This chapter clarifies our understanding of the project-based firm (PBF) by sharpening the theoretical foundations of project capabilities. It emphasizes the differences between project capabilities that eliminate variance in project outcomes (to control costs and add value) and economies of scale that reduce costs across multiple projects. It also highlights how the different ways in which value is captured by project-based organizations can feedback to influence how these capabilities and scale economies are generated. This opens up new typologies of project-based organizations, with implications for theory and practice.