Recently, I was reading a book about sushi, and found out that soy sauce is actually a by-product of making miso.
Early forms of sushi were actually invented inland South East Asia, since they had to find a way to preserve it. It was found that if you put fish in rice and let it sit for months, the fermented rice kills off the bacteria, and keeps the fish edible, even if the fermented rice smelled like vomit.
When the practice migrated to Japan, the lords of Kyoto began to eat the fish earlier and earlier, and found that the rice, slightly fermented, was actually quite good. So, sushi rice came as a by-product of a modified process of preservation for fish.
Later on, somebody invented rice vinegar, so you no longer had to wait months for slightly fermented sushi rice--you just pour it onto freshly cooked rice.
In the sense of "create more value than you capture", you can also do pretty well for yourself by giving away your by-products. It lets you get the best of both worlds of the "charge money for value" and "influential people on the Internet think everything should be free". (I would assume that would be the point of the Rails example.)
You'd be absolutely amazed how much value you can extract out of a blog, for example, if you treat it as a friendcatcher.
(I love that word -- when I was younger and not exactly the most social of people, Mom always advised me to learn to cook because it was a "friendcatcher". It gives you a perfect built-in excuse to invite people over, even if you've just met them, and cooking and eating are so inherently social that it gets you over the "I don't really know you" hump a lot of the time.)
I am reminded of a story about a young Armour (of the meats). He bought a cow for $20, raised it and butchered it. He sold the meat for $20, and the hide for $2.
This is the concept that led to Armour Meats being so huge. Since they did all the processing in one place, they could sell things that previously had gone to waste, like organs and hide and hair.
And since he had the marginal products to live on, he could sell the meat at cost, and undercut any local butcher.
This is true of almost all commodity processing industries. Since usually everyone is using mostly the same processes, and paying largely the same price for their inputs, there is no differentiation and thus no profit in the base processing. Where people start to make money is to find a market for the by-product, and, particularly if the by-product has low bulk value, site a processing plant for the by-product next door to the main plant.
Absolutely. My sister works for a company that ships byproducts such as cow hearts and brains over to Europe where apparently there is a pretty big market for the stuff that we're too finicky to eat here in the US.
Early forms of sushi were actually invented inland South East Asia, since they had to find a way to preserve it. It was found that if you put fish in rice and let it sit for months, the fermented rice kills off the bacteria, and keeps the fish edible, even if the fermented rice smelled like vomit.
When the practice migrated to Japan, the lords of Kyoto began to eat the fish earlier and earlier, and found that the rice, slightly fermented, was actually quite good. So, sushi rice came as a by-product of a modified process of preservation for fish.
Later on, somebody invented rice vinegar, so you no longer had to wait months for slightly fermented sushi rice--you just pour it onto freshly cooked rice.