Wednesday, December 14, 2016


A platform is a system that enables other systems: A machine provides a platform for software; the software provides a platform for other software; that software might provide a platform for yet more software; and so on. The iPhone platform lets outside parties build and market apps like Uber; the Uber platform lets outside parties sign up to drive other Uber users for money. (...)

Somewhere between media and social media — between familiar ideas about politics and the news and the ones that underpin the world we live in today — platforms changed from responsibilities into abdications of responsibility. Claiming to provide a platform, in Silicon Valley, doesn’t demand defense. It is the defense. Platforms don’t cause problems; people do.

The closest thing the new world of platforms has to a foundational text is a business book called “Invisible Engines,” published in 2006, which examined and tried to define a nascent form of business: one that doesn’t just sell a good or service, but instead creates value by spawning entire ecosystems and economies. Nintendo and Sega, for example, allowed game developers to create and sell games that ran on their machines; smartphones let software companies connect with customers through app stores; eBay connects merchants and sellers, creating transactions but selling nothing itself. The book makes the prescient case that platforms will come to redefine our economy.

“The platform’s value is not necessarily what it does,” says Andrei Hagiu, a visiting associate professor at M.I.T. and one of the book’s authors, “but what it enables.” And what it enables can be enormous. It would be difficult to overstate the zeal that exists for platform companies in Silicon Valley. They represent staggering opportunities, the chance to create or remake entire industries and to preside over them indefinitely, with maximum control and minimum participation or liability. Airbnb has created a marketplace that overlaps substantially with the hotel business, but the properties it rents to users are owned by other users. (The company recently filed a federal lawsuit challenging a New York law that could result in fines against Airbnb for illegally listed properties; it agreed to drop the suit on the condition that fines be levied only against people listing property, not the company itself.) Uber created a sort of marketplace for transportation but doesn’t own its vehicles nor — it claims, over and over, in courts all across the globe — does it employ its drivers.

But the platform economies that are most developed and that have captured the most people — the ones that transact on attention, advertising and communication — are not immediately recognizable to their users as marketplaces. Facebook is not primarily understood among its billion and a half users as an attention brokerage, but that’s exactly what it is: a middleman between users and other users; between advertisers and users; between developers and users; between publishers and advertisers and their viewers and readers.

Participants successfully contribute to the broader marketplace by inducing other participants to engage more; beyond shares and followers, success is rewarded off-platform, with the conversion of attention into relationships, into advertising on websites, into sales or into influence and political power. Social platforms are the most extreme and advanced expression of what may be the defining corporate strategy of our time.

by John Herrman, NY Times |  Read more:
Image: Javier JaƩn