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Architecture and Disruption, A Capsule History of Digital Disruption,…
Architecture and Disruption
Structual impacts of platform disruption
De-linking assets from value
How?
de-link ownership of the physical asset from the value it creates
Example
goal
designing a smart market
integrate distributed energy resources
Problem
need a system to coordinate it
Solution
Platform
allow small sellers trade their surplus resources
Re-intermediation
How?
replacing non-scalable and inefficient agent intermediaries
Benefits
scale quickly and efficiently
connect market participants
Example
scouting for talent
YouTube
SoundCloud
publish
Amazon’s self-publishing platform
author
high revenues
pay expenses
editing
design
market aggregation
How?
Platforms are also creating new efficiencies by aggregating unorganized markets
Example
bus transportation in India
Problems
Different bus fleets
different types of bus
pricing is extremely variable
Solutions
Platform - redBus
aggregating information from all Indian bus operators in a central platform
The Power of Modularity
strategy for organizing complex products and processes efficiently
beneficial only if the partition is complete
subsystems can be designed independently
connect to the rest of the system only through standard interfaces
components of PC systems were central processing units
the computation
graphical processing units (GPUs)
random access memory (RAM)
working storage
hard drive
large amounts of long-term storage
firms are pursuing narrow market windows with limited engineering resources
skip the hard work of decomposing systems into clean modules
proceed as quickly as possible to a viable solution
Re-Architecting The Platform
analyze the degree of modularity the system has already achieved
“design structure matrices”
allow visual examination of the dependencies in complex systems
Intel faced a major challenge in growing its market
Pipelines becoming platforms
incumbents
reevaluate their existing business models
vertical integration
horizontal integration
Example
Nike
developing
apps
building an ecosystem of users using the data
wearable technology device
Benefits
not only leverages their existing assets but strengthens and reinforces them
Principles for designing a successful Platform
Platform
Complex &
Multisided system
Large Networks of Users
Industry-wide platform
Example
Health care industry
Need
an enormous range of industry participants with motivations
Some platform are direct connected between users
Exchange Value
Three exchange
every platform interaction
starts with the exchange of information
Exchange of information
As a result of information exchange,
participant may decide to
Exchange of goods or services
1 more item...
Eg
Yelp
Uber
Upwork
Consumers
Producers
Goal
To bring together producers and consumers
To engage
in these three forms of exchange
The Core Interaction:
The Why of Platform Design
The Design of every platform
The Design of core interaction
The participants+The value units+The filter=
The core Interaction
The value unit :star:
created by the producer
Example
Ebay, Airbnb
Listed the information by seller
1 more item...
The Crucial Role
Platforms
Information factories
Create a Factory Floor
don’t create
value units :no_entry:
no direct control over the production process
striking difference from the traditional pipeline business
The filter
value unit is delivered to selected consumers
The participants
Two participants
Producer
creates value
Example
1 more item...
Consumer
consumes value
Beyond the core interaction
introducing a new category of users as either producers or consumers
allowing users to exchange new kinds of value units
changing the value unit exchanged between existing users
curating members of an existing user group to create a new category of users
The How of Platform Design
to make core interactions possible
to make them inevitable by making them highly valuable to all participants.
Perform three key functions
Facilitate
Platform don't control value
create an infrastructure
value can be created, exchanged and lay out principle
involve reducing barriers to usage
to facilitate value creating interactions is not a simple matter.
Match
A successful platform creates efficiencies
by matching the right users
Successful platforms create mutually rewarding matches on a consistent basis.
Pull
Attracting consumers to platform
presents challenges
Revolves around keeping the interest of users
visit or sing up
can increased by leveraging the outside networks of participants
essential to a successful platform
Applying the end-to-end principle
adding new features and interactions to a platform
a powerful way to increase
its usefulness and attract more users.
Two reasons
specific new features are incorporated into the core
platform rather than attached to the periphery
applications that do not use those features will appear
slow and inefficient
a platform ecosystem can evolve faster when the core platform is a clean
A Capsule History of Digital Disruption
“Software is eating the world”
efficient pipelines ate inefficient pipelines
online pipelines benefited from low marginal costs of distribution
target and serve large markets with much smaller investment
“Platforms are eating the world”
Uber is on the march to global domination of local transportation
Airbnb has rapidly scaled to become a global provider of accommodation
world of platforms
Internet no longer acts merely as a distribution channel
acts as a creation infrastructure and a coordination mechanism
Platforms
leveraging this new capability to create entirely new business models
economic advantages
YouTube
empowering teenager
video camera or a smartphone
compete with movie studios and television networks
Twitter
attracted millions of content creators
new standard literary format
improves ability
relevant and high-quality content, goods, and services from producers
doesn’t simply mean the emergence of new business entities competing with traditional incumbent firms
Disruption
Uber
online location where riders and drivers can come together
brought benefits to both consumers and producers
building vast wealth for its investors
ultimately transform the entire transportation sector
stellar economic model
create value for both parties
Iterative Improvement
activity is controlled by users
best platforms
allow room for user quirks
gradually incorporate such quirks into the design of the platform
Support
Start
core interaction
Allow