The Business of Platforms: Strategy in the Age of Digital Competition, Innovation, and Power

I’ve read quite a few books on platforms and they differentiate in different ways. As a reader with a general interest in platform businesses but not an owner in one myself, this one may have been the best I have read. It’s somewhat dense - not in length but in information. And it’s written with a level of erudition and attention to detail that is appreciated by the scrupulous reader while not being too arcane for the novice reader. If you are looking to start your own platform business then you wouldn’t find the information useful in it’s entirety. The most manifest example being when the authors spent a good amount of time talking about the responsibility a platform needs when it transitions from being a smaller and scrappy company to a larger and more influential platform. While as a general interest reader I found the discussion and examples very interesting like for example the difference between the 2008 mindset of Facebook and its CEO Mark Zuckerberg versus the 2018 version (with hundreds of millions of users Facebook has the moral responsibility now that it didn’t quite harbor back in its early race for market hegemony). Someone reading for practical advice on the other hand, are most likely not going to be at the stage of their platform businesses were they are at any given moment going to be targeted by lawmakers and impugned by ethical and moral arbiters. Nevertheless, most people can find actionable advice within the first half of the book. With adherence to data, the authors observe why most marketplaces fail and how the ones that succeed do so. This book is a must read but not always a first-read. It’s the perhaps first book you read when you have a platform business that is up and running (or you own a fairly large traditional business that you want to convert into a platform). For anybody else, I would suggest The Lean Marketplace while keeping this book as an essential read on your journey.

This is actual a great book. I think it would be great for investors, entrepreneurs, businessmen, and people curious about the concept of a platform.This book is about modern digital platforms and gives a good discussion of many of present day businesses involved (Amazon, Apple, Facebook,....etc). It includes some fascinating stories about companies and their platforms. One story is the battle for eCommerce in China between eBay and Alibaba. I never realized how clever Jack Ma is. This story follows Jack Ma verse Meg Whitman through the strategies involved in business. A lot of interesting detail, but they do not cover some of controversial elements involved. They only make a brief reference to a Chinese business in China, and no reference to government interference in the struggle. The book shows a lot of research into the details of business. It is a little dry at times, but mentions many issues I never would have thought of.The concept of platform is interesting as a modern word for the whole element of life and culture. As human and animal cultures have evolved new powerful entities have evolved with us. The more interaction that occurs on the earth the more platforms follow. In many ways English has become a platform in the modern world. There are too many languages to serve communication between billions of people. And languages and speech were platforms the pushed life forms toward human beings. This helped start the process of human proliferation. As each new construct of nature evolves it explodes into the space available. Life appears to be a construct of chemical interactions. Who knows what new constructs exist in older cultures in the Cosmos. Enough philosophy for now.Maybe digital platform are more powerful then we think.

The book provides poor advise and doesn’t understand platforms, the history and use of platforms or the innovation management required to successfully create new or revised businesses with platforms. The book is myopic, focuses on digital platform businesses such as Amazon, Apple, Google and Facebook, but doesn’t adequately describe why the failure rate is so high for companies trying to build digital platform businesses.The book describes the attempt by GE to create a digital platform business based on Predix that would expand their business to include an Industrial Internet of Things, but doesn’t recognize that GE’s failure to practice a new generation of innovation management caused the GE failure to build a platform business.The book identifies the “chicken and egg” problem which is where to focus regarding the starting effort to build a platform but the book fails to understand that a platform always fits into a market and industry governed by a dominant design and understanding the dominant design is where to start. More than a decade before developing and launching the AWS platform in 2006, Amazon started in 1994 by understanding the customer problem with the weaknesses in the dominant design of the retail industry which included having a limited inventory in stores. Amazon then saw the opportunity for radical innovation to change the dominant design with scalable e-commerce on the Internet but began by building an online store for books with a logistics capability for delivery.Amazon practiced a new generation of innovation management that guided their radical innovation in retail business with iterative discovery and development that eventually gave them the insight and the capability for another new business based on the “open” AWS platform.Four generations of innovation management evolved since 1900 but the first three generations were incapable of enabling existing or new businesses to create radical innovation or to survive from the impact of radical innovation. Amazon, Microsoft, Apple, Google and Facebook (all startups) used the new Fourth Generation of Innovation Management (4G/IM) to successfully create radical innovations containing platforms. Lean Startup which is the new best practice for entrepreneurship is a subset of 4G/IM.Platforms are much more than foundational components for products or businesses. Platforms form part of the dominant design that governs markets and industries. Dominant designs include infrastructure created by government investments that facilitates economic growth of new businesses such as canals, railroads, Interstate highways, airports, electricity grids, public schools, land grant public colleges and the Internet.Industries such as automotive have relied on dominant designs containing platforms for product families and factories with supply chains as collaborative infrastructure to operate effectively.What’s missing in the book is the whole story needed to understand how to manage business innovation in the Innovation Age driven by radical innovations driven by dominant designs (capabilities, business models, and industry infrastructure) which must apply new principles of economics and finance, apply new strategies for competition (with collaboration within large groups) and practice a new Fourth Generation of Innovation Management for American businesses to compete globally against countries including China.The state of business education in universities today is chaotic and ineffective with superficial and conflicting theories that don’t understand the new Fourth Generation of Innovation Management. The state of business education is similar to the state of medical education before the Flexner Report in 1910. Innovation Management is a new professional discipline similar to medicine and law that needs to taught at universities in new Schools of Innovation. Business schools can’t adequately teach innovation. A curriculum in innovation requires courses in science, software engineering, data analytics, machine learning, operations, marketing, finance and law. Innovators need broad and deep knowledge. A business career path in innovation leads to a Chief Innovation Officer that reports to a CEO.A new Fourth Generation of Innovation Management (4G/IM) is required to explain why many businesses fail to successfully build radical innovations with platforms and how new transformed businesses and industries need government support with infrastructure.Kodak failed to use 4G/IM and saw the market for chemical photography get destroyed by the radical innovation of digital photography delivered by a collaborative group practicing 4G/IM including Apple and Google supplying or supporting smart phones containing digital cameras and cellular communication services linked to the Internet and Facebook with social networking that shared photos. GE failed to use 4G/IM.Fourth Generation Innovation Management (4G/IM) recognizes industries evolve with new dominant designs as the glue enabling the collaboration between large groups of companies required for radical innovation which is the “creative destruction” that enables new companies to grow and compete with platforms. Platforms support efficient economies of scale that provide better value for customers. As mentioned, Amazon used 4G/IM to build online shopping and fast delivery logistics that evolved into AWS as a platform. Amazon competes with Walmart and others in retail, competes with Microsoft and others in the information technology industry with services for Internet Cloud Computing, and competes in other markets with Whole Foods and Prime Video streaming.4G/IM is built on a new generation of R&D, economics and finance that recognizes radical innovation is driven more by new dominant designs consisting of new capabilities in “stacks” which are linked together to build business models and industry structures. New capabilities form the core of value in innovation and the dominant design that governs markets and industries.A capability “stack” in 4G/IM has the following structure that is supported by people with knowledge and processes:Servicesapplicationstools/productsplatformscomponentstechnologiesCapability “stacks” are used within businesses as building blocks and are also supplied to customers as services, applications or products with platform support. Customers buy new capabilities that supply benefits in doing the tasks they want to do. Platforms can also be sold in “stacks” which are a collection of services. An example is Amazon AWS.Radical innovations by smart startup companies, many practicing 4G/IM, rather than advice from business school faculty enabled America to move from an Industrial Age into a new larger economy in a Digital Age driven by information technology and services.Radical innovation that transformed the computer industry was a collaborative collection of startups (Microsoft, Intel, Dell, Cisco, Western Digital, Seagate …) glued together with a market industry standard which was a dominant design.The latest radical innovations in the Digital Age (Amazon-retail, Google -advertising, Apple-smart phones, Facebook-social networking, …) were enabled by the Internet, a radical innovation, that was built on government funded R&D in a new type of platform infrastructure, the ARPANET.Now the economy is moving beyond the Digital Age into an Innovation Age with radical innovations transforming many industries including energy, transportation, healthcare, education, finance, real estate and food/agriculture. An example is the automotive industry being transformed by the new dominant design including new capabilities in batteries, platforms for EV’s, business model changes at OEMs like Tesla and dealers with direct selling, and industry infrastructure with charging stations. 4G/IM should guide the creation of other platforms in infrastructure required as government investments in related industries such as energy. Hydrogen is being adopted in Europe as a fuel but is ignored in America.Economics, finance, and the legal system change in 4G/IM. Valuations on the stock market rise when companies practice 4G/IM. The economy is now more driven by radical rather than incremental innovations based on intangible capital (people with knowledge, skills, intellectual property, and technology) than tangible capital (money and physical assets such as real estate, machinery and land). Incremental innovation encourages and supports monopolies whereas radical innovation replaces monopolies without antitrust intervention. Economics, finance and the legal system don’t currently adequately measure or understand either radical innovation or intangible capital.The real solution to sustained growth of an economy requires business, government and universities (including business schools) to understand and support the practice of a new Fourth Generation of Innovation Management (4G/IM) that was practiced beginning in the 1980’s by a few companies but has emerged since 2000 as best practice. 4G/IM supersedes the three generations that emerged since 1900 because 4G/IM enables improved business management, economics, finance, and government regulation required for radical innovation. The three generations which are currently in common practice are incapable of effectively creating radical innovation for new transformed business, markets and industries that are solutions to problems such as global warming, poverty, income inequity and pandemics. 4G/IM enables what economist Schumpeter called “creative destruction” with radical innovation. Mergers and acquisitions that consolidate industries leading to monopolies are a symptom of obsolete IM, economics and finance.One of the important subset disciplines in 4G/IM is Fourth Generation R&D. The scope of 4G R&D is broadened to entrepreneurship and radical innovation management including marketing and business development.Americans, especially universities, have been slow to adopt new paradigms in science or as best practices in management. Thomas Kuhn described the irrational reluctance to adopt new facts in science where change occurs slowly until revolutionary thinking clearly invalidates old theories and creates new opportunity for a paradigm shift. In another example, the Toyota Production System was developed in Japan between 1948 and 1975 but was not adopted in America as lean manufacturing until the 1990’s. Universities didn’t begin teaching an industrial engineering course in lean manufacturing until the 2000’s, more than 20 years after Toyota had proven the benefits.

Amazing content for those who are seeking a deeper understanding of a platform business dynamics. Deep research and lots of insight from the "real world" of business. A must read, definitely.

This book counts as one of the most informative and instructive mentors that one can hope for as a guide through the practicals of building and running platform operations. It is accessible and matter-of-a-fact in defining the basic concepts underlying platforms, in its coverage of numerous benchmarks, as well as in providing pragmatic recommendations for the development of a platform business. This book also tells the story of the astonishing shift in trade and work practices over the last two decades (Denis Gauvreau, Director of Innovation and Business Development, Polytechnique Montréal)

The book goes around same histories. Should have more details or more examples or at least reduced for half of pages

配送予定日よりも遅れて届き、かつ配送状況が悪かったのか元からなのかわかりませんが、新品のはずが傷がついた状態でした。中も落丁があり、新品か疑わしく思ってしまいます。

Great introduction to platform businesses with a historical and contextual introduction.Filled with understandable business cases and useful for those wanting to start a business or wanting to invest into businesses.Highly recommend