Platform Revolution: How networked markets are transforming the economy and how to make them work for you.
By Geoffrey G Parker, Marshall W Van Alstyne and Sanger Paul Choudary
A readable book that in parts overplays its hand and in others glosses over matters contrary to their thesis. I guess it is enlightening in its case studies and intriguing in its ideas, but also superficial.
I think it overplays its hand because as starts from the position that the platform is a new and unique phenomenon. The authors define a platform as:
A business based on enabling value-creating interactions between external producers and consumers. The platform provides an open, participative infrastructure and sets governance conditions for them. The platform’s overarching purpose: to consummate matches amount users and facilitate the exchange of goods, services or social currency, thereby enabling value creation for all participants.
OK. Sounds good. But, delete “social currency” and you could be describing Chelford livestock market. And that is the problem with this book. It has doubled down on defining this “new” business model that it does not appear to think critically.
It also, fairly unthinkingly, reproduces the Tom Goodwin line that:
Uber, the world’s largest taxi company, owns no vehicles. Facebook, the world’s most popular media owner, creates no content. Alibaba, the most valuable retailer, has no inventory. And Airbnb, the world’s largest accommodation provider, owns no real estate.
Undoubtedly this is an exciting and attention-grabbing idea, and I have seen this arresting quote all over the place. Yet all are, to a lesser or greater extent, false comparisons. Minicab companies don’t usually own the cars used by their drivers. Facebook isn’t a media company or publisher, at least that is what it insists to regulators around the world. Like Alibaba, Bury market never held any inventory. And St Ives holiday cottages doesn’t own any of the cottages you can rent through them.
Ultimately all are brokers. However, the advance of technology allows these business to be at a scale hitherto unimagined, and to be smarter and faster at matching supply with demand. I am not belittling the technology or suggesting that somehow these businesses are not different. The technology is important, and these new companies are different. But, it is wrong to suggest that these new business models were unknown to science.
Overall I think more sceptical writers would have done the topic greater justice. For instance, the issue of data and governance are spoken about but not explored with a more jaundiced eye. As we have seen with Airbnb’s recent move to inspect all the properties listed on its website; basing your reputation on review systems that are gamed works until it doesn’t. Similarly, the concept of social currency could have been looked at in more depth. Is social currency simply selling attention, so marketing and advertising, or is it genuine new phenomena? Famously you can’t eat money, but at least you can buy food with it. Can you say the same about social currency?
In my opinion, Shoshana Zuboff wrote a better book on the changing economy and the novel aspects (and concerns it brings). Albeit her book, The Age of Surveillance Capitalism, is a touch overwritten in the opposite direction. It is overly negative. This short blast through the Facebooks and Airbnbs of this world is more optimistic and has more applicable ideas for business folk. For me the sweet spot is somewhere between the two books. To be pithy the book platform revolution is the ideal primer for those who want to sound like the zeitgeist without too much effort. Whereas, Shoshana’s book is the smartest person you know drunk on conspiracy. So why not read both?
- Platform revolution at Amazon: https://www.amazon.co.uk/Platform-Revolution-Networked-Transforming-Economy/dp/0393249131/ref=nodl_
- The Age of Surveillance Capitalism by Shoshana Zuboff: https://profilebooks.com/the-age-of-surveillance-capitalism.html
The Lord Meyricks 