Do platforms work?

Aeon

May 28, 2018

"The distributed network has gobbled the hierarchical firm," writes Aeon. "Only by seizing the platform can workers avoid digital serfdom. ...

"In their book Platform Revolution (2016), Geoffrey Parker, Marshall Van Alstyne and Sangeet Paul Choudary argue that businesses used to be ‘pipes’ (linear models) and are becoming ‘platforms’ (networked models). Before the digital revolution, firms created goods and services, which they pushed out and sold to customers. The flow was from point A to point B – like pipes connecting deep-sea oil wells to the person who fills up the tank of their car with refined petrol.

"Unlike pipes, however, platforms disrupt the clear-cut demarcation between producer and consumer, because they enable users to create as well as to consume value. Platforms need a different, non-pipe-like infrastructure. The major business challenge is to attract creators and consumers in the right proportions for transactions to occur. Platforms are in fact very similar to marketplaces: both create economic value by fostering exchanges between two (or more) groups. Now, though, this value can be generated within a company, not just outside it."

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