Platform Economy Quotes

When permaculture design principles are applied to business, business becomes a powerful platform for making the world a better place.

But what we call social media is not media, nor is it even a platform. It is a massive cultural shift that has profoundly affected the way society uses the greatest platform ever invented, the Internet.

This book is about how to hold open that place in the sun. It is a field guide to doing nothing as an act of political resistance to the attention economy, with all the stubbornness of a Chinese “nail house” blocking a major highway. I want this not only for artists and writers, but for any person who perceives life to be more than an instrument and therefore something that cannot be optimized. A simple refusal motivates my argument: refusal to believe that the present time and place, and the people who are here with us, are somehow not enough. Platforms such as Facebook and Instagram act like dams that capitalize on our natural interest in others and an ageless need for community, hijacking and frustrating our most innate desires, and profiting from them. Solitude, observation, and simple conviviality should be recognized not only as ends in and of themselves, but inalienable rights belonging to anyone lucky enough to be alive. —

In today’s hypercompetitive environment enabled by technology, ownership of infrastructure no longer provides a defensible advantage. Instead, flexibility provides the crucial competitive edge, competition is perpetual motion, and advantage is evanescent.

I am not anti-technology. After all, there are forms of technology—from tools that let us observe the natural world to decentralized, noncommercial social networks—that might situate us more fully in the present. Rather, I am opposed to the way that corporate platforms buy and sell our attention, as well as to designs and uses of technology that enshrine a narrow definition of productivity and ignore the local, the carnal, and the poetic. I am concerned about the effects of current social media on expression—including the right not to express oneself—and its deliberately addictive features. But the villain here is not necessarily the Internet, or even the idea of social media; it is the invasive logic of commercial social media and its financial incentive to keep us in a profitable state of anxiety, envy, and distraction. It is furthermore the cult of individuality and personal branding that grow out of such platforms and affect the way we think about our offline selves and the places where we actually live.

The derisive term bloatware has been coined to describe software systems that have become complicated, slow, and inefficient through thoughtless accretion of features.

Televangelist Pat Robertson also declared, on a platform that on defence and many other topics was well to the right of Attilla the Hun.

In my opinion, this kind of hyper-accelerated expression on social media is not exactly helpful (not to mention the huge amount of value it produces for Facebook). It’s not a form of communication driven by reflection and reason, but rather a reaction driven by fear and anger. Obviously these feelings are warranted, but their expression on social media so often feels like firecrackers setting off other firecrackers in a very small room that soon gets filled with smoke. Our aimless and desperate expressions on these platforms don’t do much for us, but they are hugely lucrative for advertisers and social media companies, since what drives the machine is not the content of information but the rate of engagement.

However, simplicity is a virtue when developing metrics for your platform business. Overcomplex metrics make management less effective by introducing noise, discouraging frequent analysis, and distracting from the handful of data points that are most significant.

In real life, the value capture process is sometimes deliberately managed by elites to manipulate and control others with game design-like tactics. Gig economy platforms like Uber and Lyft use "badges" and rating systems to manage the decision-making environment of their driver employees. Even outside of work, social media features such as likes, shares, and retweets play the role of points in games. Over time, these simple metrics threaten to distort or take the place of values (say, the wish to meaningfully contribute to discussion or to take pride in the quality of one's work) that might otherwise have inflected our behavior on these platforms.

Tomorrow's banks will be decentralized applications of software built on cryptography, blockchain technology and smart contracts. Theyll be platforms for saving, lending, investing, moving and spending that are much more equitable and sensible than they were in the 20th century and ironically it'll be more aligned to what banks were like in much earlier civilizations. So when I talk about banks being to the economy what the heart is to the human body - this is really what I'm talking about. I'm not necessarily talking about the ICBC. The ICBC or Bank of America may play an important role, but so could thousands of small local banks or small apps on a Blockchain.

I want this not only for artists and writers, but for any person who perceives life to be more than an instrument and therefore something that cannot be optimized. A simple refusal motivates my argument: refusal to believe that the present time and place, and the people who are here with us, are somehow not enough. Platforms such as Facebook and Instagram act like dams that capitalize on our natural interest in others and an ageless need for community, hijacking and frustrating our most innate desires, and profiting from them. Solitude, observation, and simple conviviality should be recognized not only as ends in and of themselves, but inalienable rights belonging to anyone lucky enough to be alive.

But the villain here is not necessarily the Internet, or even the idea of social media; it is the invasive logic of commercial social media and its financial incentive to keep us in a profitable state of anxiety, envy, and distraction. It is furthermore the cult of individuality and personal branding that grow out of such platforms and affect the way we think about our offline selves and the places where we actually live.

Beyond the public relations efforts of platforms like Uber and Airbnb, there may be deeper reasons why the term “sharing economy” is so popular: It captures some of the thinking and the idealism of the early proponents of economy-wide sharing approaches. It hints at the shift away from faceless, impersonal 20th-century capitalism and toward exchange that is somehow more connected, more embedded in community, more reflective of a shared purpose.

Fortunately, new platforms and technology have made homeschooling manageable on many fronts. Parents can do everything from accessing first-rate courses online to finding support from other parents in the same situation. The best part is that they can completely tailor the experience to the learning style and interest of their children and give them the attention that they would never get in the classroom. The results are striking. Twenty-five percent of homeschooled children are at least one grade ahead of their traditionally schooled peers. The homeschooled population, as a whole, scores exceptionally higher on academic achievement tests.5 This shift is perhaps the best glimpse of the future of education—mass customization alongside personalized attention. Like banking, it will return to a human-scale model based on relationships and personal needs, and it will be where much of the disruption in the economy and labor market occurs in the next few decades.

That law of nature whereby everything climbs to higher platforms, and bodily vigor becomes mental and moral vigor. The bread he eats is first strength and animal spirits; it becomes, in higher laboratories, imagery and thought; and in still higher results, courage and endurance. This is the right compound interest; this is capital doubled, quadrupled, centupled; man raised to his highest power. The true thrift is always to spend on the higher plane; to invest and invest, with keener avarice, that he may spend in spiritual creation and not in augmenting animal existence.

No one is perfect, and I see ways in which each of the companies I’ve profiled could adjust and improve their social media initiatives. Then again, I’m well aware that there are things I could do to improve my own efforts. Sustaining relationships and leveraging social networks is challenging work. Yet the thing that strikes me about the individuals who are leading the companies and brands profiled in this book is their excitement. They work like animals, and the economy is still wobbly, but when they talk about their work, you get the definite sense that all they see are doors of opportunity flying open every day. It’s as though social media has given all its users an equal platform on which they can build not just their careers, but their dreams.

Beyond streamlining operations and introducing cost innovations, a second lever companies can pull to meet their target cost is partnering. In bringing a new product or service to market, many companies mistakenly try to carry out all the production and distribution activities themselves. Sometimes that’s because they see the product or service as a platform for developing new capabilities. Other times it is simply a matter of not considering other outside options. Partnering, however, provides a way for companies to secure needed capabilities fast and effectively while dropping their cost structure. It allows a company to leverage other companies’ expertise and economies of scale. Partnering includes closing gaps in capabilities through making small acquisitions when doing so is faster and cheaper, providing access to needed expertise that has already been mastered. A

Pull approaches differ significantly from push approaches in terms of how they organize and manage resources. Push approaches are typified by "programs" - tightly scripted specifications of activities designed to be invoked by known parties in pre-determined contexts. Of course, we don't mean that all push approaches are software programs - we are using this as a broader metaphor to describe one way of organizing activities and resources. Think of thick process manuals in most enterprises or standardized curricula in most primary and secondary educational institutions, not to mention the programming of network television, and you will see that institutions heavily rely on programs of many types to deliver resources in pre-determined contexts. Pull approaches, in contrast, tend to be implemented on "platforms" designed to flexibly accommodate diverse providers and consumers of resources. These platforms are much more open-ended and designed to evolve based on the learning and changing needs of the participants. Once again, we do not mean to use platforms in the literal sense of a tangible foundation, but in a broader, metaphorical sense to describe frameworks for orchestrating a set of resources that can be configured quickly and easily to serve a broad range of needs. Think of Expedia's travel service or the emergency ward of a hospital and you will see the contrast with the hard-wired push programs.

Writing about the circulation of information, Berardi makes a distinction that’s especially helpful here, between what he calls connectivity and sensitivity. Connectivity is the rapid circulation of information among compatible units—an example would be an article racking up a bunch of shares very quickly and unthinkingly by like-minded people on Facebook. With connectivity, you either are or are not compatible. Red or blue: check the box. In this transmission of information, the units don’t change, nor does the information. Sensitivity, in contrast, involves a difficult, awkward, ambiguous encounter between two differently shaped bodies that are themselves ambiguous—and this meeting, this sensing, requires and takes place in time. Not only that, due to the effort of sensing, the two entities might come away from the encounter a bit different than they went in. Thinking about sensitivity reminds me of a monthlong artist residency I once attended with two other artists in an extremely remote location in the Sierra Nevada. There wasn’t much to do at night, so one of the artists and I would sometimes sit on the roof and watch the sunset. She was Catholic and from the Midwest; I’m sort of the quintessential California atheist. I have really fond memories of the languid, meandering conversations we had up there about science and religion. And what strikes me is that neither of us ever convinced the other—that wasn’t the point—but we listened to each other, and we did each come away different, with a more nuanced understanding of the other person’s position. So connectivity is a share or, conversely, a trigger; sensitivity is an in-person conversation, whether pleasant or difficult, or both. Obviously, online platforms favor connectivity, not simply by virtue of being online, but also arguably for profit, since the difference between connectivity and sensitivity is time, and time is money. Again, too expensive. As the body disappears, so does our ability to empathize.

Google and Apple offer the image of a pseudo-commons to Internet users. That image recalls Nick Dyer-Whiteford's claim that, in light of the structural failures of neoliberal policies, capital could "turn to a 'Plan B', in which limited versions of commons, pollution trading schemes, community development and open-source and file-sharing practices are introduced as subordinate aspects of a capitalist economy, where voluntary cooperation subsidizes profit. One can think here of how Web 2.0 re-appropriates many of the innovations of radical digital activists, and converts them into a source of rent." Indeed, with the rise of the trademarked Digital Commons software platform and with the proliferation of university-based digital and media commons (which are typically limited to fee-paying and/or employed university community members), the very concept of the digital commons appears to be one of these reappropriations. But if, as part of what James Boyle describes as the "Second Closure Movement," this very rhetorical move signals the temporary defeats of the after-globalization and radical hacker movements that claimed the language of the commons, perhaps the advocacy for ownership of digital wares (or at least a form of unalienable, absolute possession, whether individual or communal) would provide a strategic ballast against the proprietary control of large swathes of information by apparently benevolent corporations and institutions. While still dangling in mid-air, the information commodity's consumption might thereby be placed more solidly on common ground.

Beyond the US Army’s apps platform, it seems that every industry today relies upon some form of platform business model—many of them internet-based. Doctors quickly cross-check prescriptions to identify interactions between drugs, job-seekers exchange insights about various employers, and property values and other attributes of a given zip code are easily comparable. Successful platforms in a solution economy exhibit one or more of these three characteristics: (1) they invite participants to collaborate and exchange at little or no cost; (2) they encourage decentralized, user-generated content; and (3) they enable average citizens to contribute to problem solving.

scale. The so-called Yegge Rant, executive Steve Yegge’s

this powerfully positive growth dynamic makes monetization very tricky. Any charge levied on users is likely to discourage them from participating on the platform. Charging for access may lead people to avoid the platform altogether; charging for usage may inhibit frequent participation; charging for production reduces value creation, making the platform less attractive to consumers; and charging for consumption reduces consumption, making the platform less attractive to producers.

The lesson? Network effects as measured by numbers of visitors alone don’t necessarily reflect the monetary value of a platform. The interactions facilitated must generate a significant amount of excess value that can be captured by the platform without producing a negative impact on network effects. When that’s not the case, monetization may not be possible.

It’s a mistake to assume that network effects can always be optimized by simply refraining from charging users. A better approach to analyzing the monetization challenge is to ask these questions: How can we generate revenues without reducing our positive network effects? Can we devise a pricing strategy that strengthens our positive network effects while reducing our negative network effects? Can we create a strategy that encourages desirable interactions and discourages undesirable ones?

The implicit assumption in traditional business strategy that competition is a zero-sum game is far less applicable in the world of platforms. Rather than re-dividing a pie of more-or-less static size, platform businesses often grow the pie (as, for example, Amazon has done by innovating new models, such as self-publishing and publishing on demand, within the traditional book industry) or create an alternative pie that taps new markets and sources of supply (as Airbnb and Uber have done alongside the traditional hotel and taxi industries). Actively managing network effects changes the shape of markets rather than taking them as fixed.

Multihoming occurs when users engage in similar types of interactions on more than one platform.

as the story of Monster versus LinkedIn demonstrated, a platform that offers superior value to users can win a competitive battle despite an initial size disadvantage.

The four forces that most often characterize winner-take-all markets are supply economies of scale, strong network effects, high multihoming or switching costs, and lack of niche specialization.

this is not a story about consumer harm based on monopoly pricing, although that can be part of the problem. The graver problem is that the pace of innovation may be slowed, denying consumers the full benefits of technological progress that a dynamically competitive market would offer.” This phenomenon has been dubbed excess inertia, referring to the power of network effects to slow or prevent the adoption of new, perhaps better, technologies. When one or a few platforms can dominate a particular market because of the power of network effects, they may choose to resist beneficial innovations in order to protect themselves from the costs of change and other disruptive effects.

in a world of abundant information, regulation based on data-driven accountability makes more sense. Firms like Uber and Airbnb can be granted freedom to operate in exchange for access to their data. Because it is possible to know exactly who did what to whom and when, consumers and regulators can hold people and platforms accountable for their behaviors after the fact.

Under Grossman’s Regulation 2.0 scheme, government regulatory agencies would operate quite differently from the way they do today. Rather than establishing rules of market access, their primary job would be to establish and enforce requirements for after-the-fact transparency. Grossman imagines a city government responding to the arrival of Uber by passing an ordinance that states: “Anyone offering for-hire vehicle services may opt out of existing regulations as long as they implement mobile dispatch, e-hailing, and e-payments, 360-degree peer-review of drivers and passengers, and provide an open data API for public auditing of system performance with regards to equity, access, performance, and safety.”54

The second framework, developed by David S. Evans, proposes a three-step process to test for the desirability of government regulatory action. The first step is to examine whether the platform has a functioning internal governance system in place. The second step is to see whether the governance system is mostly being used to reduce negative externalities that would harm the platform (such as criminal behavior by users) or to reduce competition or take advantage of a dominant market position. If, on balance, the firm is using its governance system to deter negative externalities, then no further action is necessary. However, if the governance system appears to encourage anticompetitive practices, then a third and final step is required. This step involves asking whether the anticompetitive behavior outweighs the positive benefits of the governance system. If so, then a violation has occurred, and a regulatory response is required. If not, then no further action is needed.60

Proponents of low regulation are likely to urge restraint in applying government pressure to platform businesses, especially during the startup phase. After all, they might reason, the harm done to the marketplace or to the general public by a startup company is likely to be relatively small, especially when compared with the potential positive effects to be derived from innovation, new business model development, and economic growth. The time to apply the rules more stringently will come later, once the start up has grown to the point where the costs and benefits of regulation are both reasonable.

we would encourage regulators to have a light touch in order to encourage innovation. Change often provokes anxiety, and there’s an understandable impulse to slow the pace of technological and economic innovation in order to fend off unforeseeable consequences that may be harmful. But history suggests that, in most cases, allowing change to flourish leads mainly to positive results in the long run.

The power of the platform is modifying—even erasing—many other, similar barriers that once separated industries from one another. Thus, one of the most dramatic effects of the rise of the platform has been the emergence of unexpected new competitors from seemingly unrelated industry sectors. Bear this in mind as you consider the possible future impact of the platform model on your own industry, whatever it may be.

Click the Medicast app, describe your symptoms, and a physician is guaranteed to arrive within two hours.

One assumption that is already being shattered is the idea that only routine, semi-skilled jobs like taxi driving, food delivery, or household chores are susceptible. Even traditional professions like medicine and law are proving to be susceptible to platform models. We’ve already mentioned Medicast, which applies an Uber-like model to finding a doctor. Several platform companies are providing online venues where legal services are available with comparable ease, speed, and convenience. Axiom Law has built a $200 million platform business by using a combination of data-mining software and freelance law talent to provide legal guidance and services to business clients; InCloudCounsel claims it can process basic legal documents such as licensing forms and nondisclosure agreements at a savings of up to 80 percent compared with a traditional law firm.11 In the decades to come, it seems likely that the platform model will be applied—or at least tested—in virtually every market for labor and professional services. How will this trend impact the service industries—not to mention the working lives of hundreds of millions of people? One likely result will be an even greater stratification of wealth, power, and prestige among service providers. Routine and standardized tasks will move to online platforms, where an army of relatively low-paid, self-employed professionals will be available to handle them. Meanwhile, the world’s great law firms, medical centers, consulting partnerships, and accounting practices will not vanish, but their relative size and importance will shrink as much of the work they used to do migrates to platforms that can provide comparable services at a fraction of the cost and with far greater convenience. A surviving handful of world-class experts will increasingly focus on a tiny subset of the most highly specialized and challenging assignments, which they can tackle from anywhere in the world using online tools. Thus, at the very highest level of professional expertise, winner-take-all markets are likely to emerge, with (say) two dozen internationally renowned attorneys competing for the splashiest and most lucrative cases anywhere on the globe.

GLOSSARY

a monetization model is sustainable only when it strengthens network effects (rather than weakening them).

If possible, avoid charging for value that users previously received for free. People naturally resent being told that they have to pay for a good or service they’ve previously received for free—as we saw in the case of Meetup.

Consider potential monetization strategies when making your initial platform design choices. From the time of launch, a platform should be architected in a manner that affords it control over possible sources of monetization. This directly impacts how open or closed the platform is. For example, if platform managers hope to monetize through a transaction fee, they need to ensure that the platform design makes it possible for them to capture control of transactions. If platform managers hope to monetize by charging for access to their user base, the platform should be designed to control the avenues through which content reaches the users as well as the flow of data about users.

A platform is “open” to the extent that (1) no restrictions are placed on participation in its development, commercialization, or use; or (2) any restrictions—for example, requirements to conform with technical standards or pay licensing fees—are reasonable and non-discriminatory, that is, they are applied uniformly to all potential platform participants.2

When Facebook launched Facebook Platform to help developers create apps in May 2007, the big shift began. An ecosystem of partners willing to extend the capabilities of Facebook quickly took root.7 By November 2007, there were 7,000 outside applications on the site.8 Recognizing how this flood of new apps was enhancing its rival’s appeal, Myspace responded by opening to developers in February 2008. But the tide had already turned,

Having studied both the possible risks and the likely rewards, the Guardian’s managers decided both to “open in” the website, by bringing in more data and applications from the outside, and to “open out” the site, by enabling partners to create products using Guardian content and services on other digital platforms. To work toward the “open out” goal, the Guardian created a set of APIs that made its content easily available to external parties. These interfaces include three different levels of access. The lowest access tier, which the paper calls Keyless, allows anyone to use Guardian headlines, metadata, and information architecture (that is, the software and design elements that structure Guardian data and make it easier to access, analyze, and use) without requesting permission and without any requirement to share revenues that might be generated. The second access tier, Approved, allows registered developers to reprint entire Guardian articles, with certain time and usage restrictions. Advertising revenues are shared between the newspaper and the developers. The third and highest access tier, Bespoke, is a customized support package that provides unlimited use of Guardian content—for a fee.

Cloud computing and computer services platform Salesforce generates 50 percent of its revenues through APIs, while for travel platform Expedia, the figure is 90 percent.

By attempting to grab an even bigger share of the profits from its coffee-making platform, Green Mountain had angered its community and forfeited profits. The king of coffee had violated three fundamental rules of good governance: • Always create value for the consumers you serve; •    Don’t use your power to change the rules in your favor; and • Don’t take more than a fair share of the wealth.

Platform businesses at this scale control economic systems that are bigger than all but the biggest national economies. No wonder Brad Burnham, one of the lead investors at Union Square Ventures, responded to the introduction of Facebook Credits—a short-lived system of virtual currency for use in playing online games—by wondering what the move said about Facebook’s monetary policy.

In general, there are four main causes of market failures: information asymmetry, externalities, monopoly power, and risk.

A broader view of platform governance uses insights borrowed from the practices of nation-states as modeled by constitutional law scholar Lawrence Lessig. In Lessig’s formulation, systems of control involve four main sets of tools: laws, norms, architecture, and markets.20 A familiar example can be used to clarify these four kinds of tools. Suppose leaders of a particular ecosystem want to reduce the harmful effects of smoking. Laws could be passed to ban cigarette sales to minors or forbid smoking in public spaces. Norms—informal codes of behavior shaped by culture—could be applied by using social pressure or advertising to stigmatize smoking and make it appear “uncool.” Architecture could be used to develop physical designs that reduce the impact of smoking—for example, air filters that clean the air, or smokeless devices that substitute for cigarettes. And market mechanisms could be used by taxing tobacco products or subsidizing “quit smoking” programs. Historically, those who want to control social behavior—including platform managers—have employed all four of these tools.

The enterprise management platform company SAP uses a social currency like that of iStockphoto or Stack Overflow to motivate developers to answer one another’s questions. Points earned when the employee of a development company answers a question are credited to a company account; when the account reaches a specified level, SAP makes a generous contribution to a charity of the company’s choice. The system has saved SAP $6–8 million in tech support costs, generated numerous new product and service ideas, and reduced average response time

Even more interesting, SAP has used the social currency supply to stimulate its developer economy in the same way as the Federal Reserve uses the money supply to stimulate the U.S. economy. When SAP introduced a new customer relationship management (CRM) product, it offered double points on any answer, code, or white paper relating to CRM. During the two-month duration of this “monetary expansion” policy, developers found gaps in the software and devised new features at a vastly higher rate.43 Used as a money supply, the increased flow of social currency caused overall economic output to rise. In effect, SAP employed an expansionary monetary policy to stimulate growth—and it worked.

For example, in the 1960s, credit card companies, which host the two-sided merchant and cardholder platform, resisted insuring cardholders against fraud on their cards. They argued that insurance would promote fraud as consumers would become careless with their cards, and that banks forced to absorb more risk would become more reluctant to extend credit, hurting low-income consumers. Over the vigorous objections of major banks, the Fair Credit Reporting Act (1970) and a subsequent amendment required fraud insurance, imposing a limit of $50 on consumer liability for fraudulent use of a credit card. The disaster predicted by the credit card companies did not occur. Freed from the fear of fraud, consumers used their cards so much more often that the increase in interaction volume more than offset the increase in fraud. The business benefit from fraud insurance is so powerful that, in order to encourage adoption and use, many banks now waive the $50 charge if consumers report a lost or stolen card within twenty-four hours.45

This is a guidebook for a fairer kind of Internet. While we intend to foster something new in the online economy, we do so by turning to something old: the long tradition of cooperative enterprise. The problems of labor abuse and surveillance that have arisen with the “sharing economy,” also, are not entirely new; they have much in common with struggles on nineteenth-century factory floors. By considering the emerging platforms in light of well-hewn cooperative principles and practices, we find an optimistic vision for the future of work and life.

Frictionless entry is the ability of users to quickly and easily join a platform and begin participating in the value creation that the platform facilitates. Frictionless entry is a key factor in enabling a platform to grow rapidly.

Threadless is a T-shirt company founded by people with expertise in information technology services, web design, and consulting. Their business model involves holding weekly design contests open to outside participants, printing only T-shirts with the most popular designs, and selling them to their large and growing customer base. Threadless doesn’t need to hire artistic talent, since skilled designers compete for prizes and prestige. It doesn’t need to do marketing, since eager designers contact their friends to solicit votes and sales. It doesn’t need to forecast sales, since voting customers have already announced what numbers they will buy. By outsourcing production, Threadless can also minimize its handling and inventory costs. Thanks to this almost frictionless model, Threadless can scale rapidly and easily, with minimal structural restrictions.

1.  Staging value creation. The platform managers arrange for the creation of value units that will attract one or more sets of users and demonstrate the potential benefits of participating in the platform.5 Those initial users create more value units, attract still other users, and set up a positive feedback loop that leads to continuing growth.6 The Huffington Post followed this strategy by hiring writers to create an initial array of high-quality blog posts for the site, thereby attracting readers. Some of these readers began contributing blog posts of their own, leading to the gradual development of a wider network of content creators and attracting even more readers.

There is no sector the new model will not touch. Everywhere it goes, it brings a wholly new dynamic characterized by greater levels of innovation; devolution of risk to smaller companies; a significant dependency on open-source communities that work with their own rules and values; and a vastly accelerated economic pace where commentators now talk of innovation as “continuous deployment” or “continuous delivery.

did you ever hear of a politician who wasn’t elected on a platform of economy in office?” “That isn’t it,” I said. “Oh yes it is, lover. I can remember way back. Even then all politicians were promising economy, and still it wasn’t new. They’d always hold up the extravagances of the past administration before the horrified eyes of the voters. They’d pledge greater economy and get elected.—And there’s never a case on record, lover, where a politician hasn’t spent more than his predecessor in office.

The political version of this was the seemingly clearcut choice before the New Left, to either transform the Establishment from within (the Long March through the institutions envisioned by the Prague Spring reformers and Western social democrats alike), or else to instigate an actual revolution in the streets. History teaches us that both options were illusory; national social democracy could temporarily flourish in the hothouse export-platform economies of Central Europe, but a resurgent neoliberalism was about to strangle the effective global demand this model depended on and thus reactivate the latent class tensions smoothed over by the golden age of state-monopoly Keynesianism; meanwhile the national-democratic and anti-colonial revolutions in the Second and Third Worlds could defeat the US Empire’s rampaging armies with guerilla tactics, but could hardly be expected to counter the far more insidious enemy of falling raw materials prices on world markets. Neither international solidarity actions nor neo-national political disruptions were, by themselves, really capable of challenging the henceforth global habitus of multinational capitalism; only truly transnational labor and political movements would be able to do that.

Positive network effects refers to the ability of a large, well-managed platform community to produce significant value for each user of the platform.

In some cases, the growth of a platform can be facilitated by an effect we call side switching. This occurs when users of one side of the platform join the opposite side—for example, when those who consume goods or services begin to produce goods and services for others to consume.

successful platforms begin with a single core interaction that consistently generates high value for users.

Platforms must perform three key functions in order to encourage a high volume of valuable core interactions, which we summarize as pull, facilitate, and match.

All of which helps clarify what’s so alarming about the contemporary online “attention economy,” of which we’ve heard so much in recent years: it’s essentially a giant machine for persuading you to make the wrong choices about what to do with your attention, and therefore with your finite life, by getting you to care about things you didn’t want to care about. And you have far too little control over your attention simply to decide, as if by fiat, that you’re not going to succumb to its temptations. Many of us are familiar by now with the basic contours of this situation. We know that the “free” social media platforms we use aren’t really free, because, as the saying goes, you’re not the customer but the product being sold: in other words, the technology companies’ profits come from seizing our attention, then selling it to advertisers.

was running out of valuable athletic clichés. Would beach volleyball say much about proposals for federal health care reform? Could I use mumblety-peg comparisons to explain the North American Free Trade Agreement negotiations? Golf, however, is ideal for these purposes. “Christian fundamentalists put a wicked slice in the Republican party platform.” “Somebody should replace the divot on the back of Al Gore’s head.” “Let’s go hit Congress with a stick.” I also wanted a sport with a lot of equipment. All truly American sports are equipment intensive. Basketball was strictly for hoop-over-the-barn-door Hoosiers and Jersey City Y’s until two-hundred-dollar gym shoes were invented. And synchronized swimming will never make it to network prime time because how often do you need new nose plugs? I’m an altruistic guy, in my own Reaganomics way. Sports gear purchases are about all that’s keeping the fragile U.S. economy alive, and you’d have to get into America’s Cup yachting or cross-country airplane racing to find a sport that needs more gear than golf. I’ve bought the shoes, hats, socks, pants, shirts, umbrellas, windbreakers, and plus fours—all in colors that Nirvana fans wouldn’t dye their hair. Then there are the drivers, irons, putters, and the special clubs: parking-lot wedge, back-of-the-tree mashie, nearby highway niblick. MasterCard has installed a plaque on the wall of its headquarters to commemorate my taking up golf.

Black Mirror” version of our future could become our everyday reality. A technological “lock-in” could occur, where dysfunctional and/or proprietary technologies become permanently embedded into the infrastructure of our global systems leaving us powerless to alter the course of their direction or ferocity of their speed. A Web 3.0 that continues its march toward centralized power and siloed platforms would not only have crippling effects on innovation, it would have chilling effects on our freedom of speech, freedom of thought, and basic human rights. This should be enough to compel us to take thoughtful but aggressive action to prevent such a lock-in from occurring at all costs. Thankfully, there is also a “white mirror” version of Web 3.0, a positive future not well described in our sci-fi stories. It’s the one where we intentionally and consciously harness the power of the Convergence and align it with our collective goals, values, and greatest ambitions as a species. In the “white mirror” version, we have the opportunity to use these technologies to assist us in working together more effectively to improve our ecologies, economies, and governance models, and leave the world better than the one we entered.

Given the historical importance and exponential power ascribed to Convergence technologies, a comprehensive vision is required that describes how these technologies will be best aligned with our core human values and what the implications will be if they are not. Piecemeal descriptions and industry-centric narratives do not provide the holistic vantage point from which we must consider how best to make the critically important decisions regarding matters of privacy, security, interoperability, and trust in an age where powerful computing will literally surround us. If we fail to make the right societal decisions now, as we are laying the digital infrastructure for the 21st century, a dystopic “Black Mirror” version of our future could become our everyday reality. A technological “lock-in” could occur, where dysfunctional and/or proprietary technologies become permanently embedded into the infrastructure of our global systems leaving us powerless to alter the course of their direction or ferocity of their speed. A Web 3.0 that continues its march toward centralized power and siloed platforms would not only have crippling effects on innovation, it would have chilling effects on our freedom of speech, freedom of thought, and basic human rights. This should be enough to compel us to take thoughtful but aggressive action to prevent such a lock-in from occurring at all costs. Thankfully, there is also a “white mirror” version of Web 3.0, a positive future not well described in our sci-fi stories. It’s the one where we intentionally and consciously harness the power of the Convergence and align it with our collective goals, values, and greatest ambitions as a species. In the “white mirror” version, we have the opportunity to use these technologies to assist us in working together more effectively to improve our ecologies, economies, and governance models, and leave the world better than the one we entered.

In this chapter I will argue that there are three moments in the relatively recent history of capitalism that are particularly relevant to the current conjuncture: the response to the 1970s downturn; the boom and bust of the 1990s; and the response to the 2008 crisis. Each of these moments has set the stage for the new digital economy and has determined the ways in which it has developed.

Akeneo, Salsify, or Stibo STEP.

if Ai calculations are correct, we will destroy all life on our planet within 300 years unless we adjust our global economic model to a more sustainable one with two non-negotiable features: 1. We cease to pollute Earth's waters and clean it up. 2. We create an energy neutral economy.

The digital-attention economy amplifies the social impact of this dynamic exponentially. Remember that the number of seconds in your day never changes. The amount of social media content competing for those seconds, however, doubles every year or so, depending on how you measure it. Imagine, for instance, that your network produces 200 posts per day, of which you have time to read 100. Because of the platforms’ tilt, you will see the most moral-emotional half of your feed. Next year, when 200 doubles to 400, you see the most moral-emotional quarter. The year after that, the most moral-emotional eighth. Over time, your impression of your own community becomes radically more moralizing, aggrandizing, and outraged—and so do you.

But the platforms serve the central function of coordinating activities, structuring the relationship, and providing the backbone. For example, they provide billing and collection as well as ensuring the safety and security of all parties involved.

At the July Republican Convention, “never-Trump” delegates fought his nomination, only to be outraged at rules changes that gave Trump far more delegates than he had earned. Still, some could be comforted by the 2016 Republican platform, which offered Movement Conservative Republicans everything they had ever dreamed of. The platform chastised President Barack Obama for “regulating to death a free market economy that he does not like and does not understand” (which was manifestly untrue), called for originalist judges who would stop abortion and gay marriage, and insisted on returning federal power to the states.

In its simplest form, the sharing economy is composed of hundreds of online platforms that enable people to turn otherwise unproductive assets into income producing ones.

Trust is needed also in transactions that take time to complete. People are reluctant to invest in the absence of some assurance that the others’ promises will be kept. For these and other reasons, a modern market economy needs a platform sturdy enough to support highly complex dealings.

What is the Sharing Economy? “This boom marks a striking new stage in a deeper transformation. Using the now ubiquitous platform of the smartphone to deliver labour and services in a variety of new ways will challenge many of the fundamental assumptions of 20th-century capitalism, from the nature of the firm to the structure of careers.” – Economist, December 24, 2014 The sharing economy has many synonyms: tech-based capitalism, sharing marketplaces, collaborative consumption, access economy, collaborative economy, 1099 economy, and the list goes on and on. Although we appreciate the complexity of this disruptive technological shift, for the purposes of this book we will simply refer to it as the sharing economy. In its simplest form, the sharing economy is composed of hundreds of online platforms that enable people to turn otherwise unproductive assets into income producing ones. These include their homes, cars, parking spots, clothes, consumer items, pets, hobbies, and many others.

And innovation is no longer the province of in-house experts and research and development labs, but is produced through crowdsourcing and the contribution of ideas by independent participants in the platform.

As a result of the rise of the platform, almost all the traditional business management practices—including strategy, operations, marketing, production, research and development, and human resources—are in a state of upheaval. We are in a disequilibrium time that affects every company and individual business leader. The coming of the world of platforms is a major reason why. 

Strategy has moved from controlling unique internal resources and erecting competitive barriers to orchestrating external resources and engaging vibrant communities. And

hadn’t been able to avoid hearing about the Tea Party, a recrudescence of the far right sooner than I would’ve hoped. Depending on whom you ask, the Tea Party formed either as a spontaneous grassroots protest against the government’s massive interventions in the economy after the financial collapse of 2008, an hysterical backlash against our first black president, or just a hasty rebranding of the Republican Party now that the name Republican had taken on the same stigma as the Pinto, DC-10, and other products that reliably self-destruct. Their platform was the usual Republican wish list—cut taxes, gut the government, repeal the last century and revoke the social contract—and happened to coincide with the financial interests of their billionaire backers. They were widely regarded, on the left,* as dingbats. But today I was going to resist the impulse to sneer and feel superior and instead try, for once, to listen.

Platform competition requires treating buyers and suppliers not as separate threats to be subjugated but as value-creating partners to be wooed, celebrated, and encouraged to play multiple roles.

Overcomplex metrics make management less effective by introducing noise, discouraging frequent analysis, and distracting from the handful of data points that are most significant.

Don’t fall into the trap of trying to measure everything. What I’ve learned is that in the early days, what matters most is having customers who love and use your product. Figure out the one or two best measures to determine this.

Like it or not, firms like these already serve as the unofficial and unelected regulators of millions of lives. For this reason, platforms have much to learn from cities and states, which have had thousands of years to evolve principles of good governance.

Author Steve Denning has highlighted the weakness of Porter’s assumption that the purpose of strategy is to avoid competition. Denning pointed instead to management guru Peter Drucker’s dictum that the purpose of business is “to create a customer.

Until financial incentives are aligned to encourage universal sharing of patient services and data, the growth of platforms within health care may be slow. Helping to bring about this alignment should be a key focus of regulators and industry leaders.

As CEO Zhang pointed out to us, the size of a company’s advertising budget might be viewed as a reflection of the distance between the company and its customers. For example, the annual brand value report issued in 2013 by the consulting firm Interbrand noted that Google’s advertising budget is just a tiny fraction of Coca-Cola’s. The likely reason: Google is deeply integrated into people’s lives through its many productivity and social applications, giving it constant user feedback that Coca-Cola doesn’t receive.

The division of labor into smaller and smaller units of work, which Adam Smith recognized as a key to the productive capability of organizations almost three centuries ago, is likely to continue, powered by increasingly smart algorithms that are capable of breaking down a complex job into tiny, simple tasks to be handled by hundreds of workers, then reassembling the results into a unified whole. Amazon

The shift from protecting value inside the firm to creating value outside the firm means that the crucial factor is no longer ownership but opportunity, while the chief tool is no longer dictation but persuasion.

Platforms beat pipelines because platforms scale more efficiently by eliminating gatekeepers. Until recently, most businesses were built around products, which were designed and made at one end of the pipeline and delivered to consumers at the other end.* Today, plenty of pipeline-based businesses still exist—but when platform-based businesses enter the same marketplace, the platforms virtually always win.

a platform is fundamentally an infrastructure designed to facilitate interactions among producers and consumers of value. These two basic types of participants use the platform to connect with each other and to engage in exchanges—first, an exchange of information; then, if desired, an exchange of goods or services in return for some form of currency.

Most consumers appear to be willing to trade access to detailed data about their spending behavior for easy access to credit. But many may not fully appreciate the fact that the same dynamics that power the credit agencies underlie the services provided by “free” information service businesses—the data aggregators we described in chapter 7. If

The platform system can grow to scale more rapidly and efficiently because the traditional gatekeepers—editors—are replaced by market signals provided automatically by the entire community of readers.

Strategy has moved from controlling unique internal resources and erecting competitive barriers to orchestrating external resources and engaging vibrant communities.

Thus, every platform business must be designed to facilitate the exchange of information.

Yet, in most cases, platforms don’t create value units; instead, they are created by the producers who participate in the platform. Thus, platforms are “information factories” that have no control over inventory.

Facebook’s news feed is a classic multiuser feedback loop. Status updates from producers are served to consumers, whose likes and comments serve as feedback to the producers. The constant flow of value units stimulates still more activity, making the platform increasingly valuable to all participants.

Remember that one of the key characteristics that distinguishes a platform from a traditional business is that most of the activity is controlled by users, not by the owners or managers of the platform. It’s inevitable that participants will use the platform in ways you never anticipated or planned.