1. 1. Platforms in the Digital Age Tushar Shanker BU Questrom School of Business April 14, 2015 tshanker@bu.edu Adapted from work by Marshall Van Alstyne
2. 2. Economic Importance of Platforms Platform Growth The Role of Data in Platforms Implications for the Future
3. 3. Economic Importance of Platforms
4. 4. InterBrand: 2013 Best Global Brands
5. 5. These are Platforms
6. 6. % of top 20 firms by market cap since 2001 Economic Importance of Platform firms Percentage of Platform Firms weighted by MKT CAP (2001-2012) 35% 30% 25% 20% 15% 10% 5% 0% 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 MKTCAPWeightedPlatformFirms
7. 7. Platform Growth
8. 8. the system must provide a useful function or service and allow 3rd party access. Examples: iTunes: Music, Apps SAP: execute ERP systems Facebook: connect family, friends & acquaintances Nike Fuel: Activity tracking and social benchmarking Products have features, Platforms have communities To be a platform
9. 9. How are these related? Each Side Attracts More of the Other eBay Buyers Expedia Travelers Xbox Gamers AmEx CardHolders YouTube Viewers AirBnb Renters Mechanical Turk Jobs LinkedIn Job Seekers Android Users eBay Sellers Expedia Airlines/Hotels Xbox Developers AmEx Merchants YouTube Videographers AirBnb Hosts Mechanical Turk Laborers LinkedIn Employers Android Developers
10. 10. Apple iPod combined with iTunes Apple iPod $ $ Retailer Music Producer Listener $
11. 11. Apple iPod post-Platform (1) Remove supply chain inefficiency (2) Triangular platform supply network (3) Apple owns financial chokepoint (4) Apple helps users find content (5) Stronger Network EffectsApple User Content $$
12. 12. Instagram sold for $1B 13 employees 30 million users
13. 13. The Role of Data in Platforms
14. 14. The Role of Data in Platforms Understand User Preferences Increase Match Quality Grow Platform functionality
15. 15. Why Apple isnt killing Kindle: Amazon Ecosystem 2012 Zimedia
16. 16. APIs
17. 17. Nerds.airbnb.com
18. 18. Publicpolicy.airbnb.com
19. 19. Digital Platform Challenges
20. 20. Digital Platform Challenges Regulation Airbnb, Uber Privacy Uber Public Goods Monkey Parking Abuse of Dominance eBooks
21. 21. Implications for the Future
22. 22. City as Platform
23. 23. Energy/Smart Grid as Platform
24. 24. Education as Platform
25. 25. Economic Importance of Platforms Platform Growth The Role of Data in Platforms Implications for the Future
26. 26. Discussion Think of an existing product or service. How can you platformize it? Where are the network effects? How will you design the interaction? What are some digital challenges?
27. 27. Thank You
28. 28. Backup Slides
29. 29. 3 of top 5 firms in 2013 by Market Cap. Firm Market Cap in $Bn Apple 438 Exxon Mobile 380 Google 291 Microsoft 282 Berkshire Hathaway 281 Economic Importance of Platform firms
30. 30. To price a platform with network effects, who gets the subsidy?
31. 31. More Android Developers get more Android Uses More Android Users get more Android Developer Android Platform
32. 32. 1. All teams will expose their data 2. Teams must communicate through interfaces. 3. No other form of interprocess communication allowed 4. Interfaces, without exception, must be externalizable. 5. Anyone who doesnt do this will be fired. Bezos Platform Mandate