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Platform business model

Anh Thi Nguyen
December 07, 2020

Platform business model

Anh Thi Nguyen

December 07, 2020
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  1. Platform business model Presenter: Thi Nguyen Dang Anh How big

    companies has elevated the platform business model to dominate the world economy?
  2. The story of mobile phones In 2007, the world was

    dominated by these phone brands Nokia Motorola Sony Ericson Sam Sung
  3. Platform business model A user in a platform can play

    both roles: producer and consumer.
  4. How users know if a product/service is good or not?

    Ratings define the quality of a good or a service
  5. 3. Have matchmaking mechanisms to connect the right producers to

    the right consumer Characteristics of a Platform Uber matching Youtube recommendation
  6. 4. Govern the platform by rules and standards Characteristics of

    a Platform Grab ride prices Youtube community rules and policies
  7. Characteristics of a Platform Summary Eliminate ineffcient and slow gatekeepers

    Reduce the need to own physical infrastructure and assets Have matchmaking mechanisms to connect the right producers to the right consumer Govern the platform by rules and standards
  8. Platform network effects 1. Direct network effect(same side effect) More

    users lead to more users, the more valuable the network is Example: Social network platform - Facebook, instagram, Snapchat
  9. Platform network effects 2. Indirect network effect(cross-side effect) The more

    consumers on the network, the more valuable that network is to producers, and vice versa. Ex: Uber case study
  10. • Facebook, Twitter: spammy, offensive, rude comments and posts by

    users • YouTube: Offensive, discriminating, sexual videos • Google: pages optimised for search engines but providing only low-quality content to humans • LinkedIn: Fake profiles, references • AppStores: low-quality apps, bloatware, malware Negative network effects
  11. • Maximize the number of positive effects • Minimize the

    number of negative effects A Platform should:
  12. Design: The core interaction The core interaction is the single

    most important form of activity that takes place on a platform
  13. 1. Participants: Producer, Consumer 2. Value units: created by the

    producers • Videos on Youtube, tweets on Twitter • Profiles on LinkedIn, available cars on Uber 3. Filter: is an algorithmic, software-based tool help consumers receive value units that are relevant and valuable to them • Uber matching algorithm • Youtube recommendation algorithm The core interaction
  14. Solutions Seeding and weeding • Dating apps create fake profiles,

    fake interactions to attract users Seeding fake demand • PayPal converted a base of eBay sellers, into PayPal users, by faking buyer-side demand for the service Subsiding • Uber paid drivers even when they weren’t transporting customers • Customers get free rides or subsided rides
  15. 1. Maximize the overall value of the whole network by

    constantly improve feedback loops. 2. Launch small • Facebook first launched with a narrow focus connecting students within Harvard and then ultimately to everyone. 3. Focus on critical mass and quality ahead of money • It tooks Amazon 10 years to become profitable 4. Create real value and share it fairly with all participants How to govern platforms successfully?
  16. • A platform is a business model that uses technology

    to facilitate exchanges, interactions between producers and consumers. • A platform use network efffects to pull more users and keep users stay with a feed back loop. Summary