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Real option analysis is also useful for these kinds of situations. In short, there's value in having the option to invest additional resources into a strategy a
by ThrustVectoring 8y ago
Real option analysis is also useful for these kinds of situations. In short, there's value in having the option to invest additional resources into a strategy after the passage of time and getting additional information about the value of the strategy.
Like, even if a cheap prototype is expensive to run at scale, it doesn't mean that you have to run that prototype in the same way if it happens to be important and successful. You can decide to pay the extra cost to use a cheaper infrastructure choice if and when it becomes necessary. Until then, you're getting a lot of value by throwing out more prototypes and figuring out what does and doesn't work in your business domain.