Note: This is a guest post by Karthik Shashidhar, a reader of the Platform Thinking blog and a Bangalore-based quant consultant. Karthik is a Resident Quant at the Takshashila Institution and is fascinated by the concept of liquidity, outside the financial markets, and particularly applied to platform markets. Kenya’s hugely successful payments platform m-pesa [...]
What happens when industries start moving towards platforms? Which kinds of firms manage the transition well and which ones get left behind? What are the key factors that drive success for a firm moving towards platforms. At SIBOS 2014 in Boston last week, I was invited to deliver a short keynote on applying Platform Thinking [...]
Note: This is a guest post by Barbara Thornton. Barbara attended my lecture at Harvard Business School in July and has been applying principles of Platform Thinking to her work with cities and municipalities. This post leverages the Magnet – Tools & Rules – Data framework that I first alluded to in my Harvard Business [...]
This is a guest post by Justin Mares, the co-author of Traction: A Startup Guide to Getting Customers. Get the first 3 chapters free here. You (or your team’s) engineering talents can get your startup traction directly by building tools and resources that reach more people. We call this traction channel engineering as marketing: [...]
When Uber was valued at tens of billions of dollars, there was significant criticism from valuation experts (Aswawth Damodaran, no less) and an equally compelling response from one of Uber’s earliest investors, Bill Gurley. One of the best things that emerged from these discussions (in conjunction with a back-of-the-napkin sketch tweeted by David Sacks, founder [...]
Earlier this week, I had an interesting tweet exchange with Giles Andrews, the founder of Zopa, one of the leading peer lending platforms. Clearly, Zopa and peer lending platforms of its ilk are going strong. The strong growth notwithstanding, they are a drop in the ocean of traditional lending models, as is often the case [...]
Airbnb was recently valued at an eleven figure sum, which overshadows all, except the largest hotel chains. The usual criticisms to tech valuations aside, the impact of Airbnb on the traditional hotel industry is definitely being felt. But why did the industry fail to spot this threat for so long? How does something like Airbnb [...]
If you’re running a tech startup, you’ve probably tried to (or would love to, if you could) do at least one of the following: – Get TechCrunch to cover you – Launch at SXSW Unfortunately, as launch channels go, the more unimaginative the channel, the less successful it is at getting you traction. This is [...]
First we went wild about social media disrupting the world of business communications and media. Then the Sharing Economy sprang up and we talked about how the traditional ownership model was getting disrupted. We’re looking at the 3D printer as the democratization of manufacturing much like Twitter and blogging democratized publishing and YouTube democratized broadcast. [...]
One of the most common misconceptions about running a platform business is that it’s all straight and easy once the initial chicken and egg problem of getting both producers and consumers is solved. Ironically, in an age where kicking off new platforms isn’t quite as difficult as it used to be, the most important platform [...]
I am pleased to announce that the first open Platform Thinking Workshop will be held in San Francisco on 12th June. The workshop is being held in partnership with 500Startups at their SF office. Tickets and Details available here. About the workshop How does one go about building the next Pinterest, Airbnb, Uber or Coursera? [...]
Welcome to the age of the zero-dollar marketing startup. WhatsApp, and earlier Instagram, have officially become a permanent part of startup lore for having built multi-billion dollar businesses without (reportedly) spending a dime on marketing. Meanwhile, Airbnb has grown from a hipster community of mattress-renters to the world’s largest provider of accommodations without spending even [...]
You become what you measure. From my experience working with clients across enterprises and startups, the most common reason for failure and inefficiency is the focus on convenient, but inappropriate, metrics. Your technology doesn’t determine the business you build. Neither does your organizational capability. The metric you optimize for is the single biggest factor that [...]
This essay is part of the ongoing series on The Fundamentals of Platform Thinking. A good part of my childhood was spent glued to the Telly playing Super Mario Bros. A generation that never swiped screens spent its childhood wielding joysticks and clicking on handheld controls. Try as she might, my aunt never understood what [...]
This is post #6 in the ongoing series on Platform Design Principles. Are you building the Airbnb for X, the Uber for Y or the Quora for Z? Well, then this article might just be for you. I work a lot with startups/enterprises building marketplaces and platforms to solve diverse problems. But these startups often [...]
This is post #5 in the ongoing series on Platform Design, and is probably the most foundational post for all the work on this blog. Twitter: You can use this to type 140 characters WhatsApp: Just like SMS but doesn’t cost much Airbnb: Rent out your spare mattress Uber: Just another taxi company [...]
This article is #4 in an ongoing series on the design of platform business models. What do Google’s crawlers, Uber’s drivers and Instagram’s selfie-clickers have in common? Or for that matter Elance’s freelancers, Dribbble’s designers and Twitter’s tweeters. In a world of platforms, they create the fuel needed to facilitate economic and social exchanges that [...]
This post is part of an ongoing series on the fundamentals of Platform Thinking. The natural purpose of a network is to connect. Fax machines, telephone networks, stock exchanges and credit card networks have done exactly that . With the internet, we now have a universal network that connects everyone with everyone (well, almost). [...]
This article is #2 in an ongoing series on Platform Thinking. What does the traditional world of manufacturing have in common with the way networked platforms work? How can a basic understanding of factory design help us change the way we think about designing internet platforms, marketplaces and social networks? I’ve written previously about the distinction [...]
2013 started with JP Rangaswami declaring it the year of platforms. It’s ending with a piece I wrote for WIRED titled “Platforms are eating the world”. A lot has happened in between. We saw the proverbial final nails in the coffin of an industry that has been tellingly transformed by platform business models with Nokia [...]
Excerpts from an interview with YourStory.com earlier this year. The original interview is available here. Also, Part 1 is available here. Disruption: What advice would you give to startups and entrepreneurs starting a business today? How can they identify industries that are ripe for disruption? The best way to identify an industry for disruption is [...]
Note: This article first appeared in Fast Company. I am pleased to have co-authored with TED Books Author Damon Brown. The Internet has powered the rise of a new creative class. Global reach, real-time feedback, and reputation building have redefined the creator. Today, the Instagram-wielding teen is as much a member of this burgeoning creative class [...]
Marketplaces are difficult businesses to get off the ground. A marketplace without buyers cannot attract sellers and vice versa. In fact, the infamy of this proverbial chicken and egg problem detracts entrepreneurs from the challenges that a marketplace presents after it has successfully gained adoption and is successfully matching buyers with sellers. After all, marketplaces for [...]
This article first appeared on Harvard Business Review. I’m delighted to have co-authored this with Mark Bonchek. We are moving from a world in which physical products are separate to one in which they are connected. Computers were just the beginning. Appliances and engines now send alerts when they need to be serviced. Cameras upload [...]
Note: A variation of this article appeared as an op-ed on The Wall Street Journal’s MarketWatch. This was co-authored with Geoffrey Parker (@g2parker, Tulane Univ.) and Marshall Van Alstyne (@infoecon, Boston Univ.). They currently serve as research scientists at the MIT Sloan School of Management. Nokia just sold to Microsoft. Blackberry announced that it is considering putting [...]
Online platforms work on principles similar to offline communities. The onset of crime and vandalism in a community can lead to large-scale abandonment. The same applies to online communities and marketplaces, especially as they grow in size. Network effects make a community more valuable as it scales. However, the onset of vandalism could make network effects work [...]
I was recently interviewed by YourStory, a leading Asian startup blog on how Platform Thinking changes the way we build businesses. The following post is the first part of my interview. This was first published here. —- Sangeet writes the blog Platform Thinking, which has been recommended by All Things Digital, GigaOm, Inc. Magazine and the HBS Centre for [...]
I’d visited MIT this summer for some research collaborations at the MIT Centre for Digital Business and for speaking at the Platform Strategy Conference at the MIT Media Labs, which attracted C-suite execs from leading technology companies, both as speakers and audience. This is the video of my talk where I explore key concepts of [...]
Social curation is a great way to scale any business relying on user-generated content. YouTube and Quora enable the community to create value through upvotes/downvotes and the ability to report abuse. Startups that rely on user generated content often scale when they unlock social curation. For all its benefits, social curation isn’t fool-proof. Curation may [...]
We often associate social networks with hyper-growth, a perception largely fostered by growth infographics of Facebook, Twitter and Pinterest that get shared all around. But not all social networks scale that easily. There are three patterns that I often see across the growth of most social networks (and most platform business models, for that matter). [...]
Startups need Traction. A startup which doesn’t get discovered doesn’t go anywhere. This is all the more critical for platform businesses which rely on their users to create value and network effects. In the specific case of platform businesses, Traction dictates the value that is created. A social network without enough users or a marketplace [...]
What is the single most important innovation that Facebook ever came up with? Before I answer that, let’s think of the real value for users on a social network. Social networks are a classic example of the platform business model where users create all the value and there is very little value until users come [...]
Amazon is entering India. The timing, and not the move in itself, catches the eye. 2010-2011 was a period of rampant funding and hazy valuation calculation for Indian e-commerce. Flipkart was widely celebrated as the first mover that got most things right. Amazon is, of course, coming to the party once it’s over and done with. Cash [...]
“A startup is a company designed to grow fast… The only essential thing is growth. Everything else we associate with startups follows from growth.” – Paul Graham Paul Graham differentiates between startups and new businesses on one particular parameter, the potential for scale and hyper-growth. A startup’s potential to achieve hyper-growth and rapid scale is largely [...]
You can’t invite people to a party and try to sell them stuff. Pretty much every starry-eyed startup that went after eyeballs gets it by now. Over the last seven years the web has moved away from a consumption medium (think NY times) to a creation-consumption medium (think Twitter, Facebook). But we’ve been very tardy [...]
Craigslist, that ugly set of electric-blue links that still stands around like an exhibit from the museum of early web design. Poor design and a general lack of features haven’t come in the way of the site’s popularity. Not only is the site an eyesore, it’s a regular destination for scammers and spammers, alike. How [...]
Startups often wonder why investors can’t see how viral they’re going to get. I met an entrepreneur yesterday who confidently stated that his product was going to grow ‘virally’ because it was the best in its category. That was essentially the optimism that powered the growth slide in his investor deck. (To see why this [...]
Note: This article was originally published on TheNextWeb Marketplaces are difficult businesses to run. Like all multi-sided platform businesses, they suffer from the classic chicken and egg problem: the technology has no value unless buyers and sellers are present and you can’t get the buyers on board unless you have sellers and you can’t bring in sellers [...]
Question: Is Amazon a Pipe or a Platform or both? Short Answer: It’s complicated! Long answer follows… Pipes and Platforms are two contrasting business models, as we noted in the last post. However, the internet itself is a platform on which others (you, me, web developers, app makers, everyone) create value. By virtue of this [...]
Why do most social networks never take off? Why are marketplaces such difficult businesses? Why do startups with the best technology fail so often? There are two broad business models: pipes and platforms. You could be running your startup the wrong way if you’re building a platform, but using pipe strategies. More on that soon, [...]
If you’ve been around the internet startup world for long enough, you’ve probably engaged in the user-customer debate at least once. Who’s the user? Who’s the customer? Who should we be focusing on? I’m going to start off a series of posts talking about the basic elements of Platform Thinking and this being the first, [...]
Marketplaces employ the platform business model by connecting buyers and sellers and enabling them to transact. I have written a lot about marketplaces in earlier posts on this blog. Nir Eyal and I have collaborated in the past and we got together again to make this post happen. Bill Gurley had written an interesting post [...]
Note: This essay was first featured as a guest post on Andrew Chen’s blog. It’s one of the best resources out there for internet startups. The proverbial chicken and egg problem of building a new social product is well understood among tech startups, and it’s been commonplace to follow two contrasting mechanisms for getting traction. Traditionally, startups [...]
Note: This essay was first featured on TheNextWeb Technology startups are disruptive because they are driven by a desire to solve an unsolved problem in a unique way and create new value. Most large and established companies, in contrast, are driven by a desire to defeat competition and protect their market turf. Consider the problem [...]
“What got you here won’t get you there.” Career advice that works equally well in the world of online platforms. The single factor that separates a successful platform from a failed one is the development of network effects. Most platform businesses fail because they never develop network effects. Social networks without users, content platforms without [...]
Network Effects and Platform enthusiast, Passionate about seeing network effects transform every industry and social system. This blog is about the counter-intuitive principles of building networked businesses.
