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 the obsession was all about. “All you do is click that one button all day. What do you get out of it?”
That one statement captures the brilliance of game design. I may have the lofty goal of saving the princess, I may get a kick out of crossing multiple levels, I may collect points and lives on the way. But all I was doing was clicking a button that would help me jump and stomp the evil turtles wherever I could. As long as I clicked that button at the right time, I would continue to derive value out of the game.
More recently Flappy Bird had the whole world in outrage when it got pulled out of the app store. As a set of actions that players take, Flappy Bird is pretty similar to Super Mario Bros. One or two simple actions that keep delivering value as long as they are performed well.
That’s the brilliance of game design. A large goal can be broken down into a set of simple actions for the users to perform repeatedly to obtain value from the game and progress towards the goal.
Platforms are designed in a similar fashion. You may want to create an online constantly-evolving encyclopedia but you’ve got to break it down into a set of repeated actions that users can perform. You may want to create the world’s largest travel marketplace and throw hotels out of business but it’s got to boil down to a set of simple actions for the users.
THE CORE INTERACTION
Every platform has a Core Interaction, a set of actions that producers and consumers on your platform perform repeatedly to gain value out of the platform.
You need creators to upload videos on YouTube and viewers to view it and upvote/downvote it. It’s an engine where all three actions are required. Any of these breaks down and the platform may fail to continue creating and delivering value in the manner that it originally intended to.
Wikipedia sounds complex but is essentially about starting a new article stub, adding content, editing content, reversing edits and viewing content. The various Calls To Action on the platform boil down to one of these.
The Core Interaction is a set of actions that you need producers and consumers to engage in repeatedly in order to derive value out of your platform.
There might be other actions that users perform, but the actions constituting the Core Interaction are the ones without which the platform would absolutely cease to exist.
THE ANATOMY OF THE CORE INTERACTION
So how do you design the core interaction?
Fortunately, the Core Interaction follows a common template across platforms. Most platforms have very similar actions being performed by producers and consumers.
Setting up a listing on a marketplace or adding content are examples of producer actions that occur repeatedly. Similarly, searching, consuming feeds and, in some cases, purchasing are consumer actions that may occur repeatedly. Additionally both producers and consumers may also engage in other actions like voting, rating etc.
All actions in the core interaction fall into one of the following buckets:
- Creation: In every interaction, there is at least one producer who creates value.
- Consumption: In every interaction, there is at least one consumer, who consumes value.
- Curation: To encourage good quality and quantity of value creation, as well as to ensure the right consumers consume it, you need some form of curation.
Let’s look at this with a few examples.
|YouTube (content platforms)||Upload video||Search, View video||Upvote/Downvote, Report Abuse|
|Airbnb (services marketplaces)||Create Listing||Search, View Listing||Rate Listing, Rate Lister, Report|
|Etsy (goods marketplaces)||Create Listing||Search, View Listing||Rate Listing, Rate Lister, Report|
|Facebook (social networks)||Create Status Update||Consume Feed||Like, Hide, Report, Unfriend|
|Wikipedia (collaboration)||Create stub, Add/Edit content||Search, View Article||Reverse Edit|
|Play Store (developer platforms)||Create and list apps||Search, Download apps||Rate apps|
|Paypal (payments)||Offer transaction option||Transact||Report fraud|
Irrespective of which type of platform we choose, we can distill it to a Core Interaction composed of these three types of actions.
The core interaction connects individual user actions with the overall purpose of the platform.
You need all three actions: Creation, Curation and Consumption to repeatedly occur for the platform to work properly.
If a platform fails at encouraging Creation, it breaks down. Imagine Uber’s drivers not showing up, Google’s crawlers taking the day off or Etsy’s sellers abandoning the platform. The consumption side would have nothing to get out of the platform and the whole business would break down.
If a platform fails at encouraging Consumption, there’s a different problem. There’s a lot of value created without anyone interested in consuming. This, in turn, discourages further Creation and breaks down the platform.
Finally, a platform that fails to encourage Curation gets loaded with poor quality and fails to stay relevant, useful and engaging, in turn leading to a mass exodus of users.
Hence, while running a platform business, one needs to ensure that all three actions are repeatedly performed across all interactions.
I use the word ‘creation’ and ‘consumption’ from the perspective of the Core Value Unit. Note that the act of Consumption on Airbnb refers to consumption of the listing, not of the service. Across platforms, irrespective of what is exchanged, the creation and consumption of the Core Value Unit remains constant.
VALUE UNITS AND INTERACTIONS
Short Note: I started this series referring to the Seed, the unit of value that is created on the platform. For Youtube, it’s the video, for Airbnb, it’s the listing and for Paypal, it’s the payment option. I wasn’t convinced that the Seed was the best name and followed that up with a readers’ survey to rethink this term. Most of you voted for the term “Core Value Unit” and the Seed found a new name there.
The actions of Creation, Consumption and Curation, and, indeed, the overall Core Interaction, are determined in relation to the Core Value Unit.
To design the Core Interaction, one needs to ask the following questions:
- For this platform, what is the Core Value Unit? What is the unit of information (and content) being created on the platform that defines value for its users?
- Who is the Producer?
- How does the Producer create the Core Value Unit?
- Who is the Consumer?
- How does the Consumer consume the Core Value Unit?
- How is the quality of the Core Value Unit determined?
So we start with the Core Value Unit, determine the producer and consumer in relationship to that and subsequently determine the actions that are performed in the Core Interaction.
CORE INTERACTION AND VALUE CREATION
We started by looking at Super Mario Bros. and the ability of a good game to create a complex outcome from a series of simple and intuitive user actions. Let’s flip the focus and view the Core Interaction from the platform’s perspective.
Imagine the evolution of a traditional business like a car manufacturer. The manufacturer lays out the process required to assemble and deliver a car. The manufacturer then designs the various actions required to get this process going and identifies which actions can be performed internally and which ones need partnering. Also, which ones need automation. Once the process starts working, the manufacturer hires a bunch of MBAs to crank out some excel sheets and optimize the process.
Pipes, traditional linear businesses, work by structuring a process and repeating it.
The same thing works here.
The core interaction is your formula for value creation, delivery and consumption.
An interaction, at its heart, involves value that is created and consumed on the platform. This cycle of value creation and consumption needs to be repeated for the platform to scale and repeatedly solve the problem it is meant to solve.
START WITH THE CORE
Identify your Core Value Unit. And design the Core Interaction around it. And as we observed in Essay #2, build the platform that enables the Core Interaction.
Rule of thumb: If you are a new platform and you’re designing for more than one core interaction, you’re toast!
THE IMPORTANCE OF DESIGNING THE CORE INTERACTION
We’re not in the business of building software!
We’re in the business of enabling interactions!
I’ve said this before on the blog and I will say it again. If there is one shift that is required of both startup developers as well as CXOs at large enterprises, it is this. All too often, we still view platform businesses as software businesses.
With network effects, the real value created on the platform isn’t the software. It is the value created in interactions enabled by the software. The value on 99Designs is created during the competitions, the value on oDesk is created during the actual sourcing and delivery of service by a service provider. And the value on YouTube is created by the videos that users upload, rate and watch.
If you’re building for network effects, you’re not building mere software anymore.
Platforms enable interactions among producers and consumers. As I mentioned in the second essay in this series, the design of a platform must be preceded by the design of the core interaction that it enables between producers and consumers. All too often, platforms fail because they create technology without taking into account the core interaction that is being enabled.
This is why the rest of this series starts right here; with the design of the core interaction!
On a networked platform, the Core Interaction is a set of actions that producers and consumers engage in repeatedly to derive value. Tweet
The core interaction on a platform connects individual user actions with the overall purpose of the platform. Tweet
Rule of thumb: If you are building a new platform and you’re designing for more than one core interaction, you’re toast! Tweet
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