Viktor Shvets, a Bloomberg Markets analyst, explores investment strategies in a world where zero marginal costs redefine business models. He argues that traditional competitive advantages—like physical infrastructure or inventory—are obsolete in sectors where producing additional units costs near nothing. This shift, driven by digitalization, favors companies that leverage network effects and data ecosystems to create barriers despite minimal production expenses.

The core implication is stark: investors must prioritize firms with self-reinforcing platforms over asset-heavy industries. Shvets cites examples like streaming services and cloud computing, where scaling requires little incremental cost but demands massive user bases and proprietary algorithms. He warns that market saturation will intensify as entry barriers drop, urging businesses to focus on customer lock-in through exclusive content or AI-driven personalization.

Shvets’ framework challenges conventional metrics. Instead of valuing companies by tangible assets, he advocates assessing user engagement curves and network density. For instance, a social media platform gains value exponentially as more users join, even if server costs remain flat. This model, he stresses, demands a long-term view—short-term profit focus risks missing the compounding effects of scalable infrastructure.

The takeaway: In an era of zero-cost marginality, survival hinges on ecosystem control. Shvets’ analysis positions digital moats—data, algorithms, and user networks—as the new battleground, rendering traditional defenses irrelevant. Investors, he concludes, must redefine risk around adaptability, not capital intensity.