Welcome to Platforms, AI, and the Economics of BigTech by me, Sangeet Paul Choudary. You just clipped your first slide! Build platforms with an interaction-first, not a technology-first mindset! This was a fascinating insight for me, because as I watch the magnitude of scale that the likes of Uber and Airbnb are achieving, I had always put technology on the forefront. Platform Revolution: How Networked Markets Are Transforming the Economy―and How to Make Them Work for You, Matchmakers: The New Economics of Multisided Platforms, The Business of Platforms: Strategy in the Age of Digital Competition, Innovation, and Power, Platform Strategy: How to Unlock the Power of Communities and Networks to Grow Your Business, The Lean Marketplace: a Practical Guide to Building a Successful Online Marketplace Business, Modern Monopolies: What It Takes to Dominate the 21st Century Economy. He has led executive education and strategy workshops for business leaders and policymakers across the world and runs an online learning programme, Platform Playbook , for enterprises and startups. After viewing product detail pages, look here to find an easy way to navigate back to pages you are interested in. Written by three of the most sought-after experts on platform businesses, Platform Revolution is the first authoritative, fact-based book on platform models. Enter your mobile number or email address below and we'll send you a link to download the free Kindle App. This can be overcome by designing the conditions for sparking interactions. Re-imagine your business for platform scale The mechanism by which these new business models scale so rapidly. Sangeet Paul Choudary is the CEO of Platform Strategy Labs. Your recently viewed items and featured recommendations, Select the department you want to search in, Platform Scale: How an emerging business model helps startups build large empires with minimum investment. Six core concepts for successful platform business model design 1. Solve chicken and egg problems Platform business models face an all too familiar catch-22 chicken and egg problem on the way to scaling. A compelling read. Platform Scale is a book about unlocking the scale advantages that are possible in today's connected world. Platform Scale lays out a structured approach to designing and growing a platform business model and addresses the key factors leading to the success and failure of these businesses. Platforms are so powerful because they enable efficient interactions, create excess value and are able to scale rapidly. Choudary is also credited with proposing the idea of the core interaction as the central focus of value creation on platform business models, presented in his books Platform Scale and Platform Revolution. He is the co-author of Platform Revolution and the author of Platform Scale. The answers lie in using the old to interpret the new, Platform strategy involves 3 primary priorities, aligned with the three layers of the platform stack – pull, facilitate, match, Two critical factors will determine the success of a company in the on-demand economy: multihoming costs (ease of switching between platforms) and interaction failures, Best way to launch a platform business at a conference is to ensure that the core interaction on the platform is organically embedded into the conference experience and that it fits in with the activity at the event, A dense and extremely insightful book on how to design, think about, build and spread successful platform companies. In effect, pipes were designed to enable the flow of value in a straight line, Three forces today are driving a whole new design for business, platforms – increasing connectedness, decentralized production and the rise of AI. Platform Scale lays out a structured approach to designing and growing a platform business model and addresses the key factors leading to the success and failure of these businesses. Six core concepts for successful platform business model design 1. But disruptive challengers are increasingly moving away from selling commodities to monetising data. It represents supply or inventory created on top of the platform and without this, the platform has very little value in and of itself, For network/marketplace/community-dominated – goods, standardized services, non-standardized services, Data dominated – data helps the platform become more efficient overtime, data itself is the source of value, To increase platform scale, focus on increasing the quality and quantity of core value units on the platform. In the meantime, tell your friends! Book's just as good as the feedback claims. Platform Thinking Labs; First Edition (September 15, 2015), In-depth coverage with case studies and strategy patterns for designing platform businesses that scale, Reviewed in the United States on February 22, 2016. Since 2012, Sangeet has led executive education and strategy worshops at enterprises around the world, including 35 of the Fortune 500. A great book for anyone interested in learning more about startups and scaling. The lack of an index is also very frustrating. B ack in 2007 the five major mobile-phone manufacturers—Nokia, Samsung, Motorola, Sony Ericsson, and LG—collectively controlled 90% of the industry’s global profits. Re-imagine your business for platform scale The mechanism by which these new business models scale so rapidly. Value is derived from charging one side to access the other, charging a third party for advertising, charging producers and consumers for premium tools and services, charging consumers for access to high quality, curated producers and charging producers for an ability to signal high quality, The TRIE Framework – tools and rules, interaction, experience, Platforms allow the users to shape their own experience and not just accept the maker’s ideas, Platforms must allow for emergent behavior to arise, some of which may redefine the architecture and lead the platform in entirely new directions, Everything old is new again! Prime members enjoy FREE Delivery and exclusive access to music, movies, TV shows, original audio series, and Kindle books. Designed Santander's global leadership transformation program, based on my books Platform Revolution and Platform Scale, for the top 1000 leaders of the organization. Sangeet is the co-author of the international best-seller Platform Revolution, ranked as must-read book by Forbes, an international best-seller by 800CEOREAD, a #1 new release on Amazon, and a top CEO read by Huffington Post. Sangeet Paul Choudary. Over the last decade or so, we're seeing the emergence of a new form of scale. Whether platforms are connecting sellers and buyers, hosts and visitors, or drivers with people who need a ride, Geoffrey G. Parker, Marshall W. Van Alstyne, and Sangeet Paul Choudary reveal the what, how, and why of this … Join 20,000+ subscribers getting exclusive content, early access to new research and frameworks, and more. He frequently advises the leadership of Fortune 500 firms and has been selected as a Young Global Leader by the World Economic Forum. This is an invaluable handbook for anyone involved in building a digital business, especially in consumer tech. Virality is a design problem, not an optimization problem. Design viral engines Understand the drivers of viral growth in a world of networks and apply the viral canvas design-first approach to viral growth. In his highly informative book, Platform Scale: How an emerging business model helps startups build large empires with minimum investment, Choudary lays out a thorough blueprint of what it takes to reimagine your business model. Interactions must be executed smoothly and in a manner which kick-starts the next interaction organically, Achieving platform scale requires the ability to scale value creation to scale value exchange – the ability to scale production and consumption simultaneously – and to repeat the two so that each reinforces the other, 5 drivers of platform scale – minimal marginal costs of production and distribution, network effects powered by positive feedback, behavior design and community culture, learning filters, virality, Community management is the new human resources management, Liquidity management is the new inventory control, Curation and reputation are the new quality control, One of the platform’s main focus is limiting poor behavior and interaction risks, Quality control (screening, curation) is vital. 2. Finally, only by focusing on the core interaction can a platform know what data it needs to capture, The core value unit is the minimum stand alone unit of value that is created on top of the platform. 0 likes. If you're a seller, Fulfillment by Amazon can help you grow your business. We are not in the business of selling products and services. I very much look forward to reading Platform Revolution. Reviewed in the United Kingdom on January 10, 2019. Choudary explains how technology, democratization of connectivity and rise of data-driven decision making systems are enabling a new type of business model – platforms. The rise of Platform Cartels in a post-Covid world How Covid19 contact tracing and misinformation are driving the rise of cartels in the platform economy Sangeet Paul Choudary Apr 30 Platform Scale lays out a structured approach to designing and growing a platform business model and addresses the key factors leading to the success and failure of these businesses. Over the last decade or so, we're seeing the emergence of a new form of scale. This shopping feature will continue to load items when the Enter key is pressed. Understand the shift in thinking needed to manage businesses with platform scale and the impact of network effects, virality, behavior design and data. One of the best books I've read this year. It's a brilliant and well structured guide, very relevant to me as a entrepreneur, but I am not without my reservations. Like “The ability of a business to scale is determined by its ability to aggregate the inputs to business – labor and resources – and coordinate them efficiently toward value creation and delivery Sangeet Paul Choudary Author: Platform Revolution, Platform Scale | Featured twice in HBR Top 10 Must Reads | Advisor to Fortune 500 Boards/C-Suite | WEF YGL New Top VIDEO CREATORS VIDEO VIEWERS Videos. Please try again. Designed Santander's global leadership transformation program, based on my books Platform Revolution and Platform Scale, for the top 1000 leaders of the organization. Explains the mechanics of how and why some platforms take off and others don't. The challenge now is to put it into practice. Add all three to Cart. From understanding the network effect in this type of business, to grasping the infrastructure that's needed to allow transactions to take place platforms, and then leveraging data to provide greater value within the ecosystem. Great read for anyone building a platform. Since 2012, Sangeet has led executive education and strategy worshops at enterprises around the world, including 35 of the Fortune 500. The core unit – message is typically the core value unit. Value is produced upstream and consumed downstream, creating a linear flow of value, much like water flowing through a pipe. Platform Scale: How an emerging business model helps startups build large empires with minimum investment (English Edition) eBook: Choudary, Sangeet Paul: Amazon.nl: Kindle Store The recipient, if interested, then joins and becomes a sender and starts the process over. Great book having initially read David S Evans Platform Economics this book has been a great extension of the techniques to get a platform market place of the ground. Plug and play: Producers can ‘plug-in’ and create on top of a platform. To get the free app, enter your mobile phone number. He is the co-chair of the MIT Platform Strategy Summit and an industry advisor to the Global Platform Data Project at Stanford University. When consumers ‘plug’ into a platform, the platform serves them what is more relevant for them. Click to share on Twitter (Opens in new window), Click to share on Pocket (Opens in new window), Click to share on Facebook (Opens in new window), Click to share on LinkedIn (Opens in new window), Click to share on WhatsApp (Opens in new window), Click to share on Pinterest (Opens in new window), Click to email this to a friend (Opens in new window), Choudary explains how technology, democratization of connectivity and rise of data-driven decision making systems are enabling a new type of business model – platforms. Sangeet Paul Choudary is the CEO of Platform Strategy Labs. Platforms primarily benefit not from internal production but from a wider source of open co-creation and open market interactions. This book has been hands-down the best resource for our platform to date. One of these items ships sooner than the other. the Platform Canvas and Platform Stack. Subscribe. Platforms are a fundamentally new business model, different from Pipes (as illustrated in Platform Scale and Platform Revolution). Useful book, but with reservations. There is a lot of detail to take in with this book and I just find frameworks (with additional notes) easier to recall information rather than having to refer to the book all the time. I enjoyed reading the book, learned a lot. Choudary is appointed as an external expert on several Forbes 2000 boards and committees, including the ING Bank's Global Innovation Council and Grupo Pao De Acucar's Statutory Committee. Detailed and in depth, this book gives practical insights into platform businesses well illustrated with examples. Spreadable unit – what is the minimum transferable unit on the platform that one can move on an external network? Go Premium and get the best of Blinkist . Platform Scale by Sangeet Paul Choudary. Summary. Bring your club to Amazon Book Clubs, start a new book club and invite your friends to join, or find a club that’s right for you for free. As author of the books, Platform Revolution and Platform Scale, Choudary said incumbent businesses of today run on a 'pipeline' structure, meaning that company's simply create products to sell to customers. Six core concepts for successful platform business model design 1. Reviewed in the United States on January 14, 2016. Take into account: Sender incentives, low friction in creating core value units, high percentage of producers, spreadable core value units (triggers an interaction on an external network), plays on the producer-as-sender dynamic, the spread of the unit helps to complete an incomplete interaction), External network – choice of network which takes into account relevant interactions, relevant connections, relevant look and feel, add value to users on this external network, create an unfair advantage and make integration as easy as possible, Recipient incentives – unit should serve as a compelling pitch to the platform and a call to action embedded within the unit, 4 key optimization priorities for achieving sustainable viral growth, Send: maximize outflow of units from the platform, Spread: ensure that units spread on the external network, Click: maximize clicks on an external network, Producers never spread the word about the platform, they merely spread the word about their creations, Platforms that succeed with viral growth reward users with accelerating social feedback, Network effects can work against platforms if higher adoption gets in the way of interaction efficiency and repeatability, reducing interaction quality. He frequently advises the leadership of Fortune 500 firms and has been selected as a Young Global Leader by the World Economic Forum. Six core concepts for successful platform business model design 1. In 2015, Choudary wrote the book Platform Scale: How an emerging business model helps startups build large empires with minimum investment. Re-imagine your business for platform scale The mechanism by which these new business models scale so rapidly. Platform Scale provides some excellent frameworks to work from for designing platforms, Reviewed in the United States on July 12, 2016. Reviewed in the United States on February 24, 2016. Small user bases with thriving interactions trump large user bases with low activity, Solve a pain point for a niche segment, target a micro-market where small is good, leverage existing interactions in the micro-market, find a micro-market that encourages spread, find a micro-market that is representative of the final market, a micro-market may be a thin-sliced use case, make a two-sided market one-sided, A platform can scale well only if it encourages interactions within a small user base before attracting a large number of users, Maximizing overlap between consumers and producers, Getting the harder side in first (through incentives), Five design principles for solving chicken and egg problems, Finding a compelling bait to start the loop, Ensuring there is no friction in the feedback loop, Minimizing the time it takes for the startup to reach critical mass, Incentivizing the role that is more difficult to attract, Staging the creation of two-sided markets, Bump – non-sustainable exposure such as PR, advertising and events; important for initial traction, Engines – an internal engine of growth and designed to grow as a consequence of usage, Also needs to create the hooks and motivations that will enable and incentive users to expose the offering to others, every time they use it, Virality and word of mouth are two names for the same phenomenon – virality a consequence of users using the platform, not loving the offering. Unable to add item to List. Sangeet Paul Choudary is the best-selling author of Platform Revolution and Platform Scale and his work on platforms has been selected by Harvard Business Review as one of the top 10 business ideas for 2017. I first wrote about the Platform Stack last year on my blog, and subsequently used it as a core framework in my first book, Platform Scale. Yet, most new platform ideas fail because the business design and growth strategies involved in building platforms are not well understood. HOSTS TRAVELERS Listings. TWEET CREATORS TWEET READERS Tweets. Platforms need to ensure that access and creative control, as well as curation and customization, scale well as the platform scales, Platforms must encourage cross-cluster interactions as well as cross-cluster incentives, Platforms aren’t truly software but they are eating the world – efficient social and business interactions, mediated by software, Value creation still dependent on aggregation, but not of labor or resources. 0 likes. Without clarity on this, one can waste a lot of time testing irrelevant hypotheses and optimizing poor design. To calculate the overall star rating and percentage breakdown by star, we don’t use a simple average. Reviewed in the United Kingdom on January 20, 2016. The keys to platform scale lie in simplifying each constituent action in the core interaction, Information exchange has 3 components – The producer creates a core value unit, the consumer sets up a filter of some combination of overlap and data, the value unit that best passes through the filter is served to the consumer (based on good data and filters). From the concept of the architectural framework (network-marketplace community, infrastructure or data) stack, to the platform canvas concepts, he gives specific case studies and examples to support. Instead, they build a platform on which others can create and exchange value. The program is currently being scaled to more than 100,000 employees across the organization. He is ranked among the top 30 emerging thinkers globally (2016) by Thinkers50 Radar, and his work on platforms has been selected by Harvard Business Review as one of the top 10 management ideas globally for the year 2017. Now customize the name of a clipboard to store your clips. This ability to drive interactions through a plug-and-play infrastructure is a defining characteristic of platform scale, Business model transition from pipes to platforms, Choudary calls traditional companies like manufacturing, “pipes.” Pipes build products or craft services, push them out, and sell them to customers. The concepts in the book are in-depth and repeated throughout to reinforce the framework he lays out. All design decisions should ensure the repeatability and sustainability of the core interaction that the platform enables. 3. The big misconception of platforms He has written for several leading publications such as TechCrunch, Forbes, Wall Street Journal and Wired. Today's massively scaling startups - which rapidly grow to millions of users and billions in valuation - do not sell a product or service. Rather, the ecosystem is the new warehouse, supply chain and scale through network effects. Recipient incentives – why will a non-user on an external network convert to a user on the platform? The book content (15 minutes read) What’s in it for me? What is Blinkist? Platform Scale lays out a structured approach to designing and growing a platform business model and addresses the key factors leading to the success and failure of these businesses. The platform canvas is a framework for makers to build interaction-first platform businesses and includes the value-creating interaction, the platform that enables the interaction, a mechanism for value capture, enablement of a plug-and-play business model  through channels (websites and apps) and access control for producers and filter creation for consumers. Instead, our system considers things like how recent a review is and if the reviewer bought the item on Amazon. The external network – units spread on an external network, connecting people, External network – Where will the unit from the platform meet current non-users, The recipient – recipient on the external network interact with the unit and is brought back to the original platform. Solutions to the chicken and egg problems have a few defining characteristics: Breaking the vicious cycle – platform should have standalone value, users to derive value even without other users, The standalone mode, for producers, should encourage the creation of value units on the platform, which can then be used to pull in the consumption side, Faking initial supply may often help kick start network effects (YouTube had pirated content early on) – seeding and weeding, seeding demand, seeding supply, Identifying a group of power producers and providing them with tools and incentives to better “harvest” their following can solve the chicken and egg problem very effectively, Get more difficult side on board through curation and incentives, Often, the solution to finding adoption lies in providing backward compatibility with existing solutions, Focus on value-creating interactions and then scaling those interactions instead of focusing entirely on scaling the user base. Sorry, your blog cannot share posts by email. As author of the books, Platform Revolution and Platform Scale, Choudary said incumbent businesses of today run on a 'pipeline' structure, meaning that company's simply create products to sell to customers. Understanding the players participating in the interaction and their motivations helps us design the actions and rewards that create pull on the platform. As Founder of Platformation Labs, and author of two bestselling books Platform Revolution and Platform Scale, Sangeet Paul Choudary is best known for his work on platform economics and network effects. Filter can be point in time (search) or cumulative (taking account of past history or behavior) or some combination, Choice of the overall interaction space – connection, content, clout, coordination, competition, culture and code, Production incentives – tools/access/both, simplify production process, great curation, clear, democratic and equal access path to the top, great conversion rates, good feedback mechanisms, removal of skill, time/effort/investment, resource, access barriers (removal of frictions), Frictions can sometimes be useful when trying to discourage the repeatability of undesirable interactions and can indicate quality, superior signaling or a barrier of some sort, Building long-term cumulative value – reputation, influence, collections, learning filters, 7 Cs of Trust – confirmed identity, centralized moderation, community feedback, codified behavior, culture, completeness, cover, Ownable interactions – more difficult for platforms offering nonstandardized services (TaskRabbit) but in order to own the interaction, all platforms must create more value than they capture, All platforms must overcome the chicken and egg problem until they reach critical mass, the minimum network size at which there are enough producers and consumers of value on the platform to ensure that interactions spark off reliably. 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