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Distinguishing between complements and substitutes is straightforward—in hindsight. When new technologies and business models first emerge, however, it is often hard to differentiate the two. If you are a banker, is blockchain your friend? A foe? The technology might be a complement if it makes financial transactions faster and more secure. It could be a substitute if it displaces traditional payment services with cryptocurrencies and fundraising through coin offerings.
Consider food delivery services such as China’s Ele.me, Brazil’s iFood, and America’s DoorDash: Are they complements or substitutes for restaurants? They are complements if customers rely on delivery services to discover new restaurants they hope to visit. They ...
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