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CDPSG3[PR] Ch6 – Monetization, CDPSG3[PR] Ch9 – Metrics, G3 (IBS 107212043…

- - - - A free layer of service attracts users who eventually pay for an enhanced version
    - - distributing the razors for free or at a very low price
        
        subsidized cost
        
        charging for the blades
    - - complicated
        
        Ex: Netscape fell
        
        Platform need to ensure that the value they create and hope to ultimately monetize is fully controlled by the platform
- - - - sources of excess value that the platform generates
- - - - more attractive presentations
      - better targeted messages
      - interactions with particularly valuable
  - - - Google Adwords
        
        publisher can achieve higher placement
    - - restaurants charging for a premium listing in search results
  - - - dating websites
        
        pay more to other people information
- - - - reducing the platform’s value
      - consumers may be willing to pay for quality content
  - - - for sure quality and choice babysitter
        
        charge a subscription feef from parents
- - - - companies looking for designers are charged
        to post employment listings on the site’s jobs board
    - - allows recruiters to present job opportunities to its members and offers companies the ability to compare and target professionals based on their résumés and professional brands
- - - - Haier Group
        
        METRICS
        
        the distance between customers and producers
        
        GOAL
        
        to minimize the distance between Haier and its customers
        
        FUNCTION
        
        (1) improving the fit between products and customer needs
        
        (2) enhancing the company's innovative capacities
        
        (3) making its marketing and promotional efforts less costly and more effective
        
        TOOL:
        
        WeChat
  - - - on the consumer side
        
        the platform should monitor
        
        frequency of consumption
        
        the likelyhood of repeat interaction
        
        datas for LTV
        
        searches
        
        rate of conversion to sale
        
        METRICS:
        
        lifetime value, LTV
      - on the producer side
        
        the platform should monitor
        
        the figures
        
        (2) listings crated
        
        (3) outcomes achieved
        
        (1) the frequency of producer participation
        
        interaction failure
        
        =
        
        the percentage of cases in which interactions are initiated but fail through some reason
        
        producer fraud
        
        EXAMPLE
        
        the failure of a producer to describe a product offering accurately
        
        to deliver a product in a timely fashion
        
        FUNCTION
        
        help to creative predict model
        
        METRICS:
        
        lifetime value, LTV
        
        FUNCTION: to run the experiments in an effort to impact the critical determinants of LTV
        
        EXMAPLE
        
        church rate
      - Alistair Croll and Benjamin Yoskovitz:
        <<Lean Analytics>>
  - - - the percentage of researches or queries that result in interactions
    - - Well designed and consistently monitored metrics focusing on the sales conversion rate can help platform managers develop smart strategies that will enhancing the platform's continued growth
    - - Airbnb
  - - - EXAMPLE
        
        OKCupid
      - FUNCTION
        
        ensure the balance on the two side of the market
- - - - For remaining vibrant, a platform must be able to adapt to the needs of its user and to changes in the competitive and regulatory environment
      - For a platform to identify necessary adaptions is by studying the extensions provided by developers
        
        EXAMPLE
        
        Windows
        
        Cisco
      - A platform may also choose to innovate when futures provided by third parties become a large part of the overall value enjoyed by user
        
        EXAMPLE
        
        Apple Maps
  - - - EXAMPLE
        
        labor platfoem
        
        Upwork
        
        data platform
        
        Thomson Reuters
        
        connection platform
        
        Skype
        
        platforms connect the machines
        
        GE's Industrial Internet
    - - facilitating a core interaction
      - measuring the drivers of value
      - innovating to maintain the platform's ability to produce significant value for user
- - - - oDesk Gary swart
    - - Lean Startup guru Eric Rise
      - vanity metrics should be avoided
        
        it falls to indicate accurately whether the business is really achieving critical mass or the liquidity it needs
        
        3 A's test
        
        Actionable
        
        (1) in providing clear guidance for strategic and managerial decisions
        
        (2) in being clearly related to the success of the business
        
        Accessible
        
        in being comprehensible to the people who gather and use the information
        
        Audiable
        
        in the sense that they are real and meaningful- based on clean, accurate data, precisely defined and reflecting the reality of the business as perceived by the user
    - - the number of happy customers on every side of the network who are repeatedly and increasingly engaged in positive, value-creating interactions
      - the real question you should never lose sight of
        
        Are people happy enough with the ecosystem to continue participating in it actively?
- - - - the intent of users to interact is consistently satisfied within a reasonable period of time.
    - - these interactions would signify a greater degree of engagement by the user and represent the moment when the user has recognized, used, and enjoyed a value unit available on the platform.
  - - - Matching quality is critical to delivering value and stimulating the long-term growth and success of the platform
        
        It is achieved through excellence in product or service curation.
    - - if matching quality is poor, slow, and disappointing, users will soon dwindle in number, interactions will slow to a trickle, and the platform may be doomed to an early demise.
    - - interaction percentage of 40 percent appears to represent a significant cutoff point for users of your platform
        
        the majority of users who experience interaction percentage higher than 40 percent during their first week on the platform remain active members for at least three months
        
        a majority of those with an interaction percentage lower than 40 percent stop participating in activities on the site
  - - - Ex. Airbnb is an example of a player in a high-risk category that has succeeded so far because of its ability to curate its participants successfully.
        
        It allows hosts and guests to review each other and has one of the highest review rates among platforms.
        
        It also takes additional measures to build trust, including having photographers certify the accuracy of the information contained in a host’s listing
- - - - focusing and measuring the wrong things
        
        they focus on kept directing its efforts to boosting membership numbers
        
        but they didn't get the number of satisfying interactions of platform users
        experience.
  - - - the rate of interaction success
      - the factors that
        contribute to it
    - - The greater the number of positive interactions the platform
        creates, the more users will be drawn to the platform
    - - quantify the success of the platform in fostering sustainable repetition of desirable interactions
        
        create positive network effects
- - - - focus on some of the key issues related to monetization
        
        Which user groups are enjoying the greatest value from platform activities?
        
        Which user groups may need to be subsidized to ensure their continued participation?