The concept via Strategy Letter V
Once again: demand for a product increases when the price of its complements decreases. In general, a company’s strategic interest is going to be to get the price of their complements as low as possible. The lowest theoretically sustainable price would be the “commodity price” — the price that arises when you have a bunch of competitors offering indistinguishable goods.
So: Smart companies try to commoditize their products’ complements.
If you can do this, demand for your product will increase and you will be able to charge more and make more.
Applied to Facebook via 6-16-23 Strictly VC
Meta wants other companies to freely use and profit from new AI software it's developing, and it's working on ways to make the next version of its open-source large-language model available for commercial use, says The Information. The outlet notes that the move could prompt a feeding frenzy among AI developers who want alternatives to proprietary software sold by rivals Google and OpenAI.
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