PPF shift for Startups — Bayka
There is this concept of production possibility frontier (PPF) in Economics. It is often visualized as a curve that represents the optimal allocation of resources between producing two different products - see PPF1 curve on the diagram above. Point A is one such possible optimal allocation achieved by, say, Company A. However, you will realize that this curve is not always a perfect representation of reality. In fact, most companies do not operate on the optimal curve (point B), and there are often ways to increase efficiency through various ideas and techniques. This is exactly what we were doing in our consulting practice.
But, as I gained more experience and knowledge about the industry, I came to understand that new technologies play a significant role in PPF. These technologies can alter the entire curve, allowing for more production of both products using the same resources (PPF2). An inefficient company on point B can outcompete the efficient one by leveraging such technologies. This is particularly important for startups, as they are frequently equipped to utilize new technologies and achieve shifts in PPF.
For example, at App in the Air and Life in the Air, we had a concept of how to move the PPF of a low-cost airline to the right, and we were able to successfully execute on this vision.
