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BUSINESS MODEL INNOVATION

Rooted in strategic management research, Business Model

Innovation explores the concepts, tools, and techniques that enable
organizations to gain and/or maintain a competitive advantage in the
face of technological innovation, globalization, and an increasingly
knowledge-intensive economy.
Updated with all-new cases, this second edition of the must-have
for those looking to grasp the fundamentals of business model
innovation, explores the novel ways in which an organization can
generate, deliver, and monetize benefits to customers.

Allan Afuah is Professor of Corporate Strategy and International

Business at the Ross School of Business at the University of
Michigan, USA. He is a recipient of the 2012 AMR Best Article Award
for his paper, “Crowdsourcing As a Solution to Distant Search.” Since
obtaining his Ph.D. from the Massachusetts Institute of Technology,
he has written six books that have been translated into more than
ten languages for innovation courses taught at undergraduate,
graduate, and doctorate levels.
BUSINESS MODEL
INNOVATION
Concepts, Analysis, and Cases

Second Edition

Allan Afuah
Second Edition published 2019
by Routledge
52 Vanderbilt Avenue, New York, NY 10017

and by Routledge
2 Park Square, Milton Park, Abingdon, Oxon, OX14 4RN

Routledge is an imprint of the Taylor & Francis Group, an informa business

© 2019 Taylor & Francis

The right of Allan Afuah to be identified as author of this work has been asserted
by him in accordance with sections 77 and 78 of the Copyright, Designs and
Patents Act 1988.

All rights reserved. No part of this book may be reprinted or reproduced or utilized
in any form or by any electronic, mechanical, or other means, now known or
hereafter invented, including photocopying and recording, or in any information
storage or retrieval system, without permission in writing from the publishers.

Trademark notice: Product or corporate names may be trademarks or registered

trademarks, and are used only for identification and explanation without intent to
infringe.

First edition published by Routledge 2014

Library of Congress Cataloging in Publication Data Names: Afuah, Allan, author.

Title: Business model innovation: concepts, analysis, and cases / Allan Afuah.
Description: New York, NY: Routledge, 2018. | Earlier edition: 2014.
Identifiers: LCCN 2018019527| ISBN 9781138330511 (hardback) | ISBN
9781138330528 (pbk.)
Subjects: LCSH: Strategic planning--Mathematical models. | Industrial
management-Mathematical models.
Classification: LCC HD30.28 .A3467 2018 | DDC 658.4/012--dc23
LC record available at https://lccn.loc.gov/2018019527

ISBN: 978-1-138-33051-1 (hbk)

ISBN: 978-1-138-33052-8 (pbk)
ISBN: 978-0-429-44648-1 (ebk)

Typeset in 9/13 Interstate Light by

Servis Filmsetting Ltd, Stockport, Cheshire
 To every family that has been kind enough to welcome a foreign
student to its home.

To my grandmother, Veronica Masang Nkweta and the Bamboutos

highlands in Cameroon which she tilled to feed me, but still often
had to stay hungry so that my uncles and I could have something to
eat.
CONTENTS

List of Figures
List of Tables
List of Exhibits
Preface
Acknowledgments

PART I: INTRODUCTION

1 Introduction to Business Model Innovation

PART II: ANALYTICAL TECHNIQUES

2 Business Model Frameworks

3 Business Valuation Techniques: A Strategic Management

Approach

4 Breakeven Analysis in Strategy and the Margin-SalesRate

Matrix (MSM)

5 Business Model Appraisal Frameworks

PART III: CORE CONCEPTS

6 Network Effects and Multisided Platforms

 7 Crowdsourcing

8 Disruptive Innovations and Business Models

9 Complementary Assets: A Cornerstone of Profiting from

Innovation

10 Long Tail Strategies in Business Models

Appendices
A Strategy and Business Models
B Types of Business Models
C Glossary of Business Model Terms
D Important Formulae

PART IV: CASES

Introduction to Case Analysis: A General Manager’s

Perspective

Case 1: Alibaba in 2018

Case 2: Tinder: New CEO, New Reputation? Or Should You Swipe

Left on Tinder?

Case 3: Spotify: Now What?

Case 4: Snapchat: Another Overvalued Tech Unicorn?

Case 5: Pokémon Go: Way to Go?

Case 6: SoFi (Social Finance Inc.)

Case 7: Airbnb: Innovation in Hospitality

Case 8: Pixar: Changing the Rules of the Game

Index
LIST OF FIGURES

1.1: Relationship between strategy, business models, and

performance
1.2: Analytical techniques for exploring business models
2.1: Components of the business model builder (BMB) framework
2.2: Airbnb’s business model portrait produced using the BMB
2.3: A business model in its coopetitive and macro environments
4.1: A business model, strategy, and their environments as drivers
of performance
4.2: The Margin-SalesRate matrix
4.3: Strategic implications of an MSM analysis
4.4: A Margin-SalesRate matrix for selected ecommerce businesses
4.5: A Margin-SalesRate matrix for Amazon’s businesses in 2017
5.1: Components of a VARIM framework
9.1: The role of complementary assets in profiting from innovation
9.2: Strategies for profiting from an invention
10.1: The long tail
A.1: Relationship between strategy, business models, and
performance
LIST OF TABLES

1.1: World’s top five most valuable firms (March 12, 2018)
1.2: World’s top six most valuable unicorns (February 26, 2018)
2.1: Components of a business model and associated foundational
questions
2.2: Generic strategies when the goal is to have a competitive
advantage
2.3: Synthesizing the components of a business model
3.1: Amazon and Apple: Expected earnings and revenues to justify
their market valuations (March 12, 2018)
3.2: Cisco’s valuation during the dot.com boom and bust
5.1: Core questions in a VARIM analysis
5.2: Strategic consequences of a VARIM analysis
5.3: A VARIM analysis of Uber’s business model
5.4: Similarities and differences between the VARIM and VRIO
frameworks
6.1: Examples of two-sided platforms (networks)
8.1: Criteria for determining if a technology will be disruptive
8.2: What makes an established technology susceptible to
disruption?
8.3: Mini mills disrupt integrated steel mills
8.4: Innovation outcomes: More than one type of disruption?
9.1: Appraising the profitability potential of combining
complementary assets and acquired invention
A.1: The evolution of strategic management
B.1: Types of business models
LIST OF EXHIBITS

1.1: Alibaba income statement highlights

1.2: Number of active users and revenue per active user for Alibaba
1.3: Gross merchandise value (GMV) for Alibaba
3.1: Distribution of owners of Spotify’s ordinary shares at IPO on
April, 3, 2018
3.2: Spotify’s early funding history
3.3: Spotify partial income statement numbers (million €)
3.4: Spotify’s operating metrics
4.1: Snapchat’s income statement (in million US$)
4.2: Snapchat’s quarterly global average daily active users (millions)
4.3: Snapchat’s quarterly average daily active users by region
(millions)
4.4: Snapchat’s quarterly average revenue per user
5.1: Percentage of freemium mobile gamers who made in-game
purchases in February 2016, by number of purchases
6.1: Student loan market landscape, SoFi loan rates
7.1: Airbnb’s funding rounds
7.2: How long customers stay/spend at Airbnb versus hotels in
different cities
7.3: Some interesting Airbnb statistics
8.1: An animation movie value chain
8.2: Pixar movies at the box office (Gross US sales adjusted for
ticket price inflation)
8.3: Top 53 digital animation movies by gross unadjusted theater
sales in the US (March 30, 2018)
PREFACE

In the four years since the first edition of this book was published,
management scholars have conducted more research that can help
us better understand why business model innovation can be such a
powerful driver of profitability and market value. In this second
edition, I draw on that research—and the decades of prior
innovation research—to synthesize five analytical techniques
(business model frameworks, business valuation techniques,
breakeven analysis, the Margin-SalesRate matrix, and business
model appraisal frameworks) and six digital/sharing economy core
concepts (network effects, multisided platforms, crowd-sourcing,
disruptive innovation, long tails, and complementary assets) that can
help entrepreneurs, investors, and managers: (1) perform the
analyses to enable them to take more informed decisions, (2)
explain to stakeholders how and why decisions were reached, (3)
lend credibility to decisions and the people behind the decisions, and
(4) better explain and make predictions about organizational actions.
The book is also about demonstrating how these analytical
techniques and core concepts can be used to explain and make
predictions about how and why some firms perform better than
others—about why, for example, business model innovations have
contributed massively to the performance of firms in today’s
digital/sharing economy.
Consequently, the book should be valuable to anyone—manager,
entrepreneur, investor, scholar, venture capitalist, policy maker, or
specialist—who wants to contribute to the success of an organization
in achieving its goals in today’s digital economy. Thus, the book can
be used to teach senior-level undergraduate or graduate level
courses in business, especially entrepreneurship or strategy. The
book can also be used by those managers and investors that did not
take courses which explore the analytical techniques and core
concepts of the book.

What Is Unique About This Second Edition of

Business Model Innovation?
By drawing on comprehensive research by top management scholars
in the field, Business Model Innovation, Second Edition:

1. Synthesizes the following analytical techniques to help the

reader take and defend more informed decisions, especially in a
digital economy:

• Business model frameworks

• Strategy-oriented business valuation techniques
• The Margin-SalesRate matrix
• Business model appraisal frameworks.

2. Provides a comprehensive description of the following core

digital economy concepts that are critical to understanding
business model innovation and its contributions to firm
performance in today’s economy:

• Network effects
• Multisided platforms
• Crowdsourcing
• Disruptive innovation
• Long tails
• Complementary assets.

3. Provides an appendix that explains the differences between

business models and strategy, and the evolution of the latter.
4. Provides up-to-date cases about firms operating in today’s
digital/sharing economy.
5. Offers an introduction to how to analyze cases in courses that
take the general manager’s perspective.
6. Provides a glossary of frequently used strategic management
terms in a digital/sharing economy.
ACKNOWLEDGMENTS

I would like to thank the anonymous reviewers of this second edition

of Business Model Innovation for their suggestions and
encouragement.
I continue to owe a huge debt of gratitude to my professors and
mentors at MIT. They introduced me to the subject of innovation,
and to the virtues of patience and tolerance. I am forever grateful to
them.
Some of my students at the Stephen M. Ross School of Business
at the University of Michigan gave me very useful feedback when I
pre-tested the concepts of Business Model Innovation in the
classroom. Some of the cases in Part IV of the book were written by
students under my supervision.
In particular, I would like to thank Gina McNamara for outstanding
research assistance. Gina co-authored some of the cases in Part IV
of the book, and also researched and edited the other cases.
Special thanks go to Michael and Mary Kay Hallman for the
funding that enabled me to explore the topic of business model
innovation with more freedom and dedication.
 PART I

INTRODUCTION
1 Introduction to Business
Model Innovation

KEY TERMS
• Analytical techniques
• Business model innovation
• Business models
• Core concepts in a digital economy
• Crowdsourcing
• Macro environment
• Monetization
• Multisided platforms
• Network effects
• Strategy

Introduction
On March 12, 2018, the world’s top five most valuable firms by
market capitalization were Apple, Alphabet, Amazon, Microsoft, and
Facebook, while the world’s top six unicorns— privately-held startups
valued at a billion dollars or more—were Uber, Ant Financial, Didi
Chuxing, Xiami, Airbnb, and Meituan-Dianping (Tables 1.1 and 1.2).
Netflix was the only member of technology’s FAANGs (Facebook,
Amazon, Apple, Netflix, and Google) missing from the list. The
combined market value of the top five firms exceeded $3.5 trillion,
with the most valuable of them, Apple, flirting with the $1 trillion
valuation dream. Three of the top five richest people in the world
were founders or co-founders of these top firms. Thousands of
managers and other employees from these firms had also become
billionaires or millionaires. Just as interesting, thousands of
individuals who invested in these firms made tons of money. Of
course, many startups and established firms did not fare as well as
these top performers, and the millions who invested in the losers
lost tons of money.
These fascinating facts about these overachievers raise many
interesting questions for the entrepreneurs and managers whose
overarching responsibility is the performance of their organizations,
and for the investors who want to win by investing their money in
future winners. What is it about the business models of these
winners—about the activities that they perform to build and use
resources to generate, deliver, and monetize benefits to customers—
that enables them to perform so well? How were the values of these
businesses—especially the values of the unicorns that were still
losing money—determined? That is, how did “markets” assign
monetary amounts to what these organizations are worth? Could
these top performers have been overvalued? Why did their
competitors not do as well, and could the differences in
performances have been predicted years earlier? Is offering excellent
products or services enough to guarantee the types of profits that
enable firms to command such high market valuations? What can an
underperformer do, if anything, to topple these overachievers? Do
the phenomenal advances in information technology (IT), social
media, communications, globalization, and trade—some of which
have inspired or led to the digital/ sharing or social media economy
—have anything to do with the superior performance of these firms?
Table 1.1 World’s top five most valuable firms (March 12, 2018)
Firm Share price Market value (Capitalization) P/E
(US$) (US$)
Apple 181.72 922.05B 17.78
Alphabet 1,165.93 809.96B 36.32
Amazon 1,598.39 773.79B 349.92
Microsoft 96.77 745.11B 29.64
Facebook 184.76 536.73B 29.99
Source: Daily online stock broadcasts. Retrieved on March 12, 2018.
Table 1.2 World’s top six most valuable unicorns (February 26,
2018)
Unicorn Valuation in 2017 Total equity funding Country
(US$) (US$)
Uber 69B 10.7B USA
Ant Financial 60B 4.5B China
Didi Chuxing 56B 17.0B China
Xiaomi 45B 1.1B China
Airbnb 31B 3.4B USA
Meituan- 30B 8.3B China
Dianping
Source: Crunchbase Unicorn Leaderboards. Available from
https://techcrunch.com/unicorn-leaderboard/. Retrieved on March 10, 2018.

A fruitful exploration of these questions requires a comprehensive

and thorough understanding of management in today’s economy. In
particular, it requires an in-depth understanding of two management
domains. First, it requires comprehension of business model
innovation—comprehension of the building and use of resources to
generate, deliver, and monetize benefits to customers in novel ways.
Business model innovation has always played a critical role in the
performance of firms—witness examples from Xerox in its heyday to
Apple, Google, and Facebook today—a role whose significance has
increased in today’s digital/sharing economies. Second, exploring
these questions requires an in-depth understanding of analytical
techniques and core concepts to help entrepreneurs, investors, and
managers (1) perform the relevant analyses to assist them in taking
more informed decisions, (2) explain to stakeholders how and why
decisions were reached, (3) lend credibility to decisions and the
people behind the decisions, and (4) better explain and make
predictions about organizational performance in today’s economies.
This book is about providing an in-depth knowledge of these two
domains—the type of proficient knowledge that managers,
entrepreneurs, and individual investors utilize to make informed
decisions and, importantly, explain to their stakeholders why and
how they arrived at the decisions. This book is about the analytical
techniques and concepts that can be used, not only to make and
defend business model decisions, but also to explain why some
business models are more profitable than others, or why one should
invest in one firm rather than another. What is business model
innovation, and what are these analytical techniques and core
concepts that the book is about?

Business Model Innovation

An organization’s business model is the set of activities that it
performs to build and use resources to generate, deliver, and
monetize benefits (embodied in products and services) to
customers.1
That is, a business model is a set of activities for creating and
capturing value. Therefore, a business model innovation is the set of
activities for building and using resources to generate, deliver, and
monetize benefits to customers in novel ways.2
It is about creating and capturing value in novel ways. Thus, the
innovation in a business model can be from the novelty in the
generation of benefits, delivery of the benefits to customers,
monetization of the benefits and, importantly, in the building and
use of the resources to generate, deliver or monetize benefits to
customers. How?

Generation of Benefits
Organizations generate customer benefits by transforming inputs
(information, materials, components, labor, knowhow, land,
equipment, capital, and so on) into products, services or other
objects of exchange that embody the benefits.3 The transformation
process consists of performing a sequence of interdependent
activities selected to add value at each step— additions that
cumulatively deliver a final product or service that embodies the
benefits that customers demand.4 For example, smartphone
manufacturers transform inputs such as technological knowhow,
microchips, touch screens, batteries, microcode, and other
components into smartphones by pursuing the appropriate R&D,
software development, product design, purchasing, logistics,
manufacturing, marketing, sales, distribution, and other value-
adding activities. The cumulative result of the value added by each
of these activities to the inputs results in the smartphone and the
customer benefits that it embodies.
Innovation in a business model—when generating customer
benefits—can be in the novel ways in which one or more of these
value-adding activities is performed or in the ways in which the
activities interact. For example, one of the innovations in Apple’s
iPhone business model was the crowdsourcing of apps development.
That is, rather than developing all the apps internally or having
designated contractors develop them, Apple outsourced
development in the form of an open call to anyone anywhere in the
world that wanted to develop apps for the phone, with no ex ante
contracts on specific apps. The apps from crowdsourcing significantly
increased the value of smartphones to users and the willingness of
customers to pay. The crowdsourcing of apps also changed the rules
of the game for app development in the industry and the role that
apps played in the profitability of a firm and, importantly, the lives of
the users of the apps.
Walmart’s rise to become the world’s largest company (by sales
revenues) has also been attributed to business model innovation.
The company started out in small towns in parts of southwestern
United States and then scaled its activities by building stores in
contiguous towns without leaving “holes” behind for competitors to
move in and occupy. According to former Walmart CEO, David Glass,
“We were always pushing from the inside out,” Glass explained. “We
never jump and then backfill.”5

Delivery of Benefits
Business model innovation can also be in the way benefits are
delivered to customers. For example, in the 1990s, Dell very
successfully sold its computers directly to end customers online,
changing the rules of the game in an industry where PCs had been
sold through powerful brick-and-mortar distributors. In 2001, when
Apple also bypassed distributors to sell directly to end customers, it
changed the rules of the game further by building its own brick-and-
mortar retail stores to sell its own products. Apple’s retail stores
would go on to have the highest sales per square foot of any retailer,
for many years. More recently, startups such as Warby Parker and
Hubble Contacts have used direct-to-consumer (DTC) business
models to bypass retailers, stealing market share from incumbents
once believed to be invincible.

Monetization of Benefits
A firm monetizes customer benefits when it converts them into
money or other legal tender whose value is greater than the cost of
providing the benefits. Thus, innovation in the monetization of
benefits can be in which customers get to pay how much for which
benefits, when and how payments are made, or in reducing the cost
of providing benefits to customers. To monetize its search engine,
Google at first rented out the engine to other firms such as Yahoo.
However, it was only after it turned to paid-listing advertising that
revenues and profits took off. An even more captivating example of
innovation in monetization comes right out of the pages of the Xerox
914 photocopier story decades before the birth of Google.6 The
machine was an innovative copier but was going to cost so much, if
sold outright, that Xerox was advised by a reputable consulting firm
to shelve the product because of its economics. Xerox’s management
decided not to take the advice and leased out the machine instead
of mothballing it. The machine’s sales and profitability shot through
the roof. The subsequent phenomenal performance of the machine
earned Xerox the honor and right for its name to become a verb—to
“Xerox” something, as in to “photocopy” something—much the same
as Google’s search capabilities would, decades later, endow its name
with the verb “to Google” someone or something.
Of course, innovations in monetization are not limited to
technology companies like Xerox and Google. In its agreement to get
Euro Disney built in France, Disney decided to be paid a share of
Euro Disney’s revenues rather than a share of profits. This revenue
model insured that Disney would make lots of money from the
venture even when the venture (Euro Disney) lost money.

Building and Using Resources

To generate, deliver, and monetize benefits to customers, a firm
needs resources—it needs an organization with the right people in
the right roles and with the right competences performing the right
activities. These resources include brand equity, culture, data,
human resources, payment systems, personnel, relationships
(internal and external), reputation, trust, and funding, especially for
startups. For example, providing customers with convenient, safe,
and readily available transportation requires drivers with the skills,
trustworthiness, and cars, as well as the right organization to
coordinate the activities of these drivers. Innovation in the building
and use of resources can be in using novel coordination
mechanisms, selecting the types of people that have to run such
organizations, building and managing relationships with customers
or government regulators, and in the management of who controls
what resources when, and how. It can also be in the way ventures
or projects are funded. For example, rather than turn to family,
venture capitalists, or angel investors to fund its activities, a startup
may turn to crowdfunding in which anyone anywhere in the world
can directly invest in the venture. Innovation can also be in novel
ways of motivating employees. For example, Google encouraged its
engineers to use 20 percent of their time to work on projects of their
own choosing that they were not officially responsible for.
Delivering the products and services that embody customer
benefits requires access to distribution channels and shelf space, or
direct access to the right customers. Thus, innovation here includes
a move from owning brick-and-mortar resources to owning virtual
(online) resources. Witness Amazon’s building of virtual resources
such as shopping experiences including virtual shopping carts and so
on. Effectively, building resources can range from hiring the right
personnel to acquiring, analyzing, storing, and protecting massive
amounts of data on people, their activities, needs, and wants.
In any case, whether the novelty in a business model innovation is
in generating, delivering, monetizing the benefits to customers, or in
building the resources to pursue these activities, the resulting
innovation can make a huge contribution to performance. How much
of a contribution an innovation makes depends very much on the
choices that managers make in deciding which activities the
organization performs, why and how it performs them, when it
performs them, where it performs them, how novel the activities
should be, who performs which activities, and how the activities
collectively contribute to the organization’s success in achieving its
goals.7 Making these decisions effectively also depends on
understanding the relationship between business models and
performance—a crucial relationship that we now turn to.

Business Models and Performance

Managers and entrepreneurs who have overarching responsibility for
the performance of their organizations are very interested in the
relationship between a business model and its performance. This
relationship is presented in Figure 1.1 where an organization’s
business model activities—the activities that it performs to build and
use resources to generate, deliver, and monetize benefits to
customers—determine the benefits perceived by its customers, the
revenues generated by the benefits, the costs incurred, the
organizations, assets and liabilities as well as its market valuation.
An organization’s business model is, in turn, driven by its goals,
strategy, and environment (Figure 1.1) where a strategy is a plan to
achieve goals in the face of uncertainty, and an environment can be
internal or external. An external environment is made up of the
coopetitive (cooperative competitive) and macro environment, while
an internal environment is made up of factors such as culture and
internal events that influence employee behavior. (For more on these
important relationships, see Appendix A of this book.) Because the
relationships of Figure 1.1 can be very complex and yet critical for
the thriving or very existence of an organization, making decisions
about which activities to perform, why, how, where, and when to
perform them can be full of uncertainty and challenges. Luckily, a
thorough understanding of analytical techniques and core
management concepts can reduce these uncertainties and
challenges, improving managers’ likelihood of arriving at and
defending more informed decisions.8 What are these analytical
techniques and core concepts?

Figure 1.1 Relationship between strategy, business models, and

performance

Analytical Techniques
Analytical techniques are powerful tools for zooming in on answers
to strategically important questions—answers that often require
combining proven ideas in novel ways and/or using them in novel
ways. For example, by drawing on ideas from economics, Professor
Michael Porter zoomed in on the answer to an important question:
What determines the profitability of an industry? The ideas helped
him generate his very popular Five Forces framework—a model
which contends that five competitive forces from suppliers, rivals,
buyers, potential new entrants, and substitutes drive the profitability
of an industry and, therefore, the profitability of the firms in the
industry.9 The BCG Growth-Share matrix zooms in on the question of
how to allocate scarce resources among different business units,
exploiting the idea that scale drives down costs thereby raising
profitability.10 Also called frameworks, models, matrixes, algorithms,
and tools, analytical techniques can be qualitative or quantitative.
Note that although they usually start out addressing one question,
good tools often end up being adopted to solve many other
problems. Witness the many uses of Porter’s Five Forces framework,
the BCG Growth-Share matrix, Balanced Scorecard, and others.11
Effectively, good analytical techniques can help managers,
entrepreneurs, and potential investors zoom in on strategically
important questions and answers about how a firm’s business model
activities—together with its strategy and environment—determine
the perceived customer benefits, revenues, costs, market valuation,
assets, and liabilities of the business (Figure 1.2). Five such
analytical techniques are: business model builder frameworks,
valuation techniques, breakeven analysis, the Margin-SalesRate
matrix, and business model appraisal frameworks (Figure 1.2).

Figure 1.2 Analytical techniques for exploring business models

Business Model Frameworks
Recall that an organization’s business model is the set of activities
that it performs to build and use resources to generate, deliver, and
monetize benefits to customers. A business model framework is a
basic structure that spells out the building blocks (components) for
acquiring and using resources to generate, deliver, and monetize
customer benefits.12 Importantly, it is a shared language that can be
used to zoom in on strategically meaningful activities and their
consequences for value creation and capture. Thus, the framework
can be used to develop a new business model or paint a portrait of
an existing model. In Chapter 2, we will explore one such
framework. To distinguish it from other business model frameworks
such as the Business Model Canvas, we will call it the business
model builder (BMB).13 Made up of five components—value
proposition, market segments, revenue-cost model, growth model,
and capabilities—and the linkages among them, the BMB can be
used to explain and make predictions about how firms generate,
deliver, and monetize benefits to customers. Not only can the BMB
be used to paint a portrait of an existing business model or develop
a new model, it can also be used as a starting point for identifying a
firm’s strategy and other drivers of the firm’s performance. Thus, as
we will see in Chapter 2, the BMB can help managers,
entrepreneurs, and investors perform the analysis to take more
informed and defendable decisions, paint a portrait of an existing
business model, generate a new business model, identify a firm’s
strategy, and understand the actions of other firms.14 However, the
BMB and other business model frameworks are not equipped to
value a business. That is, the framework cannot be used to place a
monetary amount—such as the market valuations of Tables 1.1 and
1.2—on what a business is worth. Therefore, it cannot be used to
determine whether the super performers of Table 1.1, or any other
businesses, are overvalued or not. For that, we turn to business
valuation techniques.
Business Valuation Techniques
Business valuation techniques are used by investment bankers,
venture capitalists, fund managers, individual investors, and other
stakeholders to place monetary amounts on the worth of businesses,
stocks, bonds, and any other marketable assets. The techniques are
rooted in two core ideas. First, they are rooted in the idea that the
value of a business, stock, bond, or any other asset, is the net
present value of all expected future cash inflows, discounted at the
asset’s cost of capital. Thus, estimating the expected cash flows
from a firm—such as the super-performers of Table 1.1—can tell an
investor a lot about the monetary value of the firm, including
whether it is overvalued or not. Second, valuation techniques are
rooted in the idea that customers—including the investors who buy
into startups such as the unicorns of Table 1.2—are arbiters of
value.15 That is, customers “make the call” when it comes to placing
a monetary amount on what products, stocks, bonds, or any other
assets are worth. A reputable venture capitalist that scrutinizes a
startup and pays a certain amount for it is often the arbiter that
makes the call about what the value of the startup should be. In
Chapter 3, I build on these two core valuation ideas to sketch
several simple analytical techniques for valuing a business from a
strategic management point of view. Not only can the techniques be
used to understand how businesses such as the unicorns of Tables
1.2 can be valued, they can also be used to explore the question of
whether a firm is overvalued or not. These valuation techniques
depend on the use of numbers such as price/earnings rations, share
prices, earnings, and other numbers that are easily available to the
public.
As powerful as valuation techniques can be, they treat a firm as a
black box that takes inputs (investments) and transforms them into
earnings or other outputs. They do not look inside an organization to
understand the critical transformation process, and how or why it
can be expected to create and capture the value that can enable it
to earn the types of future cash flows suggested by or assumed in
valuations. (As we will see in Chapter 3, one exception is when
investors value a startup in the early stage.) The next three
analytical tools look inside the firm to understand how inputs are
transformed into outputs. These tools are the (1) breakeven
analysis, (2) Margin-SalesRate matrix (MSM), and (3) business
model appraisal frameworks such as the Value, Adaptability,
Rareness, Imitability, and Monetization (VARIM) framework.

The Breakeven Analysis and the Margin-

SalesRate Matrix (MSM)
A breakeven analysis is a simple but powerful tool that can be used
to explore the relationship between the point at which a business
stops losing money (and starts making money from there on), and
the prices that it charges, its fixed costs and variable costs. The
analysis gets inside an organization (black box), using profitability-
driving numbers—for example, contribution margins, fixed costs, and
sales rate—some of which may not be as readily available outside
the firm as the numbers used in valuation analysis. As we will see in
Chapter 4, this simple tool can provide a lot of useful information
about a business and a sense of its strategic direction. However,
taking strategic decisions often requires information about
competitors and potential alliance partners—information that a
breakeven analysis provides very little of. A Margin-SalesRate matrix
(MSM)—derived from breakeven analysis variables—can be used to
analyze the profitability of competing firms, products in a firm’s
portfolio of products, operations of the same business in different
countries, or different strategic business units. Managers can use the
tool to better anticipate and deal with the effects of competition and
change. Thus, the MSM differs from the growth-share matrix in that
it is more directly focused on profits, competition, and change than
the latter—phenomena that are more frequent in an innovative
environment such as a digital/sharing economy.
Like valuation techniques, both the breakeven analysis and the
MSM depend on the availability of reliable profitability numbers to
perform dependable analyses. What if a business, such as a startup,
has not yet started generating profitability numbers, or the numbers
that are available are not reliable? Can one still estimate the
profitability potential of a business model without reliable profitability
numbers? The answer is “Yes”—using the right business model
appraisal framework.

Business Model Appraisal Frameworks

Business model appraisal frameworks are tools for estimating the
profitability potential of business models. The Value, Adaptability,
Rareness, Imitability, and Monetization (VARIM) framework is a tool
for qualitatively estimating the profitability potential of a business
model—that is, a tool for appraising the profitability potential of a
business when there are no reliable numbers to use. As we will see
in Chapter 5, managers, entrepreneurs, and investors can use the
VARIM when there are no numbers to use in performing analyses, or
when there are numbers but a manager or investor wants to confirm
what the numbers say. (Trust but verify!) Like the business model
builder (BMB) of Chapter 2, the VARIM is a shared language for
zooming in on strategically important questions and ideas. However,
and importantly, the VARIM differs from the BMB and other business
model frameworks in that it explicitly incorporates the role of
competition and change in determining the profitability of a firm.
Other business model frameworks, such as the Business Model
Canvas,16 do not explicitly consider the role of competition and
change—two critical components in strategizing, especially in a
digital or sharing economy. Thus, the VARIM can help us explain why
one would expect, or not expect, firms such as the super performers
of Table 1.1 to continue to outperform their competitors, and why.
Importantly, because the VARIM is a qualitative framework, it relies
a lot more on management concepts, than the frameworks that are
rooted in numbers, to explain and make predictions about business
models. What are these concepts on which the VARIM and other
frameworks rely? We now explore six of these concepts that are
crucial in exploring business model innovation questions, especially
in a digital/sharing economy context.
Core Concepts for Business Model Innovation
Management concepts are proven ideas that can be used to explain
and make predictions about relationships and phenomena, or that
can be combined to build frameworks such as the ones sketched
above. For example, the concept of economies of scale can be used
to explain why firms with large market shares can be expected to
have lower per unit costs than their counterparts with smaller
market shares. It can also be used to explain why a firm with a low-
cost strategy would be interested in a large market share. Popular
management concepts include core competences, economies of
scale, first-mover advantages, network ties, open innovation, price
elasticity, organizational norms, social capital, social ties, sunk costs,
transformational leadership, and numerous others. Effectively, there
are many concepts that can be used to make and defend decisions.
However, for making business model innovation-related decisions—
especially in a digital or sharing economy—six core concepts stand
out: Network effects, multisided platforms, crowdsourcing, disruptive
innovations, complementary assets, and long tails. Understanding
these concepts can help managers and entrepreneurs not only to
better make, explain, and defend business model innovation
decisions in today’s economy, but they can also help management
scholars better understand and explain the outstanding
performances of the firms of Tables 1.1 and 1.2 above, and more.

Network Effects and Multisided Platforms

A technology, product, or service exhibits network effects if the more
people that use it, the more valuable that it becomes to each user.17
Facebook’s service exhibits network effects because the more people
that use it, the more valuable it becomes to each user since each
user is now more likely to find the type of person that he or she
would like to “friend” and/or interact with. A multisided platform is a
technology, product, or service that enables two or more groups of
users—that perform distinctly different functions—to interact directly
with each other.18 All the firms and unicorns of Tables 1.1 and 1.2
create and capture value using multisided platforms. For example,
Google’s business model is rooted in its multisided platform of the
users who conduct searches (on one side) and the advertisers who
value users’ attention (“eyeballs and ears”) on the other side. Many
multisided platforms exhibit network effects because the more
people that there are on side one, the more valuable that the side
becomes to the users on side two and vice versa. Ever since the
dot.com boom of the 1990s, network effects and the derivative
concept of winner-takes-all have been used to explain and make
predictions about which firm is likely to perform well and when.19 In
Chapter 6, I explore how and why multisided platforms and network
effects can be central to the competitive advantage of a firm in the
digital economy, and why some of the phenomenal performances of
the firms of Table 1.1 can be explained by the two phenomena.

Crowdsourcing
Another phenomenon that has the potential to help firms better
generate, deliver, and monetize benefits to customers—that may
explain some of the performances of Tables 1.1 and 1.2—is
crowdsourcing. In crowdsourcing, a firm gets a problem solved by
broadcasting it in the form of an open call to anyone anywhere that
wants to self-select and solve the problem, rather than having
someone who has traditionally solved similar problems (such as a
designated contractor or employee) solve the problem.20 For
example, rather than create the videos that run on its channels or
contract the task to designated producers, YouTube crowdsources
the task by letting anyone anywhere in the world who wants to
create videos for the firm self-select and create a video with no ex
ante contract for producing the particular video. Apple’s
crowdsourcing of app development—as we saw earlier—is another
example. In Chapter 7, I give crowdsourcing the full attention that it
deserves, pointing out the role that it can play in value creation.

Disruptive Innovations
Another concept that can be useful in explaining and making
predictions about firm performances is disruptive innovations.21 Many
of the super-performers listed in Table 1.1 achieved their
prominence by disrupting established firms, or are in the process of
disrupting established firms in some industry. For example, Apple is
often said to have “disrupted” the “dumb” phone industry with its
iPhone. Microsoft’s Windows operating system played a major role in
the disruption of minicomputers and mainframe computers by the
PC. Importantly, history suggests that these super-performers still
run the risk of being disrupted in the future. In fact, some scholars
think that the unicorns of Table 1.2 and many others are in the
process of disrupting many industries. Therefore, in Chapter 8, I
examine the opportunities and threats that disruptive innovations
can create for organizations and their business models—I provide
the background information for exploring disruption questions.

Complementary Assets
One interesting, but often ignored observation in the study of
disruptive innovations, is that not all the incumbent firms that are
attacked by disruptors fail. Incumbent firms with access to tightly-
held difficult-to-imitate complementary assets often profit from
disruptive innovations.22 Complementary assets are the resources
needed to commercialize an invention or discovery.23 They include
brands, distribution channels, marketing, manufacturing, shelf space
at stores, and complementary technologies. Complementary assets
can be critical to profiting from an invention. For example, RC Cola
invented diet cola but Coke and Pepsi made most of the money from
it because they had the superior brands, shelf space, distribution
channels, and other scarce but important complementary assets.24
In Chapter 9, I examine the role that complementary assets play in
the performance of firms in the face of innovation.

Long Tails
An interesting observation during the dot.com boom came from the
business models of two of the top market cap performers of Table
1.1. Professors Erik Brynjolfsson, Jeffrey Hu, and Michael Smith
observed that a significant portion of Amazon.com’s sales, at the
time, came from obscure book titles that were not found in brick-
and-mortar stores, rather than from the national bestsellers.25 After
reading the MIT working paper about this interesting observation,
Chris Anderson also observed that a lot of Google’s revenues at the
time came from the millions of obscure customers who each spent
very small amounts of money on advertising rather than from a few
very large advertisers each of which spent huge amounts.26 These
observations led Chris Anderson to use the phrase the long tail in
business and wrote the book explaining the role that long tails or
“market niches” can play in business modelshow aggregating the
many niches of a market can, in a digital economy, be more lucrative
than focusing on a few larger markets or hits.27 In Chapter 10, I look
further into the role that long tails play in the performance of firms
such as the overachievers of Table 1.1.

Relationship Between Business Models and

Strategy
Finally, as hinted earlier in this chapter, there is a strong relationship
between an organization’s business model and its strategy—a
relationship that can be crucial to understanding why some firms
attain and maintain a competitive advantage better than others.
Because of the significance of this relationship, I have dedicated
Appendix A to it. The appendix also distinguishes between strategy
as an attribute of a firm, and strategy as a discipline or subject
taught in business schools. I clarify the distinction by tracing the
evolution of strategy as a subject taught in business schools.
Readers with no prior knowledge of strategy may want to read
Appendix A before proceeding to Chapter 2.

Concluding Remarks
The overarching responsibility of many managers and entrepreneurs
is the performance of their organizations. The analytical techniques
and core business model innovation concepts introduced in this
chapter, and to be explored in more detail in later chapters, can help
such managers and entrepreneurs (1) perform the analyses to arrive
at more informed decisions, (2) explain to stakeholders how and
why they arrived at decisions, (3) lend credibility to decisions and
the people behind them, and (4) better explain and make predictions
about the performances of firms, especially in a digital or sharing
economy. The question is: How? To see how, consider someone who
has just been appointed to a position that is new to him or her—for
example, the position of CEO, member of the board of directors,
general manager, and so on—in which he or she has overarching
responsibility for the performance of the firm (e.g., in early 2018,
Uber, SoFi, and numerous others welcomed new CEOs and other
executives). Because the strategic decisions that such an executive
takes have a huge effect on performance, it is crucial that the
executive understands the firm’s business model, strategy, and their
impact on performance. Importantly, the resulting impact of any
potential strategic decision on the firm’s performance needs to be
examined very carefully. The following five steps—that are rooted in
the analytical techniques and core concepts of this book—can help
the executive with decision-making.

Step 1 Identify the Business Model

Because human beings are cognitively limited, it is not always
obvious to everyone what a firm’s business model really is. That is,
the set of activities that a firm performs to build resources and use
them to generate, deliver, and monetize benefits to customers are
not always very obvious to everyone. Thus, the first thing for the
new manager to do is to piece together the firm’s business model.
Because business model frameworks are shared languages that
people can wrap their minds around, they can be used to describe
how the firm builds resources and use them to generate, deliver, and
monetize benefits to customers. Therefore, the first step for a new
executive is to use the business model builder (BMB) framework to
piece together the firm’s business model. Chapter 2 is about the
BMB and how to use it to paint a portrait of a business model and
more.

Step 2 Identify Strategy

Recall that a strategy is a plan to achieve goals in the face of
uncertainty. Because firms do not always reveal their plans, may not
know what their plans are, or may not have any, a firm’s strategy is
not always obvious—not even to all seasoned executives of the same
company. Therefore, the second step for the new manager is to
identify his or her firm’s strategy. Chapter 2 shows how a firm’s
strategy can be identified, starting with a portrait of the firm’s
business model (painted using the BMB).

Step 3 Determine Performance

Because the overarching responsibility of the executive is the
performance of the firm, the third step is to determine whether the
firm is performing well or not. This is easily and quickly determined
using financial data such as share prices, revenues, profits, assets,
liabilities, and costs, as well as other data such as customer
satisfaction and so on.

Step 4 Determine What Drives the

Performance
After determining whether a firm is performing well or not, the next
step is to determine what about the business model and strategy
makes the firm perform well or not so well. This is a crucial step.
Making the connection from a business model and a strategy to
performance often involves using core concepts such as network
effects and multisided platforms (Chapter 6), crowdsourcing
(Chapter 7), disruptive technologies (Chapter 8), complementary
assets (Chapter 9), and long tail (Chapter 10). Making the
connection may also involve using analytical techniques such as
business valuation techniques (Chapter 3), breakeven frameworks
such as the Margin-SalesRate matrix (Chapter 4), and business
model appraisal frameworks such as the VARIM framework (Chapter
5).

Step 5 Brainstorm About the Impact of

Decisions on Performance
Before taking strategic decisions, it is crucial for a manager to
brainstorm about how the decision is likely to impact the
performance, given the business model, strategy, and, importantly,
how the latter two drive performance. The following sample
questions can guide the brainstorming: Is the decision consistent
with what has enabled the firm to perform so well? Given that the
firm’s performance is poor, how can one be sure that the decision
will help improve performance? Depending on the context, many
other questions may need to be examined. Again, the concepts and
frameworks of the book are critical to the brainstorming.

Notes
1 See the following for more definitions of business models: Massa, L., Tucci,
C., & Afuah, A. (2017). A critical assessment of business model research.
Academy of Management Annals, 11(1), 73–104. Magretta, J. (2002). Why
business models matter. Harvard Business Review, 80(5), 86–92. Johnson,
M. W., Christensen, C. C., & Kagermann, H. (2008). Reinventing your
business model. Harvard Business Review, 86(12), 50–59. Amit, R., & Zott,
C. (2001). Value creation in e-business. Strategic Management Journal,
22(6–7), 493–520. Baden-Fuller, C., & Morgan, M. S. (2010). Business
models as models. Long Range Planning, 43(2–3), 156–171. Timmers, P.
(1998). Business models for electronic markets. Electronic Markets, 8(2), 3–
8. Zott, C., & Amit, R. (2010). Designing your future business model: An
activity system perspective. Long Range Planning, 43(2–3), 216–226. Teece,
D. J. (2010). Business models, business strategy and innovation. Long Range
Planning, 43(2–3), 172–194.
2 For more on business model innovation, please see: Amit, R., & Zott, C.
(2012). Creating value through business model innovation. MIT Sloan
Management Review, 53(3), 41. Chesbrough, H. W. (2010). Business model
innovation: Opportunities and barriers. Long Range Planning, 43(2–3): 354–
363. Yip, G. (2004). Using strategy to change your business model. Business
Strategy Review, 15(2), 17–24. Massa, L., & Tucci, C. L. (2013). Business
model innovation. The Oxford Handbook of Innovation Management, 420–
441. Osterwalder, A., & Pigneur, Y. (2010). Business Model Generation. New
York: Wiley. Sosna, M., Trevinyo-Rodríguez, R. N., & Velamuri, S. R. (2010).
Business models innovation through trial-and-error learning: The Naturhouse
case. Long Range Planning, 43(2–3), 383–407. McGrath, R. G. (2010).
Business models: A discovery driven approach. Long Range Planning, 43(2–
3), 247–261. Gambardella, A., & McGahan, A. M. (2010). Business model
innovation: General purpose technologies and their implications for industry
structure. Long Range Planning, 43(2–3), 262–271.
3 Chesbrough, H. W., & Rosenbloom, R. S. (2002). The role of the business
model in capturing value from innovation: Evidence from Xerox Corporation’s
technology spin-off companies. Industrial and Corporate Change, 11(3),
529–555.
4 Stabell, C. B., & Fjeldstad, O. D. (1998). Configuring value for competitive
advantage: On chains, shops, and networks. Strategic Management Journal,
19(5), 413–437.
5 Ghemawat, P. (1986). Wal-Mart Stores’ Discount Operations. Boston: Harvard
Business School Press.
6 Chesbrough, H. W., & Rosenbloom, R. S. (2002). The role of the business
model in capturing value from innovation: Evidence from Xerox Corporation’s
technology spin-off companies. Industrial and Corporate Change, 11(3),
529–555.
7 Afuah, A. N. (2004). Business Models: A Strategic Management Approach.
New York: McGraw-Hill.
8 McMullen, J. S., & Shepherd, D. A. (2006). Entrepreneurial action and the
role of uncertainty in the theory of the entrepreneur. Academy of
Management Review, 31(1), 132–152.
9 Porter, M. E. (2008). The five competitive forces that shape strategy. Harvard
Business Review, 86(1), 25–40.
10 Morrison, A., & Wensley, R. (1991). Boxing up or boxed in?: A short history
of the Boston Consulting Group share/growth matrix. Journal of Marketing
Management, 7(2), 105–129.
11 Kaplan, R. S., & Norton, D. P. (1993). Putting the balanced scorecard to
work. Harvard Business Review, 71(5), 134–147.
12 Afuah, A. N. (2004). Business Models: A Strategic Management Approach.
New York: McGraw-Hill. Afuah, A., & Tucci, C. L. (2001). Internet Business
 Models and Strategies: Text and Cases. New York: McGraw-Hill. Osterwalder,
A., & Pigneur, Y. (2010). Business Model Generation. New York: Wiley.
13 Osterwalder, A., & Pigneur, Y. (2010). Business Model Generation. New York:
Wiley.
14 See also Osterwalder, A., & Pigneur, Y. (2010). Business Model Generation.
New York: Wiley.
15 Priem, R. L. (2007). A consumer perspective on value creation. Academy of
Management Review, 32(1), 219–235.
16 Osterwalder, A., & Pigneur, Y. (2010). Business Model Generation. New York:
Wiley.
17 Farrell, J., & Saloner, G. (1985). Standardization, compatibility, and
innovation. RAND Journal of Economics, 16(1), 70–83. Katz, M. L., & Shapiro,
C. (1985). Network externalities, competition, and compatibility. American
Economic Review, 75(3), 424–440. McIntyre, D. P., & Srinivasan, A. (2017).
Networks, platforms, and strategy: Emerging views and next steps. Strategic
Management Journal, 38(1), 141–160.
18 Parker, G. G., & Van Alstyne, M. W. (2005). Two-sided network effects: A
theory of information product design. Management Science, 51(10): 1494–
1504. Rochet, J. C., Tirole, J. (2006). Two-sided markets: A progress report.
RAND Journal of Economics, 37(3), 645–667. McIntyre, D. P., & Srinivasan,
A. (2017). Networks, platforms, and strategy: Emerging views and next
steps. Strategic Management Journal, 38(1), 141–160.
19 Eisenmann, T. R., Parker, G., & Alstyne, M. (2006). Strategies for two-sided
markets. Harvard Business Review, 84(10), 92–101. Eisenmann, T. R.
(2006). Internet companies’ growth strategies: Determinants of investment
intensity and long-term performance. Strategic Management Journal, 27(12),
1183-1204. Cennamo, C., & Santalo, J. (2013). Platform competition:
Strategic trade-offs in platform markets. Strategic Management Journal,
34(11), 1331–1350.
20 Howe, J. (2006). The rise of crowdsourcing. Retrieved on April 29, 2010 from
www.wired.com/wired/archive/14.06/crowds.html. Afuah, A., & Tucci, C. L.
(2012). Crowdsourcing as a solution to distant search. Academy of
Management Review, 37(3), 355–375. Afuah, A., & Tucci, C. L. (2013). Value
capture and crowdsourcing. Academy of Management Review, 38(3), 457–
460. Jeppesen, L. B., & Lakhani, K. R. (2010). Marginality and problem
solving effectiveness in broadcast search. Organization Science, 21(5), 1016–
1033. Poetz, M. K., & Schreier, M. (2012). The value of crowdsourcing: Can
users really compete with professionals in generating new product ideas?
Journal of Product Innovation Management, 29(2), 245–256.
21 Christensen, C. M., & Bower, J. L. (1996). Customer power, strategic
investment and failure of leading firms. Strategic Management Journal,
17(3), 197–218. Christensen, C. M. (1997). The Innovator’s Dilemma.
Boston, MA: Harvard Business School Press. See also: Christensen, C. M., &
 Overdorf, M. (2000). Meeting the challenge of disruptive change. Harvard
Business Review, 78(2), 66–76. Christensen, C. M., & Raynor, M. E. (2003).
The Innovator’s Solution. Boston, MA: Harvard Business School Press.
Christensen, C. M., Anthony, S. D., & Roth, E. A. (2004). Seeing What’s Next.
Boston, MA: Harvard Business School Press.
22 Tripsas, M. (1997). Unraveling the process of creative destruction:
Complementary assets and incumbent survival in the typesetter industry.
Strategic Management Journal. Summer Special Issue, 18, 119–142.
23 Teece, D. J. (1986). Profiting from technological innovation: Implications for
integration, collaboration, licensing and public policy. Research Policy, 15(6),
285–306.
24 Teece, D. J. (1986). Profiting from technological innovation: Implications for
integration, collaboration, licensing and public policy. Research Policy, 15(6),
285–306.
25 Brynjolfsson, E., Hu, Y., & Smith, M. D. (2003). Consumer surplus in the
digital economy: Estimating the value of increased product variety at online
booksellers. Management Science, 49(11), 1580–1596.
26 Anderson, C. (2006). The Long Tail: Why the Future of Business Is Selling
the Less of More. New York: Random House Business Books.
27 Anderson, C. (2006). The Long Tail: Why the Future of Business Is Selling
the Less of More. New York: Random House Business Books.
 PART II

ANALYTICAL TECHNIQUES
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His long ears were laid upon his back, which was suddenly
shrunken, as if by a shot in the spine; he pawed hastily with his fore-
feet; and, evidently, was badly hurt. Perhaps his sudden activity was
the result of severe fright, succeeded by a reaction—so reasoned
Kissie.
“Bunny, Bunny,” she cried, “you are mine—you are my captive.”
She was quite close upon him, and was drawing closer at every
spring. The rabbit was almost caught.
“Count not your chickens before they are hatched,” warns an old
saw. Perhaps it would have been better for Kissie to have recollected
it. But on she went, with no other desire or thought besides catching
the feebly-struggling animal.
To her surprise she drew no nearer, though the rabbit seemed
scarce moving, and Dimple was going at a smart gallop. Surprised
and nettled, she plied the whip, and once again she was on the
rabbit’s very heels.
Once again the rabbit suddenly darted away as lightly as a deer; but
only for a few smart leaps.
Again he seemed stricken by that odd impediment to his flight. It was
very strange—what could it mean?
For an hour the strange chase continued, the participants sustaining
their respective positions, while Dimple panted and lagged, and
Kissie alternately wondered and plied the whip.
It was a rare place for a protracted chase. For miles and miles
northward (the course they were following) the great, flat plain
stretched away—although level, always hard and solid.
The chase still continued, still repeating itself: now a spurt, and the
rabbit is near; Bunny springs once or twice and the sorrel pony is
behind again.
Once she thought she had heard a shout far behind; but intent upon
overtaking the rabbit, still kept on and looked not back.
At last the chase was terminated rather suddenly. Evidently
becoming wearied with his frolics, the rabbit cast a single look
behind, then to Kissie’s utter dismay, darted away at full speed.
She had seen frightened antelopes flee like the wind; she had seen
wild mustangs scour away in affright; but never before had she seen
a “jack-rabbit” on his mettle.
There was a sudden streak before her, a small white speck bobbing
up and down; and when Kissie reined in the pony she was alone.
The rabbit was far away.
“Duped! miserably deceived!” were her exclamations as the truth
forced itself upon her. “To think that insignificant creature had so
much reason in him. Why, he was only deceiving me, after all—a
mean trick to gratify his wicked little heart. I might have known it by
the way he acted. Well, I never; and what a laugh there will be when
I get back. Deceived by a paltry rabbit. I can imagine how they will
laugh. Father will never let me hear the last of it—neither will that
horrid Burt Scranton; only Sam will be my champion. And how that
horrid guide will grin, too—I declare it makes me provoked to think of
it.”
She pouted prettily and gazed where the sly animal had
disappeared. Then she spoke again:
“Well, it is of no use that I can see—my remaining here. It is ’most
supper-time and I will go back, without my boasted capture. So,
Dimple—tired, pet? We are going back.”
She turned the pony’s head around and slowly cantered off, still
musing over her defeat, without raising her head.
She had ridden a mile, perhaps, when it occurred to her she had
better discover the whereabouts of the train. Accordingly she reined
in, and raising her eyes, slowly scanned the prairie before her.
It was bare; the train was not in sight.
Thinking some intervening hillock hid them from her sight, she rode
some distance at right angles; but still no white-capped wagons did
she see.
She certainly must have become turned round; she must be
bewildered as to the direction she had been pursuing.
But no. She distinctly remembered seeing her shadow at her right
hand when pursuing the rabbit. She was certain of that—quite sure.
What easier than to ride back, keeping the shadow to the left of her?
She could not then go astray.
Christina was quick-witted. She had no sooner found the wagons
were not in sight when the above reflection ran through her mind.
She was impulsive, decided; and knowing this to be the only means
of again finding the wagons, started back, with her shadow over her
left shoulder.
“Man proposes, God disposes.”
She soon discovered that. No sooner had she started on the return
track, than, as if to vex and annoy her, a bank of snow-colored
clouds rose rapidly in the south. At the same moment a southerly
breeze came lightly over the plain.
As said before, Kissie was a girl of keen and quick perceptions. She
saw the bank of clouds arising; she knew if not breeding a terrible
squall, they were at least rolling on to obscure the sun; then what
were her chances of regaining camp?
She knew they were few; she knew the necessity of hard riding; and,
plying the whip again, rode at a gallop with the shadow still over her
left shoulder.
On the Southern plains, as with the Southern people, changes come
and go with great speed. It was so in the present case; for before the
sorrel pony had cantered a mile the heavens above were clouded;
the sun was obscured.
A loud, swishing noise accompanied the fleecy clouds, somewhat in
the rear of the advanced vapor. She reined in.
She was sufficiently versed in Southern life to feel no alarm at the
approaching wind. Had it been from the north—a norther—she would
have trembled; but, coming from the south, she felt no alarm; it was
nothing but a “field” of drifting vapor, and in the course of an hour the
sky might be clear again.
So, turning her pony’s hind quarters to the coming wind, she braced
herself and waited its approach.
It came with a roar, and striking Dimple, almost took her off her feet;
but the sturdy little beast spread her legs and stood like a rock.
Almost as soon as told it was past, rushing toward the north,
gathering strength every moment: and, beyond a steady breeze, and
a few floating particles in the air, the atmosphere was quiet.
Kissie looked at her tiny watch, and sighed: in another hour the sun
would sink below the horizon. What, then, would become of her if
she did not succeed in finding the camp?
“I must ride somewhere,” she said, growing seriously alarmed. “If I
haven’t the sun to guide me I must steer without it.”
So saying, she re-turned her pony’s head and rode away in a canter.
She had not gone far when she reined in with a very white face.
Covering her eyes with her hands, she bowed her head, and her
heart sunk.
“Oh, my God! what shall I do?” she moaned. “What shall I do?
Where shall I go?”
Well might she feel alarmed! well might she be terror-stricken; for in
her abstraction she had turned round twice.
 CHAPTER III.
ASLEEP IN THE LAND OF SILENCE.
“Turned round twice!” ejaculates the reader. “Why should she be
terrified at such a slight thing?”
For a very good reason, for example: blindfold a person and after
doing so turn him twice in his tracks. He then will be unable to tell
with any degree of certainty to which point of the compass he is
facing. So it was with Kissie. Though not blindfolded, she might as
well have been, and might as well have turned round fifty times as
twice. The flat plain was everywhere the same monotonous
expanse, nowhere showing any landmarks, by the slightest
depression or elevation.
No wonder she was frightened, even terrified. Had she been in a
settled country, she would only have experienced vexation and
discontent at being forced to spend the night on the prairie; but here
she was, far from any settlement, lost from her companions, and in a
hostile Indian country. She knew the latter to be fierce and
bloodthirsty, and was aware they would not scruple to commit any
outrage their cunning brains might suggest. She knew they were
predatory and gregarious, often rambling in bands of from a dozen to
fifty or a hundred. She knew also they were the fiends of the plains—
either Comanches or Apaches, dreaded alike by quiet ranchero and
courageous hunter.
Should she meet with them, what would be her fate—what her
doom? What—
At this point in her reflections Dimple pawed impatiently, and tossing
her head, snuffed the air; she was evidently fatigued and hungry and
was impatient at being kept at a standstill.
“Quiet, Dimple! you are tired, pet; you have had a hard gallop after a
day’s march. Dear, dear me; that I had never left them.”
But the pony was not very much fatigued. She was a pure mustang,
but recently captured and tamed, and could have galloped the entire
day without faltering.
“Oh, where shall I go—what shall I do? Oh, heaven! I would I had
never left them. Be quiet, I say, Dimple? what do you mean?”
The pony was stamping violently, and with tossing head was staring
over the plain. Mechanically Kissie followed his gaze.
Away on the distant horizon (the eastern one, though she did not
know it) she saw a solitary speck, moving slowly. It was that which
had caused the mustang’s alarm. It had evidently been in sight for
some time, for now she remembered the pony had been restless for
considerable time. It was some animal, perhaps a solitary horseman.
Indeed, by straining her eyes, she was almost certain it was the
latter, as she thought she could distinguish the necessary outlines of
a mounted man.
The object was a man, and mounted on a black powerful horse. It
was Pedro Felipe.
Had she known it was a white man, had she any reason to suppose
he was not an enemy, she would have at once spurred toward him;
but, knowing that numerous Indians were at all times scouring the
plains, she desired rather to give him a wide berth, fearing he was
one of that dreaded race.
She raised her whip, and striking the mustang sharply, was riding
away when a new object appeared on the horizon, opposite the
Mexican. Object? rather a number of blots, moving toward her. This
she could tell as they appeared stationary while they rose and fell,
like a galloping horse.
She had seen such objects before, and knew they were galloping
animals. Knowing that scarcely any animals frequented the plain,
from its sterility, she readily became aware that they were a band of
mounted men.
She felt her heart leap joyously; it was her friends. They had
doubtless become alarmed at her prolonged absence, and had
started in search of her. Filled with joy at the thought, she pressed
on, her fears at rest. Just then she looked for the far-distant, lone
rider—he was not in sight; he had vanished.
Suddenly she stopped the mustang, and a deadly pallor overspread
her countenance, a wild fear arose within her. She had counted
thirteen distinct objects moving toward her.
Her father’s party numbered seven—the one approaching numbered
thirteen; it could not be her friends—it could not.
Who were they? Surely they were mounted men, surely they were
not her friends; who could they be? They were coming, miles away,
directly toward her.
The truth flashed upon her, and her heart sunk like lead. Sitting
quietly in her saddle, she stared at them, drawing nearer every
minute. Then she became aroused. Wheeling suddenly she plied the
whip, and the wiry mustang, now somewhat refreshed, sprung away
at a long, steady gallop, and the blots behind scattered, collected
again, then rose and fell faster and shorter. The chase had
commenced—she was pursued by Indians.
It was now sunset, as nearly as she could judge, and the cloudy sky
overhead promised a brief, dark twilight, to be succeeded by a dark,
murky night. The rainy season was now drawing near, and for aught
she knew the clouds above might be the “advance-guard.” This, at
least, was in her favor.
Kissie was like her father—impulsive but cool. Looking back, she
calculated the distance between her and the flying savages. It was
nearly four miles. She looked at the sky and calculated that darkness
would fall in less than an hour.
“They will have to ride like the wind to overtake Dimple in an hour,”
she said, with a small degree of hope. “Till then, Dimple, fly; in an
hour we may be safe for the present.”
The mustang, as if cognizant of the importance of speed, tossed his
plucky head, then bending it down, “reached” like a quarter-horse;
his sensitive nose had warned him of the proximity of his former
hated foe—the red-man. Running without the incentive of whip or
spur, he stretched away; and behind came a dozen and one
Apaches, grim and resolved; they were on the war-trail.
At that hour a flock of vultures wheeling above, high in the zenith,
looked down upon a strange scene—at least for that usually
deserted plain. Directly beneath were a flying maiden and galloping
Indians—the latter in hot pursuit of the former; both mounted on fleet
horses, both riding at full speed.
A few miles to the west a solitary horseman was pursuing his way
northward, at a slow gallop. He was a Mexican—Pedro Felipe. At the
rate, and in the direction the maiden was riding, it would not be long
ere she would meet him—she riding north-westerly. Directly south
and nearly fifteen miles behind Pedro, rode a dark, ugly-looking man
on a black horse; and though the Mexican had left no visible trail,
this mysterious rider was following him, directly in his very tracks.
Riders on the savage-infested, weird plains generally look sharply in
every direction to avoid their dreaded foes; they generally, if alone,
keep close to timbered tracts; but this rider never gazed to the right,
left, or behind him—only keeping his gaze fixed toward the Land of
Silence.
In a south-easterly direction from him was a train encamped on the
Gila, for the night. All the work had been finished. The horses were
lariated at hand; the rude kettle was boiling merrily; the cook was
swearing and grumbling, as usual; but all was not quiet.
Ever and anon one of the several men lying lazily about would rise,
and shading his eyes, peer toward the north-east, as if in search of
something.
He was invariably unsuccessful; and, after anxiously gazing for
several minutes, would return, and talk in low tones to his
companions.
Then several would start up together and peer over the north-
western plain; then, muttering anxiously, would return and lie down
again, talking earnestly; something was wrong.
Even the cook, who was generally too hard at work, tired and surly to
pay attention to any thing outside of his “Dutch-oven,” would now
and then pause and look anxiously toward the north-west; it was
plain something was wrong.
It was twilight on the vast plain, north of the Gila. Now the two
principal parties had visibly changed their positions. The Indians
were quite near, having gained two miles in light—a vast gain; they
must have ridden like the wind, or the sorrel mustang must have
lagged.
The last was the case. From some hidden reason Dimple had lost
his swift run, and was going at a faltering canter—he was
unaccountably fatigued or injured. She could hear faintly the hideous
yells behind—a mile and a half distant.
At this, with her last hope giving way, she plied the whip.
The mustang obeyed, and for a few lengths galloped briskly, but
soon collapsed, and feebly cantered on. She felt terrified at the
thought of captivity and prayed for rescue.
It came. The twilight was almost over, then pitchy darkness would
shield her from her red enemies. The moon rose about three hours
after sundown—she could easily elude them until that time; then,
perhaps, she would be safe.
Another circumstance, far more potent, was in her favor. The soil of
the plain, baked hard after months of drought, left no impression of
the mustang’s hoof, consequently she could not be traced by the
hoof-marks. It was not probable, after having eluded them, that in
this wide, vast plain they could chance upon her again. So, if she
succeeded in escaping, for the present she was in comparative
safety.
She succeeded. The darkness swiftly gathered down over the plain;
she lost sight of her pursuers, though still hearing their hideous yells;
and they, in turn, lost sight of her.
Fifteen minutes later, on pausing and waiting a few moments, Kissie
heard them gallop by in the darkness, not ten rods away. Then she
turned and rode for an hour in an opposite direction; for the present
she was safe.
Alighting, she left Dimple to graze at will on the scanty herbage; and,
conscious the timid mustang would awaken her by stamping, should
danger come, lay down, and, completely worn out, fell into a light,
troubled sleep.
The chase had not amounted to much—the odds, large ones, being
in her favor; but while she had escaped from them, she had ridden
many miles further from her friends.
Alone in the desert, guarded by the wary, timid pony, she slept; and
the night was dark and gloomy in the Land of Silence—for she was
within its ghostly border.
 CHAPTER IV.
CIMARRON JACK.
As the first gray streaks of dawn slanted across the eastern horizon,
the little camp on the Gila was astir, and the members were bustling
about. Anxious faces they were; their movements were hurried and
nervous; and the general aspect of the camp was one of alarm and
anxiety.
There is evidently a great commotion in camp; ever and anon the
men scan the surrounding horizon; and one and all wear the same
anxious look; what is the matter?
The question is answered almost as soon as asked, as a cry arises
from one of the watchers. The others start to their feet (they are at
present bolting a hasty breakfast) and following their companion’s
gaze see a horseman coming along the river bank. He is quite near,
having been coming under the bank, and consequently unseen by
them.
“Simpson! the guide!” shout one or two voices; then two others add,
with a groan, “and alone.”
“And alone!” cry the rest, gloomily.
The guide was coming slowly, his mustang lagging with drooping
head, as if just freed from a hard, long ride. The guide, too, though
generally reserved, was moody, and wore a sort of apologetic,
shame-faced air.
Joel Wheeler and young Carpenter sprung to meet him.
“Have you seen her?” asked Mr. Wheeler, though knowing the
question was a superfluous one. The guide shook his head.
“Nor any trace of her?” hastily added Carpenter. Simpson slowly
shook his head again.
“Not at all—no sign?”
“Nary mark, sign, trail, trace—nary nuthin’. Blast the luck!” he added,
in sudden ire; “I’ve done rode over every squar’ inch of this kentry
sence last night, fur miles around. She ain’t nowhar ’round hyar,
that’s sartain shure.”
It was only too evident the guide spoke truthfully. His fatigued, travel-
worn steed, panting deeply, and his own wearied air, showed he had
ridden far and swiftly.
“Yer see’d no one, then?” asked Burt Scranton.
“Who sed I never see’d no one?” hastily retorted Simpson.
“You did.”
“I didn’t!”
“What did you say, then?”
“Thet I hedn’t see’d the lady—and I hevn’t.”
“You have seen some one, then?” asked Carpenter.
“Yes, I hev.”
“Whom?”
The guide brought his fist down on his knees:
“A sperrit.”
“A spirit? Nonsense! Where?”
“Up hyar, a piece—in a kentry called the Land of Silence.”
“Ah! the Land of Silence,” and Burt slowly shook his head. “I’ve
heerd on that place.”
The Canadians looked incredulous and grinned. Seeing them in the
act, the guide, nettled, burst out:
“Yes, and yer may jist bet yer hides I don’t want ter see it ag’in, now.
By thunder! ef I warn’t skeered I never was, and every one of ye’s
heerd of Simpson, the guide—every one of ye know ’t I ain’t no
coward, neither.”
“What did it look like?” asked Kit Duncan.
The guide slowly dismounted, and flinging his arm over his saddle,
said:
“It war the ghost of the Trailer.”
“The Trailer!” echoed Burt.
“Yes, the Trailer. Jest the same as he allus war, in his peaked hat
and black feather, jest the same as ever he war, armed ter kill, he
rode his old black hoss right by me, not ten feet off. Gee-whittaker! I
ked hev touched him.”
“Did he speak?” asked Louis Robidoux, in a quizzical manner.
“Thet’s the wust of it. When he got clos’t ter me, he turned his face
too-ward me. Gee-crymini! how white his face war.”
“What did he say?”
“‘You air ridin’ late, Tim Simpson.’”
“Is that all?”
“Gee-whiz! ain’t thet enough?”
“Why didn’t you shoot him?”
“I war too skeered—I know’d ’twar no mortal man.”
“How did you know?”
“Cuss yer! a woman’s nuthin’ ter yer on the ke-westion. How did I
know? Wal, the Trailer’s got a grudge ag’in’ me, an’ ef he’d been a
man don’t yer see he’d ’a’ plugged me afore I see’d him? He war a
fee-rocious man, thet Trailer, and ef he war alive when I met him,
he’d ’a’ sure plugged me. He didn’t, and thet shows he’s dead. Durn
it! I know he’s dead; Pedro Felipe killed him in the Land of Silence,
over a year ago. I see’d his skeleton onc’t.”
“Halloa!” exclaimed Burt, suddenly. “Look thar!” and he pointed down
the river. All eyes followed the direction.
A man mounted on a trim bay horse was seen advancing at a long,
swinging lope, quite near. He had drawn close during the dialogue,
unnoticed, and was coming boldly on, as if he feared no danger.
Simpson immediately recognized him.
“Cimarron Jack!” he cried. “Gee-menentli! hooray!”
The rider stopped and drew a revolver.
“Who is there?” he demanded, in a rich, musical voice, with a purity
of accent rarely seen on the southern plains.
“Tim Simpson, the guide!”
“Is that so? Hurrah! I’m Cimarron Jack, the tiger, and I’m a thorough-
bred from Tartary, I tell you.”
Belting his revolver, he struck spurs to his splendid bay, and the next
moment was heartily shaking Simpson by the hand, wrenching it
violently.
“I’m an elephant, I am!” he shouted, in stentorian tones, addressing
the entire party. “I’m a Feejee dancing-master, and where’s the man
that’ll say ‘boo’ to this chap? I’m the fellow who killed cock-robin!”
“You are jest in time, Jack,” said the guide. “We want yer ter help us.”
Nowhere in America do men come so quickly “to the point,” as on
the vast South-western plains. Meet a friend you have not seen for
years—he is in trouble, mayhap. You have scarcely time to greet him
before he informs you of his embarrassment, and requests your
immediate assistance. You instantly, if you are a “plainsman,” grant
his request—it is often policy to do so.
Cimarron Jack was a noted ranger and inexplicable man. While his
whole conversation was a series of boastings and vaunts, while a
more conceited man perhaps never breathed, he had one trait which
was the very opposite, paradoxical as it may appear—he believed
that others were as keen and shrewd as himself, and, when on the
war-path, believed his enemy as bold and crafty as himself—the
predominating trait of the shrewdest detectives in the world.
To describe him, his dress and manner, were a long and hard task.
Closely-knit, six feet and three inches in hight, with the arm of a
blacksmith, and the leg of a cassowary, he was a formidable enemy
when aroused, and he was a man of iron nerve. Withal, he was at
times as tender as a woman, and was always upright and honest.
Imagine a giant on a splendid bay stallion, with weapons of all sorts,
sizes and nationalities slung about him; with red, green, blue, gray—
in short, every color—feathers twisted into his clothing, long boots,
painted in different colors—looking like an insane person—imagine
this, and you are distantly acquainted with Cimarron Jack, the
ranger, hunter and Indian-fighter.
“What do you want with the king-pin of all rifle-shots? Show me a
star, and I’ll knock the twinkle out of it with a Number One buckshot.”
The party stared at him aghast. Never before had they seen such a
fantastical braggadocio. Had they never before heard of him they
would have deemed him a raving maniac, and would have given him
a wide berth. But every one who was in that country at that time—
184—, had heard of the far-famed Cimarron Jack.
“What do you want with the people’s favorite?” he demanded. “Come
—the court is impatient.”
Joel Wheeler stepped forward and said: “Sir, we are—”
“Don’t ‘sir’ me!” interrupted the ranger. “I’m Cimarron Jack, and I’m
the cock of the walk.”
“Well then, Cimarron Jack, my daughter strayed away last night and
we fear she is lost—indeed, we are positive she is. The country is
infested with Indians—”
“You can’t tell me any thing about Indians, for my education in that
direction is finished. Hurrah! three genuine cheers and a tiger for the
man that can’t be beat!”
Snatching his sombrero from his head, he swung it aloft, cheering
himself lustily. Then he replaced the hat and listened gravely.
“It is only too evident that Christina is lost. Cognizant that the country
is swarming with hostile Apaches and Comanches, we are very
much alarmed. You are a noted scout and tracker—I’ve frequently
heard of you; and if you will lend us your assistance in searching for
her, I will cheerfully pay any price you may ask.”
“Count me in—just score the grizzly-tamer on the rolls. But stop!” he
added, his face becoming grave, and addressing Simpson. “Is the
beauteous maid fair to look upon?”
“Ef thar ever was an angel on airth, she’s the one,” emphatically
pronounced the guide.
“Then hurrah! blood raw, blood raw! cut your palate out and eat it—
you are just shouting I will. I’m a thorough-bred, sired by Colossus.”
“Are you willing to go, then?” demanded Carpenter.
“You’re talking I am.”
“Well, just tell the men to hitch up the horses, Burt.”
Scranton turned to execute the order, and Mr. Wheeler called a
consultation of the principal men, Cimarron Jack, Carpenter and
Simpson, to decide upon the most feasible plan for recovering
Kissie. He was much alarmed. Although for years accustomed to
Kissie’s vagaries and erratic wanderings, he was now alarmed in
good earnest. She had often ridden away from the train on some
expedition, but she had always returned punctually. But now they
were in a country overrun with hostile, ferocious Indians, who were
capable of any fiendish deed, and quite unscrupulous enough to
execute it.
But there were other dangers near by, if not quite as potent. Here in
this hot, vast plain water was scarce, though the country was “cut
up” by creeks. These, however, were entirely dry nine months in the
year, and this season was uncommonly dry. Then, too, savage and
large beasts roamed the plain. The large gray wolf hunted in packs,
ready when hungry to follow and run down a human being; the
grizzly often came down from his cave in the mountains to prey upon
the animals in the plain; and many other animals, quite as ferocious
and cunning, roamed the illimitable waste.
Should she avoid all these dangers; should she elude the fierce
Apache, the gray wolf and grizzly bear; should she be fortunate
enough to discover water, a thing scarcely possible, there was
another danger to be dreaded—hunger.
She was not armed, and procuring food on the barren plain, without
the necessary weapons, was impossible. She could procure no food
from the herbage—it was scant, dry and short. She was undoubtedly
in a desperate predicament.
Mr. Wheeler revolved these several contingencies in his mind, and
grew sad and moody. Carpenter noticed his dejection, and though
anxious and sad himself, endeavored to cheer him.
“Come, cheer up,” he said, laying his hand upon his shoulder. “The
case may not be so desperate after all. While there is life there is
hope, you know.”
“Sam, I know you can sympathize with me—you are the only one
who can appreciate my agony, for it is positive agony. To think of the
dear child, heaven knows where, suffering and heart-sick, almost
distracts me. Sam, I fear the worst.”
“Come, sir, come; you must not talk like that. She only rode away
after a rabbit—she, mayhap, has become confused, perhaps lost.
But the sorrel mustang is sagacious, and doubtless ere this is
scenting back toward us. I know he will come back if she will give
him his head.”
“A thing she will not think of doing,” replied Mr. Wheeler. “If she is
lost, she is lost, indeed—there is no end to this vast plain.”
“But she must have left a trail, and with two such famous men as
Cimarron Jack and Simpson, we can surely trail her. Those two men
are prodigies, sir—they are famous even among their fellow-
countrymen. Cheer up, sir—see, they are ready to start. Shall I
saddle your horse, sir?”
“If you will, Sam. I am so perplexed I am fit for nothing.”
“I will do it, sir. Take my word for it, sir, we will soon find her.”
“God grant it!” was the fervent reply.
The result of the council was this: the guide, Cimarron Jack, Mr.
Wheeler, and Sam, were to ride toward the north-west, if possible on
Kissie’s trail. Burt Scranton and the teamster would follow with the
wagons. The trailing party would proceed moderately, while the
wagons would move at a much faster rate than usual to keep in
sight. This was done to avoid being separated by Indians, should
they meet with any. This arrangement (Cimarron Jack’s suggestion)
afterward proved a wise one. But more anon.
“Are you ready?” said Jack, vaulting into his saddle. “If you are,
follow the man who can thrash his weight in wild-cats with a ton of
grizzlies thrown in too to make the skirmish interesting.”
“Yer ain’t quit yer bragging yet, I see,” remarked the guide.
“Bragging! me brag? d’ye mean it? whiz! I’ll cut your palate out and
eat it—yes, I will, you know that yourself. Blood raw, blood raw! I’m
the man that never says ‘boo’ to a lame chicken.”
“Hyar’s her trail,” observed the guide.
Jack vaulted backward to the ground, examined it, swore an oath or
two, lit his pipe, boasted a little, then remounted and rode off on the
faint, very dim trail, with the wagons rumbling after; the search had
commenced.
The guide ever and anon raised his head and peered off into the
northern, purple-tinted distance, as if half afraid of seeing some
disagreeable object. However, he held his peace and relapsed into
his usual, but for some time, abandoned taciturnity. Must the truth be
spoken? The guide was alarmed.
 CHAPTER V.
A DEAD MAN’S GHOST.
On the day after Pedro left the Gila he arrived at the old robber
hillock. As he rode up to it, he mechanically looked for a skeleton he
expected to see there—the skeleton of the Trailer. To his surprise not
a bone of it was there, where he left the body.
Could the Trailer have come to life? impossible—he was killed
instantly. Pedro had shot him from behind, the ball entering his back
and penetrating to his heart. No—it could not be possible.
But the skeleton—where was it? of course the body had been
devoured by carnivorous animals—as a matter of course it had
been; but animals never swallow the bones—they should be there
still.
Pedro was perplexed and looked off over the plain, as if for an
answer. He got none. Everywhere, in every direction, it was the
same monotonous expanse—always yellow, dry and quiet, always
spectral and forbidding; he was in the heart of the Land of Silence.
“The skeleton—where in the world can it be?” he muttered, glancing
about. “Curse it, I begin to feel awkward and uneasy already. This is
a cursed quiet place—this plain; and such a name as it has, too; just
the place for spirits to roam about in. I am beginning to believe they
have tampered with the Trailer’s bones—I do, indeed. Ha! what’s
that?”
He had espied something white at a distance away—something
which looked dry and bleached, like bones long exposed to the
elements. He rode slowly toward it; it (or they) was a bunch of bones
clustered together, as if thrown hastily in a pile.
He took them one by one in his hands and narrowly examined them.
They were human, he could tell—might they not be the Trailer’s?
They were much too small, he thought, still one is deceived ofttimes
by appearances. The Trailer had been a large man—a giant; these
bones were rather small.
Still he knew he had not seen them when here a year ago—they had
not been there then. These bones were about a year old; that is,
exposed to the elements. A year ago he had killed the Trailer, the
last robber on the spot—the bones must be his.
“They are the Trailer’s—they must be,” he said, and idly kicking
them, mounted and rode back to the hill or mound.
To describe this singular place would be a long task, so we will skim
briefly over it. About forty feet long by twenty in hight, it was a mere
shell—probably a hiding-place contrived centuries ago. It was
entered in this manner by Pedro.
Scattered over the surface of the knoll were a large number of flat
stones. Lifting one of the largest of these, he hurled it against one
imbedded in the ground, dented in the form of a cross. The ground
suddenly gave way and disclosed an opening sufficient to admit a
horse.
It was a plank-trap; cunningly covered with earth, its existence would
never have been suspected by the uninitiated. It was hung on stout
leathern hinges fastened to two upright posts.
The hollow hill was divided into two chambers, one within the other.
The first was dark and was only lighted by the opening of the door.
The floor was the ground, the walls the hillside, the ceiling the
summit. The only furniture it contained was a huge water-bucket, a
rusty gun or two, several tattered blankets, and a resinous, partially-
consumed torch.
Pedro noticed this torch, and his eyes sparkled.
“Just where I left it a year ago—in this chink. Now I am certain I was
the last one here—now am I certain of finding the hidden treasure.”
He lighted the torch, and after looking out into the plain, started
toward the inner chamber. But suddenly stopping, he went back to
the entrance.