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SCD G2 [PR] CH 1 – Today: Welcome to the platform revolution & CH 2 –…

- - - - Platforms beat pipelines because platforms scale more efficiently by eliminating gatekeepers
        
        Gatekeepers control access from one point to another
        
        Elimination of gatekeepers allows consumers freedom to select products that suits their needs
        
        Example A: Traditional Book Editors vs. Amazon's Kindle Platform
        
        Example B: Traditional Higher Education vs. Coursera
      - Platforms beat pipelines because platforms unlock new sources of value creation and supply
        
        Traditional businesses ran on just-in-time inventory; new organizations ran on not-even-mine inventory
        
        Example A: Traditional Hotels like Hilton vs. Airbnb
        
        Example B: TV Stations vs. Youtube Content
      - Platforms invert the firm
        
        Platform businesses shift its focus from internal to external activities
        
        Marketing: From broadcast to virality and social influence
        
        Finance: From shareholder value to stakeholder value
      - Platforms beat pipelines by using data-based tools to create community feedback loops
        
        The success of a content or service relies on the reaction from the community
        
        Example A: Real time feedback from Kindle readers
        
        Example B: Encyclopedia Britannica vs. Wikipedia
  - - - Founders
        
        revolution
        
        a casual space-sharing
        
        affordable room rentals
        
        a long-term. business
        
        design website
        
        a slice of the rental fee
        
        Airbnb
      - focus on events
        
        affordable accommodation exist everywhere
        
        active in 119 countries
        
        over $10 billion
    - - Uber
        
        Alibaba
        
        Facebook
    - - connect people, resources
        
        create value
    - - transformative concept :check:
        
        radically change the society
    - - fast-growing
        
        Apple,Google,Facebook
        
        all run platform business models
    - - no matter what kind of work
        
        creat opportunities and new challenges
  - - - strategy
      - operations
      - marketing
      - research and development
      - human resources
    - - starting your own platform business
        
        launching managing
        
        growing a successful platform
        
        help you navigate the complexities of designing
      - running a platform business isn’t for you
        
        the growing impact of platforms is likely to affect you
        
        how you can participate happily in an economy increasingly dominated
    - - Their value from the communities they serve
      - Already transformed many major industries
      - Grow much faster than traditional businesses
- - - - refers to the number of users of platform has on the value created for each user.
      - Positive Network Effects
        
        The ability of large, well managed platform community
        
        Can produce significant value for each user of platform
        
        Main source of value creation and competitive advantage in a platform business
      - Negative network effects
        
        The possibility that growth in numbers, poorly managed platform community
        
        It can reduce the value produced for each user
  - - - Fundamental source of positive effect/ chief drivers of economic value
        
        most important differentiating factor
    - - Growth via network effects leads to market expansion
    - - Supply economies of scale
        
        production efficiencies
        
        reduce the unit cost as quantities increases
  - - - Grow Quickly -> Fail Quickly
        
        Chatroulette
        
        Pair random people around the world
        
        user growth to 1.5million within 6 month -no register require ( no control)
        -problem occur
      - Cause and Cure
        
        Example - OK cupid (Dating App)
        
        Multiple Level of network Matching -(compatible interest, hobby)
      - Solution
        
        Control
        
        Assess of user to Platform
        
        Limit
        
        Filters
    - - Easy to join for user
      - participate in value creation
        
        Example
        
        Threadless (T-Shirt and website company)
        
        Weekly Design Contest
        
        -No marketing needed - No need to forecast sale
        
        Selling Website
        
        Yahoo and Google
        
        Yahoo
        
        Human Edited Data Base
        
        Google
        
        Web pages link to one another
      - Grow organically
      - Key factors to grow rapidly
    - - One side Disproportionally large
        
        Attract customers with discount or coupon
      - Side Switching
        
        When user join the opposite side
        
        Consumer -Producer , -Passenger - Driver ,
        -Guest - Host
      - Require to grow proportionally
        
        Example - Uber / Air bnb
  - - - With both producers and consumers
        
        Four Kinds - Network Effect
        
        Positive same-side effect
        
        Customer side
        
        Examples - The Bell telecom
        
        More subscribers
        
        1 more item...
        
        Producer side
        
        Example- Adobe
        
        The more the people share images
        
        1 more item...
        
        Negative cross-side effect
        
        Example - Digital Sharing medias ( Music, Text, Images, Videos)
        
        Growing Numbers of producers
        
        More consumers
        
        1 more item...
        
        Negative same-side effect
        
        Down side of number growth
        
        Example - Covisint
        
        Cloud based networking tool
        
        1 more item...
        
        Positive cross-side effect
        
        Based on number of users from opposite side
        
        Example - Visa
        
        More Merchants agree
        
        1 more item...
  - - - App developers attract consumers
        
        Importance is great that platform businesses will often spend money to attract participants to one side of the market.
    - - Consumers attract app developers
    - - financial losses
        
        not just temporarily
        
        but permently
  - - - HR Management shifts from employees to crowds
        
        Innovation shifts from in-house R&D to Open innovation
        
        Externalities Management - A key Leadership
    - - Supply-side Economy of Scale
        
        Internet era giants
        
        Demand-side Economy of Scale
        
        Stock Market Value
    - - Asset builders provide physical goods
        
        Walmart , Ford
        
        Service providers provide services
        
        Tech Creators sells Intellectual property
        
        Microsoft, Amgen
        
        Network Orchestrators develop networks
        
        People and companies create value together
        
        Platform Businesses
        
        UnitedHealthcare , Accenture
  - - - evanescent
    - - stickier
    - - Virality