More on this book
Community
Kindle Notes & Highlights
Read between
January 20 - February 8, 2020
when the growth in numbers that enables more matches between producers and consumers also leads to increasing difficulty, or impossibility, in finding the best match.
The first level addresses the obvious issue of matching compatible interests.
he probably doesn’t have the movie-star good looks he thought he had. But his chances for a successful match have greatly increased, which should lead in the long run to a higher level of satisfaction.
has four kinds of network effects.
On OkCupid, women attract men more than men attract women.
On Uber, a single driver is more critical to growth than a single rider.
They are valuable because of the communities that participate in their platforms.
the world of network effects, ecosystems of users are the new source of competitive advantage and market dominance.
how do we design a technological infrastructure that is capable of scaling rapidly, and encouraging positive network effects while minimizing negative ones?
As we’ve seen, a platform connects producers with consumers and allows them to exchange value.
the producer and the consumer exchange three things: information, goods or services, and some form of currency.
Thus, every platform business must be designed to facilitate the exchange of information. Some platforms have the exchange of information as their sole purpose—for example, a news forum like Reddit or a question-and-answer site like Quora.
Notice that, in every case, the exchange of information takes place through the platform itself. In fact, this is one of the fundamental characteristics of a platform business.
In other cases, goods or services are exchanged outside of the platform (although information about the delivery may be tracked and exchanged on the platform).
enhancing the reputation of producers whose work they like. Thus, attention, fame, influence, reputation, and other intangible forms of value can play the role of “currency” on a platform.
The platform’s goal, then, is to bring together producers and consumers and enable them to engage in these three forms of exchange: of information, of goods or services, and of currency. The platform provides an infrastructure that participants plug in to, which provides tools and rules to make exchanges easy and mutually rewarding.
Platforms are designed one interaction at a time. Thus, the design of every platform should start with the design of the core interaction that it enables between producers and consumers.
The core interaction involves three key components: the participants, the value unit, and the filter.
interaction were built into the platform over time, each designed to meet a particular platform goal and to help users create a new form of value.
the producer, who creates value, and the consumer, who consumes value.
nuance
same user may play a different role in differing interactions.
A well-designed platform makes it easy for users to move from role to role.
incentives that encourage different parties to participate are different, but the roles remain consistent.
On a platform like Kickstarter, the project details constitute the value unit that enables potential backers to make a decision whether to fund it.
filter. The value unit is delivered to selected consumers based on filters. A filter is an algorithmic, software-based tool used by the platform to enable the exchange of appropriate value units between users.
platform users receive only value units that are relevant and valuable to them; a poorly-designed filter (or no filter at all) means users may be flooded with units they find irrelevant and valueless, which may drive them to abandon the platform.
Once this exchange of information happens, everything else clicks into action.
designing a platform, your first and most important job is to decide what your core interaction will be, and then to define the participants, the value units, and the filters to make such core interactions possible.
valuable core interaction that is easy, even enjoyable, to engage in attracts participants and makes the emergence of positive network effects possible.
But none of these methods worked well—the people we tried to work with weren’t interested, and the incentives simply weren’t strong enough to produce a powerful flow of data.
The FOS team went door to door in each village, meeting with farmers and recording key information about their crops and their marketing plans on paper forms. Then they brought the data back to our offices, where we entered it into our spreadsheets.
The whole purpose of a platform is to make core interactions possible—indeed, to the extent possible, to make them inevitable by making them highly valuable to all participants.
To begin with, platforms need to solve a chicken-or-egg problem that pipeline businesses don’t suffer from: users won’t come to a platform unless it has value, and a platform won’t have value unless users use it.
keeping the interest of users who visit or sign up for the platform.
Unlike traditional pipeline businesses, platforms don’t control value creation.
they create an infrastructure in which value can be created and exchanged,
and lay out principles that govern these...
This highlight has been truncated due to consecutive passage length restrictions.
increasing barriers has a positive effect on usage.
Designing a platform to facilitate value-creating interactions is not a simple matter.
matching the right users with one another and ensuring that the most relevant goods and services are exchanged.
Uber hopes to buy Here and use its mapping power to produce swift and accurate ride-sharing matches more effectively than any other service.
Andrew Chapin of Uber’s driver operations group came up with the idea of having Uber act as a middleman to guarantee car loans for its drivers, deducting repayments from driver revenue and sending them directly to the lenders.
It began allowing users to organize themselves into groups and start discussions.
allowed recruiters to use the site to target candidates, and advertisers to target ads to relevant professionals.
subsequently all users, to publish posts on LinkedIn for others to
to a platform can be a powerful way to increase its usefulness and attract more users.
Only the highest-volume, highest-value features that cut across apps should become part of the core platform.
There are two reasons for this rule. First, when 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. By contrast, when application-specific features are run by the app itself rather than by the core platform, the user experience will be much cleaner. Second, a platform ecosystem can evolve faster when the core platform is a clean, simple system rather than a tangle of numerous features.
platform as consisting of a stable core layer that restricts variety, sitting underneath an evolving layer that enables variety.
