types have become relevant with today’s modern business concepts.

Subscription Revenue Growth Hacks:
Cloud LGS platform users are able to generate subscription revenue for themselves and Cloud LGS at zero marginal cost. Traditional business models increase revenue by increasing the cost of sales people, marketing activities, and staff increases. 

Cloud LGS revenue continually increases through it's subscription model without increasing other fixed costs. 

Cloud LGS Fulfilment Services:
Cloud LGS is able to leverage the experience of other users to complete fulfilment of services for new and existing customers. As Cloud LGS users expand their knowledge of the platform they are able act as fulfillment operators.

Fulfillment Operators & Zero Marginal Cost Growth.
Users demonstrating success using Cloud LGS offer their personal time to complete fulfillment. Upon completion of fulfillment users are paid a commission. This activity helps Cloud LGS grow brand, user adoption and revenue through fulfilment services at zero marginal cost. 

Similar to Amazon marketplace resellers, Cloud LGS resellers also drive revenue for Cloud LGS products and services. Whether Cloud LGS generates direct sales or revenue from resellers the platform still operates with zero marginal cost.

Products sold direct through and Cloud LGS resellers:

Cloud LGS Services

More ways Cloud LGS Leverages Zero Marginal Cost as a Growth Hack:
Cloud LGS is able to leverage a zero marginal cost model so that it may serve others and itself. In a space as competitive as internet marketing a relevant platform is a resource to other professionals. Positioning as a resource to other marketing professionals keeps Cloud LGS relevant to their growth hacks too.

Staying Relevant When Things Change:
Cloud LGS keeps itself relevant by providing income opportunities to others and continually evolving it's offered services. The internet continually kills jobs and creates new workforce opportunities. Today more and more people are turning to the internet for additional income opportunities

Becoming someone’s source of income is a growth hack to remain relevant.
Ask yourself this question: 
If something makes you money, is it important?
If you answered yes, then you would be likely to remain loyal to Cloud LGS.
Loyalty = Relevancy

Reseller Income Opportunities

Cloud LGS Reseller Income Opportunities:
The Cloud LGS platform offers others the ability to resell and promote Cloud LGS products and services for a profit without accruing any additional cost to themselves. This is another advantage to the Cloud LGS platform zero marginal cost business model.

How Cloud LGS Resellers Make Money:
Everyday people visit for website marketing support. Cloud LGS collects this data and offers it to Cloud LGS resellers for no additional cost to them. Resellers continually remarket Cloud LGS services for a profit. 

Mass User Adoption

Achieving Mass User Adoption:
Cloud LGS needs to continually brand and promote it's value to end users and potential customers. Equally important is to maintain price points for others to resell Cloud LGS services for a profit to themselves and Cloud LGS. 

Balancing Direct Sales and Resellers:
Cloud LGS branding positions itself as a resource to others with the option to buy direct. Even though the customer may purchase direct, often customers want additional 1 on 1 support. This creates the opportunity for resellers to generate additional income.

Profit on ALL Sides:
Cloud LGS generates a profit from every sold website whether the website is purchased direct from Cloud LGS or from a reseller. The reseller has the option to upsell the cost of website and sell additional marketing services to increase their gross margins.

Hiring Specialized Professionals

Hiring Specialized Professionals:
No matter what your profession it's likely you will seek consult from an attorney if you have a legal issue. Even though you can research online how to remedy your own legal issue, you’re still more likely to seek the help of a specialized legal professional. 

Marketing is no Different:
It’s easy to find marketing tips online. However if it's not your true profession hiring a specialized marketing consultant is usually still a better option. This is one of the many ways Cloud LGS is able to serve other marketing professionals new opportunities resulting in long term customer loyalty to Cloud LGS.

Cloud LGS Outsourcing Growth Hack:
The best forms of online marketing require an enormous amount of work and expertise. Most marketing professionals choose to specialize in specific areas of marketing. Very few marketers are highly trained in all areas of online marketing.

Cloud LGS team members have real life marketing experience in all areas. 
Resellers are able to pick and choose their specialized areas and outsource the other marketing services to Cloud LGS with a profit for themselves. All Cloud LGS marketing services are offered as a “A La Carte” pricing model with built-in profit margins for resellers and Cloud LGS.

Battle Tested

Cloud LGS is Battle-Tested:
The Cloud LGS business model was not whipped up overnight. All aspects of Cloud LGS growth hacks have been tested and proven. Today Cloud LGS has completed thousands of transactions executing the strategies listed above.

So Why the Investment?
Every business can always use more cash. Ideally, that cash will come from profits, but there will be times when you need to turn to financing routes to increase your available capital. Taking on debt or new investors can spur your company to greater growth and stability.

In Summary:
Cloud LGS has been groomed since conception to become an industry unicorn.

Cloud LGS Unicorn

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