Platforms
products and services that allow for the development of integrated software/products that provide complementary value. ex. download gmail on iphone
If can own and control platfroms, is _____ profitable
extrememly
Metcalf’s Law
value = users^2
3 primary sources of value
exchange, staying power, complementary benefits
Exchange:
must be benefit to exchange (can enable transactions ex. EBay/transact; anything that can be digitized; one of primary sources of value
Staying power:
how confident we are __ will be viable long-term; one of primary sources of value
- increasing with switching costs –> both can drive us to tolerate higher total cost of ownership
Complementary benefits:
products/services that add extra value; one of primary sources of value
- ex. apple ecosystem
One-sided markets
users/participants of the same class
Two-sided markets
two distinct classes of participants
- cross side exchange benefits
- more value for one side as the other side gets more participants
- sometimes is either/or but not always (ex. blue text bubble on Apple imessage)
Networks ____ winner take all/winnder take most
encourage
– most of the time don’t have more than one dominant standard
For platforms to dominate
move early, subsidize adoption, viral promotion
Subsidize adoption
- cash (ex. paypal)
- freemium (pay more for a complete version but free otherwise) (ex. Zoom)
- PS3 (core piece sold at cost or below)
Viral promotion
social proof
Social proof
human tendency that people will be influenced by what other people are doing
Expand –> either _____ or _____
envelopment or conversion
Envelopment:
capture other smaller markets and make part of your larger market; part of expand option
Conversion:
ex. cell, mp3, gps all put itno the iphone; part of expand option
Expand or _____
Redefined
Take advantage of distribution channels
ex. Apple music built into ios —> but can have antitrust issues
Seed complementors
ex. Sony started buying Movie/TV studios to prepare for BlueRay
Encourage complementary goods
ex. Apple giving lessons in Swift
Backward compatibility
If rival, make yourself compatible
If incumbent, keep innovating but avoid Osboine effect
