I really like this 2-minute explanation Stanford’s Entrepreneurship Corner: Steve Teig, Tabula – Right Time to Start a Company. He’s clearly focusing on tech companies and the web, but the principals apply elsewhere if you use your imagination.

http://ecorner.stanford.edu/embeddedPlayer.html?mid=3210&width=500

If for any reason you don’t see the video here, you can click this link to go to the original on Stanford’s scorner.