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Best book on the subject by far!
18 de fevereiro de 2019
Platform Revolution: How Networked Markets Are Transforming the Economy and How to Make Them Work for You (Parker, Geoffrey G.;Van Alstyne, Marshall W.;Choudary, Sangeet Paul)
- Seu destaque na página 3 | posição 158-159 | Adicionado: sexta-feira, 9 de março de 2018 21:28:15
As we’ll explain, practically any industry in which information is an important ingredient is a candidate for the platform revolution.
A platform is a business based on enabling value-creating interactions between external producers and consumers. The platform provides an open, participative infrastructure for these interactions and sets governance conditions for them. The platform’s overarching purpose: to consummate matches among users and facilitate the exchange of goods, services, or social currency, thereby enabling value creation for all participants.
Platforms beat pipelines because platforms scale more efficiently by eliminating gatekeepers.
In their role as gatekeepers, universities can require families to buy the entire package because it is the only way they can get the valuable certification that a degree offers. However, given the choice, many students would likely be selective in the services they consume. Once there is an alternate certification that employers are willing to accept, universities will find it increasingly challenging to maintain the bundle.
Whereas the leanest traditional businesses ran on just-in-time inventory, new organizational platforms run on not-even-mine inventory.
This works for the new firms because there is spare capacity that can be brought to market through the assistance of the platform intermediary.
The effort necessary to individually verify credit- and trustworthiness is an example of the high transaction costs that used to prevent exchange. By providing default insurance contracts and reputation systems to encourage good behavior, platforms dramatically lower transaction costs and create new markets as new producers start producing for the first time.
Platforms beat pipelines by using data-based tools to create community feedback loops.
By contrast, traditional pipeline firms rely on mechanisms of control—editors, managers, supervisors—to ensure quality and shape market interactions. These control mechanisms are costly and inefficient to grow to scale.
Platforms invert the firm. Because the bulk of a platform’s value is created by its community of users, the platform business must shift its focus from internal activities to external activities. In the process, the firm inverts—it turns inside out, with functions from marketing to information technology to operations to strategy all increasingly centering on people, resources, and functions that exist outside the business, complementing or replacing those that exist inside a traditional business.
External resources don’t completely replace internal resources—more often they serve as a complement. But platform firms emphasize ecosystem governance more than product optimization, and persuasion of outside partners more than control of internal employees.
platform expertise has now become an essential attribute for business leadership.
Positive network effects refers to the ability of a large, well-managed platform community to produce significant value for each user of the platform.
Network effects refers to the impact that the number of users of a platform has on the value created for each user. Positive network effects refers to the ability of a large, well-managed platform community to produce significant value for each user of the platform.
Negative network effects refers to the possibility that the growth in numbers of a poorly-managed platform community can reduce the value produced for each user.
Demand economies of scale are the fundamental source of positive network effects, and thus the chief drivers of economic value in today’s world.
Two-sided network effects with positive feedback explain how Uber can afford to use millions of dollars of money from Bill Gurley and other investors to give away free rides worth $30 each. Uber’s coupons buy market share in a way that attracts a virtuous cycle of drivers and riders who will later pay full price to participate in the network.
Virality is about attracting people who are off the platform and enticing them to join it, while network effects are about increasing value among people on-platform.
A team of experts collaborating with the consulting and accounting firm of Deloitte published research that sorts companies into four broad categories based on their chief economic activity: asset builders, service providers, technology creators, and network orchestrators.
The focus on processes such as finance and accounting shifts from cash flows and assets you can own to communities and assets you can influence.
Platforms are designed one interaction at a time. Thus, the design of every platform should start with the design of the core interaction that it enables between producers and consumers. The core interaction is the single most important form of activity that takes place on a platform—the exchange of value that attracts most users to the platform in the first place. The core interaction involves three key components: the participants, the value unit, and the filter. All three must be clearly identified and carefully designed to make the core interaction as easy, attractive, and valuable to users as possible.
When designing a platform, your first and most important job is to decide what your core interaction will be, and then to define the participants, the value units, and the filters to make such core interactions possible.
in most cases, platforms don’t create value units; instead, they are created by the producers who participate in the platform. Thus, platforms are “information factories” that have no control over inventory.
As you can see, a focus on the value unit is extremely important if you’re running a platform. Deciding who can create value units, how they are created and integrated into the platform, and what differentiates a high-quality unit from a low-quality one are all critical issues,
Platforms must perform three key functions in order to encourage a high volume of valuable core interactions, which we summarize as pull, facilitate, and match. The platform must pull the producers and consumers to the platform, which enables interactions among them. It must facilitate their interactions by providing them with tools and rules that make it easy for them to connect and that encourage valuable exchanges (while discouraging others). And it must match producers and consumers effectively by using information about each to connect them in ways they will find mutually rewarding.
Unlike traditional pipeline businesses, platforms don’t control value creation. Instead, they create an infrastructure in which value can be created and exchanged, and lay out principles that govern these interactions. That’s what the process of facilitating is all about.
The derisive term bloatware has been coined to describe software systems that have become complicated, slow, and inefficient through thoughtless accretion of features.
a well-designed platform as consisting of a stable core layer that restricts variety, sitting underneath an evolving layer that enables variety.
The story of Internet-enabled disruption as we’ve witnessed it so far has occurred in two main stages. In stage one, efficient pipelines ate inefficient pipelines.
Business revolutions such as these embodied Andreessen’s vision of “software eating the world.” Today, having attained the status of a cliché, his vision needs an update: “Platforms are eating the world.” We’ve entered stage two of the disruption saga, in which platforms eat pipelines.
The interactions facilitated must generate a significant amount of excess value that can be captured by the platform without producing a negative impact on network effects. When that’s not the case, monetization may not be possible.
As we’ve discussed, a platform’s goal is not simply to pump up the numbers of participants and interactions. It must also take steps to encourage desirable interactions and discourage undesirable ones. Meetup’s monetization model helped it achieve exactly that. By discouraging organizers who weren’t serious about their objectives, the pricing mechanism created a culture of quality on the platform.
How can we generate revenues without reducing our positive network effects? Can we devise a pricing strategy that strengthens our positive network effects while reducing our negative network effects? Can we create a strategy that encourages desirable interactions and discourages undesirable ones?
As you can see, deciding whom to charge is a delicate balancing act. The need to monetize the platform must be carefully weighed against the friction invariably produced by imposing a cost. Deciding precisely where the system can afford to create some friction—and how much friction can be tolerated without crippling the growth of network effects—is no easy matter.
“You never take first money.” In other words, only after a value unit has been created and exchanged with results that are satisfactory to both the producer and the consumer should the platform business itself seek to capture a share of that value.
It might seem impossible for a platform to be both too closed and too open simultaneously, but Myspace managed the feat.
Curation usually takes the form of screening and feedback at critical points of access to the platform. Screening decides who to let in, while feedback encourages desirable behavior on the part of those who have been granted entry.
The king of coffee had violated three fundamental rules of good governance: • Always create value for the consumers you serve; • Don’t use your power to change the rules in your favor; and • Don’t take more than a fair share of the wealth.
Governance is the set of rules concerning who gets to participate in an ecosystem, how to divide the value, and how to resolve conflicts. To understand good community governance is to understand the set of rules for orchestrating an ecosystem.
The goal of good governance is to create wealth, fairly distributed among all those who add value.
In general, there are four main causes of market failures: information asymmetry, externalities, monopoly power, and risk.
In Lessig’s formulation, systems of control involve four main sets of tools: laws, norms, architecture, and markets.
The underlying principle: Give fast, open feedback when applying laws that define good behavior, but give slow, opaque feedback when applying laws that punish bad behavior.
As the story of iStockphoto suggests, norms do not arise in a vacuum. They reflect behaviors, which means that they can be constructed through the intelligent application of the discipline of behavior design. Nir Eyal, who has worked in both advertising and game development, describes behavior design as a recurring sequence of trigger, action, reward, and investment.
Markets can govern behavior through the use of mechanism design and various incentives—not money alone, but the trifecta of human motivations that may be summarized as fun, fame, and fortune.
Having a person’s name and email address on a membership list doesn’t promise success for a platform. What matters is activity—the number of satisfying interactions that platform users experience.
The BranchOut story illustrates a vital truth about the world of platforms. Just as platforms transform traditional value chains, competitive strategy, and management techniques, they also demand new forms of internal measurement.
Note the difference between this core metric and the core metric of the pipeline. Whereas a pipeline manager is concerned with the flow of value from one end of the pipeline to the other, the platform manager is concerned with the creation, sharing, and delivery of value throughout the ecosystem—some occurring on the platform, some elsewhere.
When one or a few platforms can dominate a particular market because of the power of network effects, they may choose to resist beneficial innovations in order to protect themselves from the costs of change and other disruptive effects.
In a world where data is widely described as “the new oil,” it’s clear that the issue of data ownership will need to be resolved through some combination of regulatory action, court rulings, and industry self-regulation.
At its core, the platform revolution is about using technology to connect people and provide them with tools they can use to create value together.