The Equation Series blog
How companies create, capture and destroy value
81 guides, case studies and explainers drawn from the research behind each book. Start with an industry.
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The complete industry guides
Healthcare · Complete guide
How the Healthcare Industry Makes Money: A Complete Guide
Who pays for US healthcare, how hospitals, insurers, PBMs, drugmakers and doctors get paid, and where the profit settles in a $5.3 trillion system.
15 min read
Finance · Complete guide
How Financial Companies Make Money: The Complete Guide
Banks, card networks, insurers, asset managers and fintechs earn money in six ways. Here is how each engine works, with real US numbers and the failures.
13 min read
Artificial Intelligence · Complete guide
How AI Companies Make Money: The Business of AI Explained
How AI companies make money, layer by layer: chips, clouds, model labs, open models and apps, with the margins each earns and who pays for the gap.
17 min read
Energy · Complete guide
How the Energy Industry Makes Money: The Business Model Guide
How oil, gas, utilities, power markets and clean energy actually earn money, where the margins settle, and why so many energy companies still fail.
16 min read
Trading & Options · Complete guide
How Trading Firms Make Money: The Business of Trading Explained
Trading firms make money from spreads, risk premia, order flow, fees and speed, mostly at the expense of other traders. Here is who wins, who pays and why.
14 min read
Venture Capital · Complete guide
How Venture Capital Works: The Complete Guide to the VC Business
How venture capital works, end to end: where VC money comes from, how funds are paid, why the power law rules, how deals are priced and how value becomes cash.
16 min read
Private Equity · Complete guide
How Private Equity Makes Money: Fees, Carry and the Buyout Engine
How private equity firms earn fees and carried interest, where buyout returns really come from, and the four factors that decide whether a deal works.
15 min read
Education Technology · Complete guide
The EdTech Business Model: How Education Companies Make Money
How edtech companies make money: who pays, pricing, unit economics, margins and sales routes, with Duolingo, Chegg, 2U and PowerSchool as worked examples.
16 min read
Manufacturing · Complete guide
How Manufacturing Companies Make Money: The Complete Guide
How manufacturers really earn a profit: the cost stack, fixed cost and operating leverage, the aftermarket, and the four factors that decide who wins.
14 min read
Healthcare
All healthcare articlesExplainer
How Do Medicare Advantage Plans Make Money? The Formula Explained
Medicare Advantage plans earn the gap between a risk-adjusted federal payment and members' care costs. Here is how benchmarks, bids, stars and coding work.
8 min read
Explainer
How Do PBMs Make Money? Rebates, Spreads and Fees Explained
Pharmacy benefit managers earn from retained rebates, spread pricing, owned pharmacies and fees. Here is how each works, with one prescription traced.
9 min read
Guide
How to Analyze a Health Insurance Company: 7 Steps
A practical guide to reading a health insurer: funding mix, medical loss ratio, cost trend, reserves, risk adjustment, segment profits and the policy calendar.
8 min read
Guide
How to Analyze Hospital Financial Statements: A Practical Guide
How to read a hospital's finances: net vs gross revenue, payer mix, operating vs total margin, days cash on hand, 340B, leases and the red flags to watch.
8 min read
Case study
Walgreens and VillageMD: Why the Primary Care Bet Failed
Walgreens put about $9.7 billion into VillageMD to build 1,000 clinics. Within four years it wrote most of it off. Here is why retail primary care failed.
8 min read
Case study
What Happened to Babylon Health? From $4.2B SPAC to Collapse
Babylon Health sold itself as an AI doctor, listed at a $4.2 billion valuation in 2021, and collapsed in 2023. The cause was US risk contracts, not the app.
8 min read
Finance
All finance articlesGuide
Fintech Unit Economics: How to Evaluate a Fintech Business
How to judge a fintech's unit economics: net take rate, contribution payback, CAC, churn, funding and concentration, with Chime, Affirm and Visa as examples.
8 min read
Explainer
How Do Insurance Companies Make Money? Float and Combined Ratio
Insurers earn from underwriting and from investing float, the premiums they hold before paying claims. Here is how the combined ratio and float work.
7 min read
Case study
How Does Visa Make Money? The Business Model Explained
Visa lends nothing and issues no cards, yet kept about $23.5 billion of profit in fiscal 2026. Here is how its take rate, fees and interchange work.
7 min read
Guide
How to Analyze a Bank's Financial Statements: A 7-Step Guide
A practical way to read a US bank's 10-K and call reports: deposits, unrealized losses, NIM, credit, capital and governance, with the lessons from 2023.
8 min read
Comparison
Neobank vs Traditional Bank: How the Business Models Differ
Neobanks like Chime earn mostly from debit interchange through partner banks; traditional banks earn from deposit spread and loans. Here is how they compare.
7 min read
Case study
What Happened to Synapse? The BaaS Collapse That Froze $219M
Synapse sat between fintech apps and their banks. When it failed in 2024, over 100,000 people were frozen out of about $219 million. Here is why.
8 min read
Artificial Intelligence
All artificial intelligence articlesExplainer
AI Inference Costs Explained: Why Tokens Get Cheaper, Bills Don't
What AI inference costs, why the price per token falls about 10x a year, why reasoning and agents make bills rise anyway, and what it does to gross margins.
9 min read
Guide
AI Wrapper Startups: How to Tell If One Has a Moat
How to evaluate whether an AI wrapper startup has a moat: the thin vs thick test, platform risk from model suppliers, and lessons from Jasper, Windsurf and Cursor.
8 min read
Explainer
CoreWeave's Business Model Explained: How a Neocloud Makes Money
How CoreWeave makes money renting Nvidia GPUs on multi-year contracts, why 60% EBITDA margins still produce losses, and the three clocks behind neocloud risk.
8 min read
Guide
How to Price an AI Product: Seats, Usage or Outcomes
A practical guide to AI pricing: how to choose between seats, usage, credits and outcome pricing, test margins at heavy usage, and learn from Cursor and Sierra.
8 min read
Comparison
Open vs Closed AI Models: How Each Business Model Makes Money
Open-weight vs closed AI models compared: who makes money from each, what licences allow, when self-hosting pays, and why labs open when behind and close when ahead.
8 min read
Case study
What Happened to Inflection AI? The $4 Billion Lab That Microsoft Hired
Inflection AI raised $1.5 billion and built Pi, then Microsoft hired its founders and most staff in 2024. Here is what went wrong and what the company is now.
7 min read
Energy
All energy articlesExplainer
How Do Power Purchase Agreements Work? PPAs Explained
A power purchase agreement fixes the price of a plant's output for 10 to 25 years so it can be financed. How physical and virtual PPAs work, and who carries which risk.
11 min read
Guide
How to Read a Utility Rate Case: Rate Base, ROE and the Bill
A step-by-step guide to reading a US utility rate case: the revenue requirement, rate base, allowed ROE, equity ratio, riders, and what it all means for bills.
10 min read
Explainer
PJM Capacity Auction Explained: Why Prices Jumped Elevenfold
PJM's capacity price rose from about $29 to about $329 per MW-day in two auctions. How the auction works, why data centers moved it, and what it does to bills.
9 min read
Case study
Texas Power Crisis 2021: What Happened and Who Paid
In February 2021 Texas's grid nearly collapsed and power sat at $9,000/MWh for days. Why Brazos and Griddy went bankrupt while Vistra and NRG survived.
9 min read
Case study
What Happened to Northvolt? Why Europe's Battery Champion Failed
Northvolt raised more than $13 billion and booked over $50 billion of orders, then went bankrupt in 2024–25. The cause was manufacturing yield, not demand.
9 min read
Case study
Why Did Plant Vogtle Cost So Much? Inside the Nuclear Overrun
Vogtle Units 3 and 4 were budgeted at about $14 billion and cost more than $35 billion, seven years late. What went wrong, who paid, and what it means for new nuclear.
9 min read
Supply Chain
All supply chain articlesExplainer
How Do Freight Brokers Make Money? Margins, Cash and the Cycle
Freight brokers earn the spread between what shippers pay and what carriers are paid. Here is how that margin works, why it moves with the cycle, and what it costs.
8 min read
Guide
How to Calculate Landed Cost: Freight, Tariffs and Sourcing
Landed cost is the full cost of getting a product to your warehouse. Here is how to calculate it, step by step, with freight, duties, fees and carrying cost.
9 min read
Guide
How to Read Container Shipping Rates: Spot, Contract and Indices
A practical guide to container shipping rates: TEU vs FEU, Drewry and SCFI indices, spot vs contract, surcharges, and what the 2021 boom and 2026 spike teach.
8 min read
Comparison
LTL vs Truckload: Differences in Cost, Pricing and Risk
LTL and truckload share the same highways but are different businesses. Compare how each is priced, what drives cost, who the carriers are and when to use which.
7 min read
Explainer
The Bullwhip Effect Explained: Causes, Examples and Cures
The bullwhip effect turns small changes in consumer demand into huge swings in factory orders. Here are its five causes, real examples and what reduces it.
8 min read
Case study
What Happened to Flexport? The Software Forwarder's Hard Reset
Flexport was valued at about $8 billion in 2022, then cut about 1,300 jobs, lost a CEO and missed its profit target. Here is what happened and where it stands.
7 min read
Trading & Options
All trading & options articlesExplainer
How Payment for Order Flow Works: Robinhood, Citadel and You
Payment for order flow is how commission-free brokers like Robinhood get paid: wholesalers such as Citadel Securities pay to fill your orders. Here is how it works.
8 min read
Guide
How to Spot Backtest Overfitting: A 20-Question Checklist
Most backtests look better than the live results that follow. Here is how to spot overfitting, with the statistics, the common biases and a 20-question checklist.
9 min read
Case study
What Happened to Archegos Capital? The $10 Billion Collapse
Archegos grew from $1.5 billion to more than $36 billion in a year, then defaulted in March 2021 and cost its banks over $10 billion. Here is how it happened.
8 min read
Case study
What Happened to Long-Term Capital Management (LTCM)?
LTCM had two Nobel laureates, 40% returns and models that were mostly right. It still lost about $4.6 billion in 1998. Here is how leverage ended it.
8 min read
Case study
What Happened to XIV? Volmageddon and the Inverse VIX Note
On 5 February 2018 the VIX jumped 116% and Credit Suisse's XIV note lost about 96% of its value after the close. Here is how a real premium ended in a day.
8 min read
Explainer
What Is the Variance Risk Premium? A Plain-English Guide
The variance risk premium is the gap between options' implied volatility and the volatility that follows. Here is why it exists, who earns it and how it crashes.
9 min read
Venture Capital
All venture capital articlesGuide
How to Raise a Seed Round: A Founder's Guide for 2026
How to raise a seed round in 2026: what seed money must prove, typical round sizes and valuations, SAFEs or priced rounds, finding a lead and protecting ownership.
8 min read
Guide
How to Read a VC Term Sheet: A Clause-by-Clause Guide
How to read a venture capital term sheet: valuation and option pool, liquidation preferences, anti-dilution, board seats and vetoes, with 2026 market data.
9 min read
Explainer
How VC Funds Make Money: 2 and 20, Carry and the Waterfall
How venture capital funds make money: the 2% management fee, 20% carried interest, the waterfall, recycling and why 3x gross becomes about 2.45x for LPs.
9 min read
Comparison
SAFE vs Convertible Note: Which Should a Startup Use?
SAFE vs convertible note: how each converts, caps and discounts, interest and maturity, the dilution traps, and when founders and investors prefer each one.
7 min read
Explainer
The Power Law in Venture Capital, Explained with Real Numbers
The power law in venture capital means a few deals make nearly all the returns. Here are the data, the fund math and what it means for investors and founders.
8 min read
Case study
What Happened to SoftBank's Vision Fund? Lessons from $100 Billion
What happened to the SoftBank Vision Fund: the $98.6 billion raise, capital as a weapon, the WeWork and Greensill losses, DoorDash and Coupang wins, and the OpenAI bet.
8 min read
Private Equity
All private equity articlesGuide
How an LBO Works: A Step-by-Step Leveraged Buyout Example
A worked leveraged buyout example with real arithmetic: sources and uses, the debt schedule, free cash flow, exit value, MOIC and IRR, and what moves the result.
9 min read
Guide
How Private Equity Firms Value a Company: A Practitioner's Guide
How private equity firms value companies: comps, precedents, DCF and the LBO model, plus quality of earnings and the EV-to-equity bridge, with worked numbers.
8 min read
Case study
The RJR Nabisco Buyout: What Barbarians at the Gate Got Right
KKR won RJR Nabisco for $109 a share in 1988, the biggest LBO of its era. Investors earned roughly break-even. Here is why the deal disappointed.
8 min read
Case study
The TXU Buyout: How the Largest LBO Became Energy Future Holdings
KKR, TPG and Goldman bought TXU for about $45 billion in 2007. Shale gas collapsed power prices, and Energy Future Holdings went bankrupt in 2014. Here is why.
7 min read
Explainer
What Is a Continuation Fund? GP-Led Secondaries Explained
A continuation fund lets a private equity firm sell a company from an old fund to a new one it also manages. How the deals work, how they are priced and the conflicts.
7 min read
Explainer
What Is a Dividend Recap? How Private Equity Pays Itself Early
A dividend recap adds debt to a portfolio company to pay its private equity owners a dividend. See the math, why IRR rises while MOIC falls, and the risks.
7 min read
Education Technology
All education technology articlesComparison
B2C vs B2B EdTech: Which Business Model Works Better?
B2C edtech sells to learners and parents; B2B sells to schools, universities and employers. Compare acquisition, retention, margins, risks and exits with real cases.
7 min read
Case study
How Does Duolingo Make Money? Inside Its Freemium Model
Duolingo earned $1.04 billion in 2025 from a free app. How its subscriptions, ads and English test work, why near-zero acquisition cost matters, and what AI changes.
7 min read
Guide
How to Evaluate EdTech Efficacy Claims and ESSA Evidence Tiers
A step-by-step guide to judging whether an edtech product works: the four ESSA evidence tiers, effect sizes, study design, sample size and the usage-study trap.
9 min read
Guide
How to Sell EdTech to School Districts: A K-12 Sales Guide
A practical guide to K-12 edtech sales: who buys inside a district, the budget calendar, Title I funding, RFPs and co-ops, and how to run pilots that convert.
9 min read
Explainer
The AI Tutoring Business Model: Costs, Evidence and Moats
Can AI tutoring make money? Inference costs per student, what schools pay, what the 2024–26 evidence shows, and what makes an AI education business defensible.
8 min read
Case study
What Happened to Chegg? How Free AI Broke Homework Help
Chegg's revenue fell from $776 million in 2021 to $377 million in 2025 after ChatGPT and Google AI Overviews hit both its answers and its traffic. Here is why.
7 min read
Manufacturing
All manufacturing articlesGuide
How to Calculate OEE: Formula, Worked Example and Pitfalls
How to calculate overall equipment effectiveness step by step, why the same line can report 65% or 86%, and how to price an hour of downtime on your own line.
8 min read
Explainer
Operating Leverage in Manufacturing: Why Profits Swing So Hard
Operating leverage explains why a 10% drop in factory volume can wipe out 40% of profit. Formula, worked examples and real cases from Boeing, Intel and Nucor.
8 min read
Guide
Reshoring Cost Analysis: China vs Mexico vs US Landed Cost
How to compare the total landed cost of making a product in China, Mexico or the US under 2026 tariffs, and why the labor gap, not the tariff, decides reshoring.
8 min read
Explainer
The Toyota Production System Explained: Lean, Jidoka and Kanban
What the Toyota Production System is, how jidoka, just-in-time and kanban work, why NUMMI proved it, and why even Toyota and Boeing lost it under pressure.
8 min read
Case study
What Went Wrong at Boeing: How a Quality Culture Broke Down
From the 737 MAX crashes to the 2024 door plug, Boeing's crisis was a failure of process capability. Here is what went wrong, what it cost and what changed.
9 min read
Case study
Why GE Broke Up: The End of America's Model Conglomerate
GE split into GE HealthCare, GE Vernova and GE Aerospace between 2023 and 2024. Here is why the conglomerate failed, and why the penny dividend mattered more.
8 min read