“beneficiation economics” – transforming a primary material (mined or extracted from nature) to a more finished product of higher export sales value.
South Africa’s PELCHEM has responded with a ‘fluorochemical expansion initiative’ that combines an intensive technology development effort with a commercialization of new fluorochemical manufacturing facilities targeting high value, specialty and niche products.
Local beneficiation must refine the highest retail values from the natural resources as close to these natural resources as possible if the resource holder populations and the technology providers are to share the wealth created.
- “Great companies do something unique and because of this unique thing they do, have monopoly like pricing power. A company should start when they have a technology that’s 10 times better than their closest competitor. Is it different or new enough that people will notice and buy it.”
- “You go where there are network effects – where the value is driven by the fact that you have a number of other people inside the network using your product or service at a given time. The question of why is it valuable to the first person who uses it – if it’s only extremely valuable once you have one million people, how would you get the first ten or the first hundred to buy in before you get to one million.”
- “Economies of scale allow a company to grow exponentially without growth in their fixed costs or overhead.”
- “Start with a small market. If you define a monopoly as having a large market share, how do you get a large market share as a startup. The answer is that you have to start within a small market. If you start after a market that’s measured in hundreds of billions or trillion dollars, such as the United States, you will be a tiny fish in a vast ocean. You will incite enormous unpredictable competitor that could quickly wipe you out
Under-developed markets have the greatest need, the least choice, and the most growth potential.