Build/Make/Do it once, sell it many times. However, fixed costs (non continuous function) increase as customers increse in numbers. Consumer products have varia

Build/Make/Do it once, sell it many times. However, fixed costs (non continuous function) increase as customers increse in numbers. Consumer products have variable costs ($/unit) and a non continuous function for fixed costs too. At full capacity you have to build more physical capacity (investment + fixed costs) in order to supply more customers. So trying to find out what this Mark is talking about, you can think the value added as a function that is trying to scape toward the infinite (in the y-axis). Web based services has no variable cost (or this is tiny) so value added is pulling down only by fixed cost, which at some point jump to other value (we have to increase capacity to continue serving current and new customers!). It seems that web-based services value added function can reach farther points. This makes sense on a paper but real business is harder.