Platform Revolution Quotes

In some cases, they are already doing so. Influenced by a coalition of community groups, the New York City Council passed a historic budget in the summer of 2014 that created a $1.2 million fund for the growth of worker-owned cooperatives. Richmond, California has hired a cooperative developer and is launching a loan fund; Cleveland, Ohio has been actively involved in starting a network of cooperatives, as we’ll see in the next chapter; and Jackson, Mississippi elected a mayor (Chokwe Lumumba) in 2013 on a platform that included the use of public spending to promote co-ops. On the federal level, progressive politicians like Bernie Sanders are working to get the government more involved in supporting employee ownership.130

Silicon Valley dreams of destructive revolution, and platforms designed in ways that supercharge identity into a matter of totalizing and existential conflict.

The next phase of the Digital Revolution will bring even more new methods of marrying technology with the creative industries, such as media, fashion, music, entertainment, education, literature, and the arts. Much of the first round of innovation involved pouring old wine—books, newspapers, opinion pieces, journals, songs, television shows, movies—into new digital bottles. But new platforms, services, and social networks are increasingly enabling fresh opportunities for individual imagination and collaborative creativity. Role-playing games and interactive plays are merging with collaborative forms of storytelling and augmented realities. This interplay between technology and the arts will eventually result in completely new forms of expression and formats of media. This innovation will come from people who are able to link beauty to engineering, humanity to technology, and poetry to processors. In other words, it will come from the spiritual heirs of Ada Lovelace, creators who can flourish where the arts intersect with the sciences and who have a rebellious sense of wonder that opens them to the beauty of both.

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.

party….” In New York, several thousand gathered at Tompkins Square. The tone of the meeting was moderate, speaking of “a political revolution through the ballot box.” And: “If you will unite, we may have here within five years a socialistic republic…. Then will a lovely morning break over this darkened land.” It was a peaceful meeting. It adjourned. The last words heard from the platform were: “Whatever we poor men may not have, we have free speech, and no one can take it from us.” Then the police charged, using their clubs.

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

The Constitution, the National Assembly, the dynastic parties, the blue and the red republicans, the heroes of Africa, the thunder from the platform, the sheet lightning of the daily press, the entire literature, the political names and the intellectual reputations, the civil law and penal code, the liberté, égalité, fraternité and the second of May 1852—all have vanished like a phantasmagoria before the spell of a man whom even his enemies do not make out to be a magician. Universal suffrage seems to have survived only for a moment, in order that with its own hand it may make its last will and testament before the eyes of all the world and declare in the name of the people itself: Everything that exists has this much worth, that it will perish.

I have been taunted on various platforms recently for becoming a neo-conservative, and have been the object of some fascinating web-site and blog stuff, from the isolationist Right as well as from the peaceniks, who both argue in a semi-literate way that neo-conservativism is Trotskyism and 'permanent revolution' reborn. Sometimes, you have to comb an overt anti-Semitism out of this propaganda before you can even read it straight. And I can guarantee you that none of these characters has any idea at all of what the theory of 'permanent revolution' originally meant.

Platforms vary from country to country, between right-wing populists and left-wing populists, but they share a dismissive attitude toward norms and practices like free speech, parliamentary procedures, and independent institutions.

The combination of GNU and Linux created an operating system that has been ported to more hardware platforms, ranging from the world’s ten biggest supercomputers to embedded systems in mobile phones, than any other operating system.

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.

most memorable moment came when someone asked if Mr. Trump supported the Reform Party platform.”9 “Well. Nobody knows what the Reform Party platform is,” Trump loudly responded. A man offered Trump a copy of the platform as boos rang out from the crowd. The fact is that no one really cares about a party platform except those people who write it. Unfortunately, those were the exact people Trump was addressing.

The combination of GNU and Linux created an operating system that has been ported to more hardware platforms, ranging from the world’s ten biggest supercomputers to embedded systems in mobile phones, than any other operating system. “Linux is subversive,” wrote Eric Raymond. “Who would have thought that a world-class operating system could coalesce as if by magic out of part-time hacking by several thousand developers scattered all over the planet,

The great majority of those who, like Frankl, were liberated from Nazi concentration camps chose to leave for other countries rather than return to their former homes, where far too many neighbors had turned murderous. But Viktor Frankl chose to stay in his native Vienna after being freed and became head of neurology at a main hospital in Vienna. The Austrians he lived among often perplexed Frankl by saying they did not know a thing about the horrors of the camps he had barely survived. For Frankl, though, this alibi seemed flimsy. These people, he felt, had chosen not to know. Another survivor of the Nazis, the social psychologist Ervin Staub, was saved from a certain death by Raoul Wallenberg, the diplomat who made Swedish passports for thousands of desperate Hungarians, keeping them safe from the Nazis. Staub studied cruelty and hatred, and he found one of the roots of such evil to be the turning away, choosing not to see or know, of bystanders. That not-knowing was read by perpetrators as a tacit approval. But if instead witnesses spoke up in protest of evil, Staub saw, it made such acts more difficult for the evildoers. For Frankl, the “not-knowing” he encountered in postwar Vienna was regarding the Nazi death camps scattered throughout that short-lived empire, and the obliviousness of Viennese citizens to the fate of their own neighbors who were imprisoned and died in those camps. The underlying motive for not-knowing, he points out, is to escape any sense of responsibility or guilt for those crimes. People in general, he saw, had been encouraged by their authoritarian rulers not to know—a fact of life today as well. That same plea of innocence, I had no idea, has contemporary resonance in the emergence of an intergenerational tension. Young people around the world are angry at older generations for leaving as a legacy to them a ruined planet, one where the momentum of environmental destruction will go on for decades, if not centuries. This environmental not-knowing has gone on for centuries, since the Industrial Revolution. Since then we have seen the invention of countless manufacturing platforms and processes, most all of which came to be in an era when we had no idea of their ecological impacts. Advances in science and technology are making ecological impacts more transparent, and so creating options that address the climate crisis and, hopefully, will be pursued across the globe and over generations. Such disruptive, truly “green” alternatives are one way to lessen the bleakness of Earth 2.0—the planet in future decades—a compelling fact of life for today’s young. Were Frankl with us today (he died in 1997), he would no doubt be pleased that so many of today’s younger people are choosing to know and are finding purpose and meaning in surfacing environmental facts and acting on them.

Labourism was to be the bete noire of the Party, hated as much as the capitalist system itself. Its growth was to lead to the hardening of Party attitudes almost to the point where even the wish to improve everyday conditions was considered iniquitous. The resentment was heated by the fact that many of the rising Labour leaders had been fellow members of the Social Democratic Federation and once professed the revolution.No words were strong enough for the Party's contempt. In the the Socialist Standard they were 'fakirs', a strong allusion to self-seeking piety, and on the platforms 'Labour bleeders',...

By tracing the early history of USCYBERCOM it is possible to understand some of the reasons why the military has focused almost completely on network defense and cyber attack while being unaware of the need to address the vulnerabilities in systems that could be exploited in future conflicts against technologically capable adversaries. It is a problem mirrored in most organizations. The network security staff are separate from the endpoint security staff who manage desktops through patch and vulnerability management tools and ensure that software and anti-virus signatures are up to date. Meanwhile, the development teams that create new applications, web services, and digital business ventures, work completely on their own with little concern for security. The analogous behavior observed in the military is the creation of new weapons systems, ISR platforms, precision targeting, and C2 capabilities without ensuring that they are resistant to the types of attacks that USCYBERCOM and the NSA have been researching and deploying. USCYBERCOM had its genesis in NCW thinking. First the military worked to participate in the information revolution by joining their networks together. Then it recognized the need for protecting those networks, now deemed cyberspace. The concept that a strong defense requires a strong offense, carried over from missile defense and Cold War strategies, led to a focus on network attack and less emphasis on improving resiliency of computing platforms and weapons systems.

On the train I had a lot of time to think. I thought how in the thirty years of my life I had seldom gotten on a train in America without being conscious of my color. In the South, there are Jim Crow cars and Negroes must ride separate from the whites, usually in a filthy antiquated coach next to the engine, getting all the smoke and bumps and dirt. In the South, we cannot buy sleeping car tickets. Such comforts are only for white folks. And in the North where segregated travel is not the law, colored people have, nevertheless, many difficulties. In auto buses they must take the seats in the rear, over the wheels. On the boats they must occupy the worst cabins. The ticket agents always say that all other accommodations are sold. On trains, if one sits down by a white person, the white person will sometimes get up, flinging back an insult at the Negro who has dared to take a seat beside him. Thus it is that in America, if you are yellow, brown, or black, you can never travel anywhere without being reminded of your color, and oft-times suffering great inconveniences. I sat in the comfortable sleeping car on my first day out of Moscow and remembered many things about trips I had taken in America. I remembered how, once as a youngster going alone to see my father who was working in Mexico, I went into the dining car of the train to eat. I sat down at a table with a white man. The man looked at me and said, "You're a nigger, ain't you?" and left the table. It was beneath his dignity to eat with a Negro child. At St. Louis I went onto the station platform to buy a glass of milk. The clerk behind the counter said, “We don't serve niggers," and refused to sell me anything. As I grew older I learned to expect this often when traveling. So when I went South to lecture on my poetry at Negro universities, I carried my own food because I knew I could not go into the dining cars. Once from Washington to New Orleans, I lived all the way on the train on cold food. I remembered this miserable trip as I sat eating a hot dinner on the diner of the Moscow-Tashkent express. Traveling South from New York, at Washington, the capital of our country, the official Jim Crow begins. There the conductor comes through the train and, if you are a Negro, touches you on the shoulder and says, "The last coach forward is the car for colored people." Then you must move your baggage and yourself up near the engine, because when the train crosses the Potomac River into Virginia, and the dome of the Capitol disappears, it is illegal any longer for white people and colored people to ride together. (Or to eat together, or sleep together, or in some places even to work together.) Now I am riding South from Moscow and am not Jim-Crowed, and none of the darker people on the train with me are Jim-Crowed, so I make a happy mental note in the back of my mind to write home to the Negro papers: "There is no Jim Crow on the trains of the Soviet Union.

[Description of the behind-the-scenes situation of the Beer Hall Putsch] The crowd began to grow so sullen that Goering felt it necessary to step to the rostrum and quiet them. “There is nothing to fear,” he cried. “We have the friendliest intentions. For that matter, you’ve no cause to grumble, you’ve got your beer!” And he informed them that in the next room a new government was being formed. It was, at the point of Adolf Hitler’s revolver. Once he had herded his prisoners into the adjoining room, Hitler told them, “No one leaves this room alive without my permission.” He then informed them they would all have key jobs either in the Bavarian government or in the Reich government which he was forming with Ludendorff. With Ludendorff? Earlier in the evening Hitler had dispatched “Scheubner-Richter to Lud-wigshoehe to fetch the renowned General, who knew nothing of the Nazi conspiracy, to the beerhouse at once. The three prisoners at first refused even to speak to Hitler. He continued to harangue them. Each of them must join him in proclaiming the revolution and the new governments; each must take the post he, Hitler, assigned them, or “he has no right to exist.” Kahr was to be the Regent of Bavaria; Lossow, Minister of the National Army; Seisser, Minister of the Reich Police. None of the three was impressed at the prospect of such high office. They did not answer. Their continued silence unnerved Hitler. Finally he waved his gun at them. “I have four shots in my pistol! Three for my collaborators, if they abandon me. The last bullet for myself!” Pointing the weapon to his forehead, he cried, “If I am not victorious by tomorrow afternoon, I shall be a dead man!” (...) Not one of the three men who held the power of the Bavarian state in their hands agreed to join him, even at pistol point. The putsch wasn’t going according to plan. Then Hitler acted on a sudden impulse. Without a further word, he dashed back into the hall, mounted the tribune, faced the sullen crowd and announced that the members of the triumvirate in the next room had joined him in forming a new national government. “The Bavarian Ministry,” he shouted, “is removed…. The government of the November criminals and the Reich President are declared to be removed. A new national government will be named this very day here in Munich. Not for the first time and certainly not for the last, Hitler had told a masterful lie, and it worked. When the gathering heard that Kahr, General von Lossow and Police Chief von Seisser had joined Hitler its mood abruptly changed. There were loud cheers, and the sound of them impressed the three men still locked up in the little side room. (...) He led the others back to the platform, where each made a brief speech and swore loyalty to each other and to the new regime. The crowd leaped on chairs and tables in a delirium of enthusiasm. Hitler beamed with joy.

Demonstrating for peace to promote war was nothing new. Totalitarianism always requires a tangible enemy. To the ancient Greeks, a holocaust was simply a burnt sacrifice. Khrushchev wanted to go down in history as the Soviet leader who exported communism to the American continent. In 1959 he was able to install the Castro brothers in Havana and soon my foreign intelligence service became involved in helping Cuba's new communist rulers to export revolution throughout South America. At that point it did not work. In the 1950s and 1960s most Latin Americans were poor, religious peasants who had accepted the status quo. A black version of liberation theology began growing in a few radical-leftist black churches in the US where Marxist thought is predicated on a system pf oppressor class ( white ) versus victim class ( black ) and it sees just one solution: the destruction of the enemy. In the 1950s UNESCO was perceived by many as a platform for communists to attack the West and the KGB used it to place agents around the world. Che Guevara's diaries, with an introduction by Fidel Castro, were produced by the Kremlin's dezinformatsiya machine. Changing minds is what Soviet communism was all about. Khrushchev's political necrophagy ( = blaming and condemning one's predecessor in office. It is a dangerous game. It hurts the country's national pride and it usually turns against its own user ) evolved from the Soviet tradition of sanctifying the supreme ruler. Although the communists publicly proclaimed the decisive role of the people in history, the Kremlin and its KGB believed that only the leader counted. Change the public image of the leader and you change history, I heard over and over from Khrushchev's lips. Khrushchev was certainly the most controversial Soviet to reign in the Kremlin. He unmasked Stalin's crimes, but he made political assassination a main instrument of his own foreign policy; he authored a policy of peaceful coexistence with the West but he pushed the world to the brink of nuclear war; he repaired Moscow's relationships with Yugoslavia's Tito, but he destroyed the unity of the communist world. His close association with Stalin's killings made him aware of what political crime could accomplish and gave him a taste for the simple criminal solution. His total ignorance about the civilized world, together with his irrational hatred of the "bourgeoisie" and his propensity to offend people, made him believe that disinformation and threats were the most efficient and dignified way for a Soviet leader to deal with "bourgeois" governments. As that very clever master of deception Yuri Andropov once told me, if a good piece of disinformation is repeated over and over, after a while it will take on a life of its own and will, all by itself, generate a horde or unwitting but passionate advocates. When I was working for Ceausescu, I always tried to find a way to help him reach a decision on his own, rather than telling him directly what I thought he should do about something. That way both of us were happy. From our KGB advisors, I had learned that the best way to ut over a deception was to let the target see something for himself, with his own eyes. By 1999, President Yeltsin's ill-conceived privatization had enabled a small clique of predatory insiders to plunder Russia's most valuable assets. The corruption generated by this widespread looting penetrated every corner of the country and it eventually created a Mafia-style economic system that threatened the stability of Russia itself. During the old Cold War, the KGB was a state within a state. In Putin's time, the KGB now rechristened FSB, is the state. The Soviet Union had one KGB officer for every 428 citizens. In 2004, Putin's Russia had one FSB officer for every 297 citizens.

Companies such as Unilever or Prudential are coming to us and saying, ‘We’re very interested in building better data relationships. Can we leverage your platform? We’re very interested in reducing our data liability.’ They’re seeing that data is increasingly a toxic asset inside of corporations.

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

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.

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.

The Fourth Industrial Revolution comes with digital technologies and platforms, that are now ready for leverage in the way we interact with other people, enterprises, products and services. Technologies like Virtual Reality.

Find a business that’s starting a revolution. A company that’s likely to make a substantial change in the status quo has the following characteristics: It’s creating a product or service that’s wholly new or combines existing technology in a novel way that the competition can’t make or even understand. This product solves a problem—a real pain point—that a lot of customers experience daily. There should be an existing large market. The novel technology can deliver on the company vision—not just within the product but also the infrastructure, platforms, and systems that support it. Leadership is not dogmatic about what the solution looks like and is willing to adapt to their customers’ needs. It’s thinking about a problem or a customer need in a way you’ve never heard before, but which makes perfect sense once you hear it.

The digital businesses that people love today are all built using the platform model.

First, unipolarity created an era of global stability—no major geopolitical struggles, no arms races, and no great-power wars. Second, American ideas became global ideas. The United States encouraged the rest of the world to globalize, liberalize, and democratize. Markets, societies, and political systems all opened up, while technology connected people across the planet on vast open platforms. All of this seemed natural and inevitable, the expression of innate human desires. Americans certainly thought so.

Preamble The Klassik Era was a cultural and musical revolution that swept through Kenya and East Africa in the early 2010s. It was a time of bold experimentation, fearless expression, and unapologetic individuality that challenged the norms of mainstream music and culture. For the first time, young people from the ghettos and slums of Nairobi, Mombasa, and Kisumu could see themselves represented and celebrated in the music and arts scene, and their voices and stories were given a platform like never before. The Klassik Era was characterized by a fusion of different musical genres and styles, from hip-hop and reggae to dancehall and afro-pop, to create a sound that was uniquely Kenyan and African. It was a time when young artists and producers like Blame It On Don (DON SANTO), Kingpheezle, Jilly Beatz, Tonnie Tosh, Kenny Rush, and many others came together under Klassik Nation, a record label that would change the face of Kenyan music forever. The Klassik Era was also marked by a sense of community and camaraderie, with young people from all walks of life coming together to support each other's art and creativity. It was a time when collaborations and features were the norm, and when artists and producers worked together to create something new and exciting. But the Klassik Era was not without its challenges and controversies. It was a time when the Kenyan music industry was dominated by a few powerful players who controlled the airwaves and the mainstream narrative, and who were resistant to change and innovation. It was a time when artists and producers had to fight tooth and nail to get their music played on the radio and to gain recognition and respect from their peers. Despite these challenges, the Klassik Era left an indelible mark on the Kenyan music industry and on the cultural landscape of Africa. It was a time of creativity, passion, and rebellion that inspired a generation of young people to dream big and to believe that anything was possible. This book is a tribute to that era and to the artists and producers who made it all possible.

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

Labour markets, meanwhile, are becoming biased towards a limited range of technical skill sets, and globally connected digital platforms and marketplaces are granting outsized rewards to a small number of “stars”.

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.

Nothing comes from highly planned and organized efforts but start-up energy and passion and newness cause chaos, confusion and ambiguity and that results into great product, platform, innovation and even socail revolution

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.

H. Srikrishnan, then head of transactional banking and operations, gave me an example, ‘We looked at funds transfer—which was manual—such as MTs (mail transfers) and TTs (telegraphic transfers). When we implemented a centralized banking solution, the key things we could do were to sweep across multiple locations and get the balances of customers or transfer funds from one location to another using core banking. Those were big problems we solved.’ HDFC Bank was thus the first among Indian banks to have a centralized system. Whilst foreign banks like Citibank had centralized systems, they lacked the branch strength to fully leverage them. It is worth remembering that in the mid-1990s, banking didn’t really exist in the form that we know of today. Customers could open bank accounts, but the whole gamut of products (home loan, car loan, etc.) and services (Internet banking) was just not available. Salaries would still be paid by cheque and employees would have to take time off from their jobs to go to the bank, write a deposit slip, hand it over to the teller and then wait for the cheque to get cleared. Also, the employer would have to take time off to sit and sign numerous salary cheques to be given to all the employees. Compare this to the instant, online credit of salary today and a notification by SMS and email at the end of every month! HDFC Bank’s centralized technology platform allowed it to kick-off a revolution in how employees were paid their salaries.

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.

Later still, LinkedIn created another interaction when it allowed thought leaders, and subsequently all users, to publish posts on LinkedIn for others to read, effectively turning the site into a publishing platform.

In recent years, more and more businesses are shifting from the pipeline structure to the platform structure. In this shift, the simple pipeline arrangement is transformed into a complex relationship in which producers, consumers, and the platform itself enter into a variable set of relationships.

And while platform businesses themselves are often extraordinarily profitable, the chief locus of wealth creation is now outside rather than inside the organization.

It was too embarrassing to admit that a young woman was the most popular politician in the Islamic Republic. In the official tally she came in second, with slightly fewer votes than the older cleric—an injustice that must have riled Hashemi, given the nature of her platform. Hashemi had made her debut in politics by challenging conservative clerics who opposed women’s right to exercise in public. Using her standing as Rafsanjani’s daughter, she argued that there was nothing wrong with fully covered women exercising. An increasing number of old and young women already crowded parks to jog or play volleyball or badminton. But the Basij often harassed and intimidated them to discourage women from exercising. As part of her campaign to defend and expand women’s right to exercise, Hashemi built a bike path for women, increased women’s access to sports facilities such as golf courses and tennis courts, and set up the first women’s soccer and, eventually, rugby teams since the revolution. She also founded the Islamic Women’s Sport Foundation, through which she held games in Tehran involving Iranian athletes and Muslim women invited from other countries.

If the technology platforms of the First and Second Industrial Revolutions aided in the severing and enclosing of the Earth’s myriad ecological interdependencies for market exchange and personal gain, the IoT platform of the Third Industrial Revolution reverses the process. What makes the IoT a disruptive technology in the way we organize economic life is that it helps humanity reintegrate itself into the complex choreography of the biosphere, and by doing so, dramatically increases productivity without compromising the ecological relationships that govern the planet. Using less of the Earth’s resources more efficiently and productively in a circular economy and making the transition from carbon-based fuels to renewable energies are defining features of the emerging economic paradigm. In the new era, we each become a node in the nervous system of the biosphere.

A revolution for the poor. To save us all … for a cold death on a train platform.

Because the bulk of a platform's value is created by its community of users, the platform business must shift its focus from internal activities to external activities. In the process the firm inverts-it turns inside out, with functions from marketing to information technology to operations to strategy all increasingly centering on people, resources, and functions that exist outside the business, complementing or replacing those that exists inside a traditional business.

Yet all are operating businesses that share the fundamental platform DNA—they all exist to create matches and facilitate interactions among producers and consumers, whatever the goods being exchanged may be.

Uber, the world’s largest taxi company, owns no vehicles. Facebook, the world’s most popular media owner, creates no content. Alibaba, the most valuable retailer, has no inventory. And Airbnb, the world’s largest accommodation provider, owns no real estate.

The industrial world of pipelines relies heavily on push. Consumers are accessed through specific marketing and communication channels that the business owns or pays for. In a world of scarcity, options were limited, and getting heard often sufficed to get marketers and their messages in front of consumers. In this environment, the traditional advertising and public relations industries focused almost solely on awareness creation—the classic technique for “pushing” a product or service into the consciousness of a potential customer. This model of marketing breaks down in the networked world, where access to marketing and communication channels is democratized—as illustrated, for example, by the viral global popularity of YouTube videos such as PSY’s “Gangnam Style” and Rebecca Black’s “Friday.” In this world of abundance—where both products and the messages about them are virtually unlimited—people are more distracted, as an endless array of competing options is only a click or a swipe away. Thus, creating awareness alone doesn’t drive adoption and usage, and pushing goods and services toward customers is no longer the key to success. Instead, those goods and services must be designed to be so attractive that they naturally pull customers into their orbit. Furthermore, for a platform business, user commitment and active usage, not sign-ups or acquisitions, are the true indicators of customer adoption. That’s why platforms must attract users by structuring incentives for participation—preferably incentives that are organically connected to the interactions made possible by the platform. Traditionally, the marketing function was divorced from the product. In network businesses, marketing needs to be baked into the platform.