Somewhere between Nick Carr’s “Typology of Network Strategies” and Chris Anderson’s “Four Kinds of Free” is the secret to understanding our new economy:

Carr’s “Typology of Network Strategies”:

1. Network effect
2. Data mining
3. Digital sharecropping, or “user-generated content”
4. Complements
5. Two-sided markets
6. Economies of scale, economies of scope, and experience

Anderson’s “Four Kinds of Free”:

1. Direct cross-subsidy (get one thing free, pay for another)
2. Ad-supported (third-party subsidizes second party)
3. “Freemium” (a few people subsidize everyone else)
4. “Gift economy” (people give away things for non-monetary rewards)

Of course, both Carr and Anderson are building on theories and business models previously articulated by many others. A few that come to mind:

• Carl Shapiro & Hal Varian, Information Rules: A Strategic Guide to the Network Economy (1999)
• Stan Liebowitz, Re-thinking the Network Economy (2002)
• Jeffrey H. Rohlfs, Bandwagon Effects in High-Technology Industries (2001)
• Oz Shy, The Economics of Network Industries (2001)
• Don Tapscott & Anthony Williams, Wikinomics: How Mass Collaboration Changes Everything (2006)