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Platform Revolution, G4 (Terry, Vivian, Thet Thet), Why?, rescue…
Platform Revolution
Ch3 Architecture: Principles for Designing a Successful Platform
The Power of Modularity
What is the modularity?
A strategy for organizing complex products and processes efficiently
Designers achieve modularity by partitioning
information into visible design rules and hidden design parameters.
A critical factor of modularity - systems are cleanly partitioned
into subsystems
Eg. Amazon
Eg.Walmart
A modular system is composed of units (or
modules) that are designed independently but still function as an integrated whole
Modularity is beneficial only if the partition is precise,
unambiguous, and complete.
How - focus on the fundamentals.
Exchange of information
e.g Quora
Exchange of currency
other ways in which consumers “pay” producers in the world of platforms.
internalize the flow of money
traditional currency—money transmitted in one of a variety of ways
Exchange of goods or services
e.g YouTube
THE CORE INTERACTION
The participants
the producer, who creates value, and the consumer, who consumes value
Side-switching
perform the same role in an interaction.
The value unit :!!:
the core interaction starts with the creation of a value unit by the producer.
e.g Airbnb
The filter
an algorithmic, software-based tool used by the platform to enable the exchange of appropriate value units between users.
e.g A search query
Beyond
By changing the value unit exchanged between existing users
By introducing a new category of users as either producers or consumers
By allowing users to exchange new kinds of value units
By curating members of an existing user group to create a new category of users
ride-sharing
LinkedIn
How
Pull
keeping the interest of users who visit or sign up
feedback loop
single-user feedback loop
multi-user feedback loop
increased by leveraging the outside networks of participants.
Facilitate
facilitating interactions is making it as easy as possible for producers to create and exchange valuable goods and services via the platform.
an infrastructure in which value can be created and exchanged, and lay out principles that govern these interactions.
reducing barriers to usage
increasing barriers has a positive effect on usage
Match
an explicit data acquisition strategy
APPLYING THE END-TO-END PRINCIPLE TO PLATFORM DESIGN
activities that are not central to the workings of the network but valuable only to particular users should be located at the edges of the network rather than at its heart
Vista
a platform ecosystem can evolve faster when the core platform is a clean, simple system rather than a tangle of numerous features.
when application-specific features are run by the app itself rather than by the core platform, the user experience will be much cleaner.
Re-Architecting The Platform
The first step is
to analyze the degree of modularity the system has already achieved
The need to re-architect a complex system is not unique to software
Eg. Intel ( In the early 1990s )
ITERATIVE IMPROVEMENT:
THE ANTI-DESIGN PRINCIPLE
A platform's most of the activity
Controlled by users
Not by the owners or managers of the platform
Platform designers should always leave room for serendipitous discoveries
Users often lead the
way to where the design should evolve
Ch4 Disruption: How Platforms Conquer and Transform Traditional Industries
Platform create a place where producers and consumers can
come together in interactions that create value for both parties
The main difference between these traditional platform businesses and the modern platforms is the addition of digital technology.
The Internet and its associated technologies give today’s platform businesses a truly
breathtaking ability to transform industries, often in unpredictable ways.
Eg. e car-service platform Uber
Eg. Traditional incumbent companies
How Platform Eat Pipelines
Taxi companies(Uber)
Uber is on the march to global domination of local transportation.
Internet no longer acts merely as a distribution channel (a pipeline).
Acts as a creation infrastructure and a coordination mechanism.
platforms are able to build open electronic ecosystems
Can be larger than most
pipeline-based organizations
Can have access to more resources than a traditional pipeline
company can command
Value created in such an ecosystem can be much larger than
the value created in a comparable traditional organization.
Hotel industry(Airbnb) expands with near-zero marginal cost
Airbnb has rapidly scaled to become a global provider of
accommodation
A Capsule History Of Digital Disruption
Software is eating the world.
The story of Internet-enabled
disruption has occurred in two main stages.
Stage one, efficient pipelines ate inefficient pipelines.
Eg, Traditional offline pipelines( High costs ) and Online pipelines (low marginal costs )
Stage two, Platforms eat pipelines.
Eg.Amazom and Other book stores
Platforms are eating the
world.
Structural impacts of platform disruption
Re-intermediation
rely on algorithms and social feedback
transform industries and create new venues where market participants are connected with greater power and efficiency ever
change the economics of participation for producers and consumers
Traditional book business
author earned 10-15%
Amazon’s self-publishing platform
author retained 70%
creates a new layer of reputational information by leveraging social feedback about producers
Yelp, Angie’s List, and TripAdvisor drove travel guide and consumer magazine publishers out of business
Market aggregation
platform provides centralized markets to serve widely dispersed individuals and organizations
redBus
aggregates information from all Indian bus operators in a central plug-and-play infrastructure
quicker, easier, and cheaper decision-making for customers
De-linking assets from value
allows the use of the asset to be independently traded and applied to its best use, rather than being restricted to uses specific to the owner
Waterfind
a platform for water trading that greatly increased the economic efficiency of water use
a farmer with a low-value crop might stop farming and sell his water to a farmer with a high-value crop, or to a municipal water authority within transport distance
The incumbents fight back: pipelines becoming platforms
How?
reevaluate existing business models
scrutinize all transaction costs
examine the entire universe of individuals and organizations they currently interact with and envision new ways of networking them
create new forms of value
expand by owning and integrating a greater length of the value-creation-and-delivery pipeline
vertical integration
buy upstream suppliers or downstream distributors
horizontal integration
create new products and brands
Apple syncs contents and data over iTunes and iCloud
Can any product or service become the basis of a platform business?
McCormick Foods
use recipes and taste profiles to build a food-based platform
companies who understand the new business model can begin building tomorrow’s platforms
leverage existing assets
strengthen and reinforce existing assets
The impacts of platform disruption on value creation, value consumption, and quality control
Reconfigure value consumption by enabling new forms of consumer behavior
trust-building mechanisms
entrusting complete strangers with our most valuable possessions, our personal experiences, and our very lives
Reconfigure quality control through community-driven curation
In early stages
fail to offer the quality and reliability provided by their traditional competitors
Airbnb's apartments would get raided by city inspectors responding to complaints about orgies
Wikipedia biographies declared many a living person deceased
YouTube’s early content was pirated
Over time
platform improves its ability to match consumers with relevant and high-quality content, goods, and services from producers
strong curation encourages desirable behavior
discourage and eventually weed out undesirable behavior
when platform starts to scale
ensure curation mechanism doesn’t break down
Reconfigure value creation to tap new sources of supply
platform businesses are steadily lowering barriers that might discourage producers
Airbnb
regularly conducting events and programs designed to illustrate and teach its best practices
to lower hurdles for its member-hosts
Uber
provide sign-up bonuses
remove economic barriers that might discourage would-be drivers
G4
Terry
Vivian
Thet Thet
Why?
rescue Australian farmers from a drought in 2015