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THE
PLATFORM
MANIFESTO
SANGEET PAUL
CHOUDARY
Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
Adapted from the Amazon bestseller, Platform Scale
The times they are a’changin’
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
used to work like
PIPES
Traditional business models
Source: PLATFORM THINKING
Value created upstream,

delivered downstream

PRODUCTION ASSEMBLY DISTRIBUTION
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
Emerging business
models work like
PLATFORMS
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
APPS
DEVELOPERS USERS
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
LISTINGS
HOSTS TRAVELERS
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
VIDEOS
VIDEO
CREATORS
VIDEO
VIEWERS
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
EBOOKS
WRITERS READERS
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
PRODUCERS CONSUMERS
VALUE
PLATFORM
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
“
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. Something interesting is happening.
- Techcrunch, March 2015
Pipe Scale (n):
Business scale powered by the ability to
coordinate internal labor and resources
toward efficient value creation and
toward delivery of the created value to
an aggregated consumer base.
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
Platform Scale (n):
Business scale powered by the ability to leverage and orchestrate a
global connected ecosystem of producers and consumers toward
efficient value creation and exchange. The management of platform
scale involves the design and optimization of value-exchange
interactions between producers and consumers.
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
Business principles change in a
world of platform scale
Source: PLATFORM THINKING
We need
a new mental map
to navigate a changing world
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
The manifesto explains the shift
in business principles while acknowledging that
value creation and delivery are still centered on a
business’s ability to aggregate.
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
1. The ecosystem is the new warehouse
2. The ecosystem is also the new supply chain
3. The network effect is the new driver for scale
4. Data is the new dollar
5. Community management is the new human 

resource management
6. Liquidity management is the new inventory control
7. Curation and repetition are the new quality control
8. User journeys are the new sales funnels
9. Distribution is the new destination 
10. Behavior design is the new loyalty program
11. Data science is the new business process optimization
12. Social feedback is the new sales commission 
13. Algorithms are the new decision makers
14. Real-time customization is the new market research
15. Plug-and-play is the new business development 
16. The invisible hand is the new iron fist 
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
THE
PLATFORM
MANIFESTO
Too busy to read all the slides?
Source: PLATFORM THINKING
Download the deck
Better still,
click here
to get the whole book
Source: PLATFORM THINKING
THE ECOSYSTEM IS
THE NEW WAREHOUSE
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
Pipe Scale :
Traditionally, businesses relied
on internal labor and owned
resources to scale value
creation
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
Platform Scale :
Leverage an external ecosystem of
users and partners connected to the
business over the Internet
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
Amazon
From warehouse to ecosystem
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
Started as a traditional online store
Moved to marketplace
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
Leverages warehouses distributed across
an ecosystem of partner merchants
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
FROM: Warehouse-powered store
Liquidate inventory
TO: Ecosystem-powered marketplace
Govern ecosystem interactions
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
COMPETING WITH HOTELS
using an ecosystem
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
Traditional media
differentiates on
ownership of content
Source: PLATFORM THINKING
YouTube and Soundcloud unlock an
ecosystem of content creators
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
Huffington Post started in-
house content
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
Eventually
scaling on
an ecosystem model
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
THE ECOSYSTEM IS
THE NEW WAREHOUSE
Ecosystems, not resources, 

determine competitive advantage
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
THE ECOSYSTEM
IS ALSO THE NEW
SUPPLY CHAIN
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
Scale is achieved through the
efficient organization of
ecosystems and processes
towards 

value creation
Pipe Scale :
Organize resources and labor
around internal and controlled
processes
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
Platform Scale :
Organize ecosystem resources and
labor through a centralized platform
coordinating actions
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
Traditional software creation
model follows linear supply
chain
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
Open-source software
organizes an ecosystem towards
creation and updation of software
Encyclopedia
Britannica
Pipe scale
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
Wikipedia
Ecosystem of contributors create and
manage a living encyclopedia
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
Viki
Ecosystem of enthusiasts
add subtitles to video content
Viki’s software
powers the subtitle creation,
editing, and confirmation process,
reminiscent
of the open-source tools
used by Wikipedia
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
Quirky briefly tried to move
manufacturing into the
ecosystem
Quirky briefly tried to move manufacturing into
the ecosystem
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
THE ECOSYSTEM
IS ALSO THE NEW
SUPPLY CHAIN
New coordination platforms enable a distributed
ecosystem to work together
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
THE NETWORK EFFECT
IS THE NEW DRIVER
FOR SCALE
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
Pipe Scale :
Businesses scale by scaling
internal resources and
optimizing operations
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
Platform Scale :
Businesses scale by scaling and
optimizing external interactions
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
Platform Scale
Businesses scale through
network effects
Feedback loops
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
Virtuous loop where
more production attracts
more consumption
and vice versa
THE NETWORK EFFECT
IS THE NEW DRIVER
FOR SCALE
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
Scale is achieved by
leveraging interactions in the ecosystem
Scale is achieved by
leveraging
interactions in the
ecosystem
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
DATA IS
THE NEW DOLLAR
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
Pipe Scale :
Today’s organizations are
optimized to absorb dollars
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
Pipe scale:
Sales professionals measured on
dollars absorbed
$
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
Platform Scale :
Tomorrow’s organizations should be
optimized to absorb data
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
Platform scale:
Measure monetizable data
absorbed, in addition to dollars
$
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
More data
absorbed lead to
more monetization
opportunities
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
Helped it create a larger potential job market
LinkedIn absorbs more data
from its users than Monster ever did
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
Toyota, GM, and Ford moving to data-
absorbing business models
Car-as-a-platform
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
Helps predict need
for after-sales service
Emerging cars stream
data about usage
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
Helps insurance
companies personalize
their premiums
Emerging cars stream
data about usage
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
DATA IS
THE NEW DOLLAR
Organizations must shift from
a culture of dollar absorption to
a culture of data absorption
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
Like what you’re
reading?
click here to enter the
book giveaway
Source: PLATFORM THINKING
COMMUNITY MANAGEMENT IS
THE
NEW HUMAN RESOURCES
MANAGEMENT
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
Community management isn’t
merely marketing 2.0
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
Pipe Scale :
Communities need to be
managed like audiences
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
Platform Scale :
Communities need to be managed like
distributed employees
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
Community management requires:
Structuring and managing incentives for
participants
1
Enabling the learning and development of
producers
2
Creating other support infrastructure that HR
would provide internally
3
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
Managing community incentives and
governance is as important as managing
internal employee conduct and
compliance
Source: PLATFORM THINKING
Josh Riedel
(Employee #1 at Instagram)
Engineer Designer Community 

Manager
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
Hotels invest heavily in training and managing
incentives for their staff
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
Platforms like Airbnb must invest
in community management and
development
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
For on-demand
labor platforms,
Community
Management
is the new HR
management
COMMUNITY MANAGEMENT IS
THE NEW HUMAN RESOURCES
MANAGEMENT
A community must be scaled in a platform
business, in much the same way that a workforce
of employees is scaled within an organization
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
LIQUIDITY MANAGEMENT IS
THE NEW INVENTORY
CONTROL
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
Pipe Scale :
Idle supply and unfulfilled
demand are undesirable
scenarios
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
Platform Scale :
Interaction failure is
an undesirable scenario
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
Producers create value but
do not see relevant demand
Interaction Failure
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
Consumers are not matched with
relevant supply
Interaction Failure
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
Matching supply and demand efficiently is the
only way that a platform
can hold the two sides together
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
Liquidity
Demand is reliably served with
supply
Supply is liquidated with demand
efficiently
Source: PLATFORM THINKING
Facebook created a social network within
closed college campuses
High Liquidity
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
High overlap of users who already knew
each other within a campus
High Liquidity
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
Liquidity
Enhancing
Techniques
Uber’s surge pricing
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
LIQUIDITY MANAGEMENT IS
THE NEW INVENTORY
CONTROL
Ensure enough overlap between supply and demand to
guarantee fulfilled demand or liquidated supply
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
CURATION AND REPUTATION
ARE THE
NEW QUALITY CONTROL
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
Pipe Scale :
Control quality through
hierarchies, gatekeepers, and
contracts
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
Platform Scale :
Control quality through curation and
reputation management
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
The Platform Challenge:
Controlling quality in an open and
participative environment
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
The Platform Challenge:
Controlling quality
with minimum friction
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
The Platform Challenge:
Controlling quality through processes
that scale non-linearly
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
Platform Curation Mechanisms
Initial screening of producers to ensure a
minimum quality threshold
Uber, Sittercity
Determine producers (‘or consumers’) reputation
through social signals
Airbnb ratings Amazon ratingsYelp ratings
Determine quality of
production
Voting on Quora
Voting on YouTube
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
Quality = (Editorial moderation, Algorithmic
judgment, Social signals)
Source: PLATFORM THINKING
CURATION AND REPUTATION
ARE THE
NEW QUALITY CONTROL
Balance open participation with curation
and reputation management
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
USER JOURNEYS ARE THE NEW
SALES FUNNELS
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
Pipe Scale :
Lead customers
through sales funnels.
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
Pipe scale:
AARRR framework
AARRR!
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
Platform Scale :
Nudge users along journeys
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
The new, new retail
From tracking in-store footfalls
To measuring engagement across
multiple touch points
In a world of multi-device,
multi-channel journeys, the browse
and buy experiences are decoupled
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
A data platform serves as an integration layer
that connects multiple touch points with the
user
Unify view of the user
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
Data-enabled connectivity binds users’ immediate
experience with their overall journey with the
business.
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
USER JOURNEYS ARE THE NEW
SALES FUNNELS
In a networked world,
purchase paths are no longer linear
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
DISTRIBUTION IS
THE NEW DESTINATION
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
Pipe Scale :
Define destinations for
consumers to meet your
business
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
Platform Scale :
Meet consumers by distributing your
business across their journey
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
Retail outlets
enabled pipe scale
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
Mass media
enabled pipe scale
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
Always-on connectivity
enables platform scale
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
Multi-point connectivity,
Sometimes simultaneously
Rise of the second screen
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
DISTRIBUTION IS
THE NEW DESTINATION
Identify new ways to distribute
your experience into the context of the user
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
BEHAVIOR DESIGN IS THE NEW
LOYALTY PROGRAM
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
Pipe Scale :
Achieve customer retention
and stickiness through loyalty
programs and lock-ins
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
Platform Scale :
Invest in behavior design to create
lasting customer relationships
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
In a world of pipes, predatory lock-ins lured
customers into long-term relationships
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
In a world of platforms, creating
habits ensures users stick around of
their own accord
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
Show me what’s new from my network
Facebook’s news feed
creates a daily habit:
Show me the latest deals
Groupon turns
marketplaces
into daily habits:
To create new behaviors, reward desirable actions
and discourage undesirable ones
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
Airbnb creates
a desirable new
behavior through
community and
data-driven governance
Source: PLATFORM THINKING
Along with behavior design,
network effects also create stickiness
Both sides constantly attract each other back to the platform
Source: PLATFORM THINKING
BEHAVIOR DESIGN IS THE NEW
LOYALTY PROGRAM
Achieving lock-in in an opt-in world
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
DATA SCIENCE IS
THE NEW BUSINESS PROCESS
OPTIMIZATION
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
Pipe Scale :
Improve the repeatability and
efficiency of internal processes
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
Platform Scale :
Improve the repeatability and
efficiency of ecosystem interactions
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
Pipe scale:
Scale through process re-engineering and
optimization
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
Platform scale:
Scale interaction efficiency through
data science
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
Process engineers and managers helped improve
internal processes and make them more efficient
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
As value creation moves to ecosystem
interactions, the focus of efficiency shifts to
orchestrating efficient interactions in the
ecosystem.
DATA SCIENCE IS
THE NEW BUSINESS PROCESS
OPTIMIZATION
Data science improves the platform’s ability to
orchestrate interactions in the ecosystem
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
SOCIAL FEEDBACK IS THE NEW
SALES COMMISSION
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
Pipe Scale :
Design inorganic incentives like
sales commissions to encourage
employees toward specific actions
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
Platform Scale :
Design social feedback to encourage
producers on a platform
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
Readers share Buzzfeed and Upworthy articles
because of the social feedback that results from
such an action.
Instagram
users share their creations
for
social feedback
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
Threadless
designers work for social
feedback and monetary
rewards.
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
SOCIAL FEEDBACK IS THE NEW
SALES COMMISSION
Understanding currency of interactions
is critical to success in a world of platforms
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
ALGORITHMS ARE THE
NEW DECISION-MAKERS
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
Pipe Scale :
Managers and editors perform
gatekeeping and resource
allocation roles
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
Platform Scale :
Algorithms leverage employee and
ecosystem inputs to perform
gatekeeping and resource allocation
roles
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
Algorithms are increasingly taking over
managerial functions of resource allocation
and decision-making
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
On platforms, algorithms are the arbiters
of both resource allocation and
reputation assignment
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
Uber’s algorithms
dispatch vehicles to
travelers while
maintaining a
driver/passenger
rating system
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
A traditional taxi service would have leveraged
a layer of middle managers to perform a similar function
Source: PLATFORM THINKING
Algorithms
also replace
traditional
gatekeepers
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
Publishing:
From editors
to algorithms
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
Funding:
From gatekeepers
to communities
ALGORITHMS ARE THE
NEW DECISION-MAKERS
Self-policing communities and the
algorithms that nudge them along
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
REAL-TIME CUSTOMIZATION IS
THE NEW MARKET RESEARCH
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
Pipe Scale :
Relies on slow market research
and segmentation
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
Platform Scale :
Relies on real-time customization to
serve the most relevant content from
producers to interested consumers
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
The Facebook newsfeed
A highly customized gossip column
that rearranges itself in real time
based on user preferences and
actions
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
However,
Beware the
Filter Bubble!
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
Platforms must ensure that they balance
relevance with serendipity
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
REAL-TIME CUSTOMIZATION IS
THE NEW MARKET RESEARCH
Platforms rely on real-time customization
to serve the most relevant content from
producers to interested consumers
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
PLUG AND PLAY
IS THE NEW BUSINESS
DEVELOPMENT
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
Pipe Scale :
Business development based on
contractual integration
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
Platform Scale :
APIs enable plug-and-play business
development
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
The API is the contract and
the integration interface
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
Prioritize acquisition targets based on
how well they are integrated with your
existing API
Pipe scale:
Nokia, BlackBerry, and traditional carriers
sourced their apps contractually
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
Platform scale:
The iPhone’s app store introduced business
development on steroids
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
PLUG AND PLAY
IS THE NEW BUSINESS
DEVELOPMENT
Because APIs are changing the world
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
THE INVISIBLE HAND
IS THE NEW IRON FIST
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
Pipe Scale :
Relies on hierarchical control
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
Platform Scale :
Relies on opt-in, behavior
design and gradual nudges
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
Hierarchies are based on
rules and compliance
A unidirectional flow of
information from the top down
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
This iron fist
is giving way to
the invisible hand
The invisible hand – typically taking the form of
algorithmic decisions – nudges producers to continue
creating value on the platform
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
THE INVISIBLE HAND
IS THE NEW IRON FIST
We are moving from a world of command
and control to a self-serve world where user participation is
encouraged through the invisible hand of data, algorithms and
APIs
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
1. The ecosystem is the new warehouse
2. The ecosystem is also the new supply chain
3. The network effect is the new driver for scale
4. Data is the new dollar
5. Community management is the new human 

resource management
6. Liquidity management is the new inventory control
7. Curation and repetition are the new quality control
8. User journeys are the new sales funnels
9. Distribution is the new destination 
10. Behavior design is the new loyalty program
11. Data science is the new business process optimization
12. Social feedback is the new sales commission 
13. Algorithms are the new decision makers
14. Real-time customization is the new market research
15. Plug-and-play is the new business development 
16. The invisible hand is the new iron fist 
Source: PLATFORM THINKING
Copyright © 2015
Sangeet Paul Choudary,
Geoffrey Parker and
Marshall Van Alstyne
THE
PLATFORM
MANIFESTO
PLATFORM SCALE IMPERATIVE
The management of platforms must be designed around the
goal of enabling interactions between producers and
consumers in a platform’s ecosystem
Source: PLATFORM THINKING
And now,
click here
to get the whole book
Source: PLATFORM THINKING
THE PLATFORM
MANIFESTO
Thank You

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The Platform Manifesto - 16 principles for digital transformation

  • 1. THE PLATFORM MANIFESTO SANGEET PAUL CHOUDARY Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne Adapted from the Amazon bestseller, Platform Scale
  • 2. The times they are a’changin’ Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 3. used to work like PIPES Traditional business models Source: PLATFORM THINKING
  • 4. Value created upstream,
 delivered downstream
 PRODUCTION ASSEMBLY DISTRIBUTION Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 5. Emerging business models work like PLATFORMS Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 6. APPS DEVELOPERS USERS Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 7. LISTINGS HOSTS TRAVELERS Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 8. VIDEOS VIDEO CREATORS VIDEO VIEWERS Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 9. EBOOKS WRITERS READERS Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 10. PRODUCERS CONSUMERS VALUE PLATFORM Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 11. “ 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. Something interesting is happening. - Techcrunch, March 2015
  • 12. Pipe Scale (n): Business scale powered by the ability to coordinate internal labor and resources toward efficient value creation and toward delivery of the created value to an aggregated consumer base. Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 13. Platform Scale (n): Business scale powered by the ability to leverage and orchestrate a global connected ecosystem of producers and consumers toward efficient value creation and exchange. The management of platform scale involves the design and optimization of value-exchange interactions between producers and consumers. Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 14. Business principles change in a world of platform scale Source: PLATFORM THINKING
  • 15. We need a new mental map to navigate a changing world Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 16. The manifesto explains the shift in business principles while acknowledging that value creation and delivery are still centered on a business’s ability to aggregate. Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 17. 1. The ecosystem is the new warehouse 2. The ecosystem is also the new supply chain 3. The network effect is the new driver for scale 4. Data is the new dollar 5. Community management is the new human 
 resource management 6. Liquidity management is the new inventory control 7. Curation and repetition are the new quality control 8. User journeys are the new sales funnels 9. Distribution is the new destination  10. Behavior design is the new loyalty program 11. Data science is the new business process optimization 12. Social feedback is the new sales commission  13. Algorithms are the new decision makers 14. Real-time customization is the new market research 15. Plug-and-play is the new business development  16. The invisible hand is the new iron fist  Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne THE PLATFORM MANIFESTO
  • 18. Too busy to read all the slides? Source: PLATFORM THINKING Download the deck
  • 19. Better still, click here to get the whole book Source: PLATFORM THINKING
  • 20. THE ECOSYSTEM IS THE NEW WAREHOUSE Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 21. Pipe Scale : Traditionally, businesses relied on internal labor and owned resources to scale value creation Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 22. Platform Scale : Leverage an external ecosystem of users and partners connected to the business over the Internet Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 23. Amazon From warehouse to ecosystem Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 24. Started as a traditional online store Moved to marketplace Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 25. Leverages warehouses distributed across an ecosystem of partner merchants Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 26. FROM: Warehouse-powered store Liquidate inventory TO: Ecosystem-powered marketplace Govern ecosystem interactions Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 27. COMPETING WITH HOTELS using an ecosystem Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 28. Traditional media differentiates on ownership of content Source: PLATFORM THINKING
  • 29. YouTube and Soundcloud unlock an ecosystem of content creators Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 30. Huffington Post started in- house content Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 31. Eventually scaling on an ecosystem model Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 32. THE ECOSYSTEM IS THE NEW WAREHOUSE Ecosystems, not resources, 
 determine competitive advantage Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 33. THE ECOSYSTEM IS ALSO THE NEW SUPPLY CHAIN Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 34. Scale is achieved through the efficient organization of ecosystems and processes towards 
 value creation
  • 35. Pipe Scale : Organize resources and labor around internal and controlled processes Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 36. Platform Scale : Organize ecosystem resources and labor through a centralized platform coordinating actions Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 37. Traditional software creation model follows linear supply chain Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 38. Open-source software organizes an ecosystem towards creation and updation of software
  • 39. Encyclopedia Britannica Pipe scale Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 40. Wikipedia Ecosystem of contributors create and manage a living encyclopedia Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 41. Viki Ecosystem of enthusiasts add subtitles to video content
  • 42. Viki’s software powers the subtitle creation, editing, and confirmation process, reminiscent of the open-source tools used by Wikipedia Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 43. Quirky briefly tried to move manufacturing into the ecosystem Quirky briefly tried to move manufacturing into the ecosystem Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 44. THE ECOSYSTEM IS ALSO THE NEW SUPPLY CHAIN New coordination platforms enable a distributed ecosystem to work together Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 45. THE NETWORK EFFECT IS THE NEW DRIVER FOR SCALE Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 46. Pipe Scale : Businesses scale by scaling internal resources and optimizing operations Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 47. Platform Scale : Businesses scale by scaling and optimizing external interactions Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 48. Platform Scale Businesses scale through network effects
  • 49. Feedback loops Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne Virtuous loop where more production attracts more consumption and vice versa
  • 50. THE NETWORK EFFECT IS THE NEW DRIVER FOR SCALE Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne Scale is achieved by leveraging interactions in the ecosystem
  • 51. Scale is achieved by leveraging interactions in the ecosystem Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 52. DATA IS THE NEW DOLLAR Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 53. Pipe Scale : Today’s organizations are optimized to absorb dollars Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 54. Pipe scale: Sales professionals measured on dollars absorbed $ Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 55. Platform Scale : Tomorrow’s organizations should be optimized to absorb data Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 56. Platform scale: Measure monetizable data absorbed, in addition to dollars $ Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 57. More data absorbed lead to more monetization opportunities Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 58. Helped it create a larger potential job market LinkedIn absorbs more data from its users than Monster ever did Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 59. Toyota, GM, and Ford moving to data- absorbing business models Car-as-a-platform Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 60. Helps predict need for after-sales service Emerging cars stream data about usage Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 61. Helps insurance companies personalize their premiums Emerging cars stream data about usage Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 62. DATA IS THE NEW DOLLAR Organizations must shift from a culture of dollar absorption to a culture of data absorption Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 63. Like what you’re reading? click here to enter the book giveaway Source: PLATFORM THINKING
  • 64. COMMUNITY MANAGEMENT IS THE NEW HUMAN RESOURCES MANAGEMENT Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 65. Community management isn’t merely marketing 2.0 Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 66. Pipe Scale : Communities need to be managed like audiences Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 67. Platform Scale : Communities need to be managed like distributed employees Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 68. Community management requires: Structuring and managing incentives for participants 1 Enabling the learning and development of producers 2 Creating other support infrastructure that HR would provide internally 3 Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 69. Managing community incentives and governance is as important as managing internal employee conduct and compliance Source: PLATFORM THINKING
  • 70. Josh Riedel (Employee #1 at Instagram) Engineer Designer Community 
 Manager Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 71. Hotels invest heavily in training and managing incentives for their staff Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 72. Platforms like Airbnb must invest in community management and development Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 74. COMMUNITY MANAGEMENT IS THE NEW HUMAN RESOURCES MANAGEMENT A community must be scaled in a platform business, in much the same way that a workforce of employees is scaled within an organization Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 75. LIQUIDITY MANAGEMENT IS THE NEW INVENTORY CONTROL Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 76. Pipe Scale : Idle supply and unfulfilled demand are undesirable scenarios Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 77. Platform Scale : Interaction failure is an undesirable scenario Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 78. Producers create value but do not see relevant demand Interaction Failure Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 79. Consumers are not matched with relevant supply Interaction Failure Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 80. Matching supply and demand efficiently is the only way that a platform can hold the two sides together Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 81. Liquidity Demand is reliably served with supply Supply is liquidated with demand efficiently Source: PLATFORM THINKING
  • 82. Facebook created a social network within closed college campuses High Liquidity Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 83. High overlap of users who already knew each other within a campus High Liquidity Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 84. Liquidity Enhancing Techniques Uber’s surge pricing Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 85. LIQUIDITY MANAGEMENT IS THE NEW INVENTORY CONTROL Ensure enough overlap between supply and demand to guarantee fulfilled demand or liquidated supply Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 86. CURATION AND REPUTATION ARE THE NEW QUALITY CONTROL Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 87. Pipe Scale : Control quality through hierarchies, gatekeepers, and contracts Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 88. Platform Scale : Control quality through curation and reputation management Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 89. The Platform Challenge: Controlling quality in an open and participative environment Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 90. The Platform Challenge: Controlling quality with minimum friction Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 91. The Platform Challenge: Controlling quality through processes that scale non-linearly Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 92. Platform Curation Mechanisms Initial screening of producers to ensure a minimum quality threshold Uber, Sittercity
  • 93. Determine producers (‘or consumers’) reputation through social signals Airbnb ratings Amazon ratingsYelp ratings
  • 94. Determine quality of production Voting on Quora Voting on YouTube Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 95. Quality = (Editorial moderation, Algorithmic judgment, Social signals) Source: PLATFORM THINKING
  • 96. CURATION AND REPUTATION ARE THE NEW QUALITY CONTROL Balance open participation with curation and reputation management Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 97. USER JOURNEYS ARE THE NEW SALES FUNNELS Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 98. Pipe Scale : Lead customers through sales funnels. Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 99. Pipe scale: AARRR framework AARRR! Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 100. Platform Scale : Nudge users along journeys Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 101. The new, new retail From tracking in-store footfalls To measuring engagement across multiple touch points
  • 102. In a world of multi-device, multi-channel journeys, the browse and buy experiences are decoupled Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 103. A data platform serves as an integration layer that connects multiple touch points with the user Unify view of the user Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 104. Data-enabled connectivity binds users’ immediate experience with their overall journey with the business. Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 105. USER JOURNEYS ARE THE NEW SALES FUNNELS In a networked world, purchase paths are no longer linear Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 106. DISTRIBUTION IS THE NEW DESTINATION Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 107. Pipe Scale : Define destinations for consumers to meet your business Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 108. Platform Scale : Meet consumers by distributing your business across their journey Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 109. Retail outlets enabled pipe scale Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 110. Mass media enabled pipe scale Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 111. Always-on connectivity enables platform scale Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 112. Multi-point connectivity, Sometimes simultaneously Rise of the second screen Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 113. DISTRIBUTION IS THE NEW DESTINATION Identify new ways to distribute your experience into the context of the user Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 114. BEHAVIOR DESIGN IS THE NEW LOYALTY PROGRAM Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 115. Pipe Scale : Achieve customer retention and stickiness through loyalty programs and lock-ins Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 116. Platform Scale : Invest in behavior design to create lasting customer relationships Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 117. In a world of pipes, predatory lock-ins lured customers into long-term relationships Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 118. In a world of platforms, creating habits ensures users stick around of their own accord Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 119. Show me what’s new from my network Facebook’s news feed creates a daily habit:
  • 120. Show me the latest deals Groupon turns marketplaces into daily habits:
  • 121. To create new behaviors, reward desirable actions and discourage undesirable ones Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 122. Airbnb creates a desirable new behavior through community and data-driven governance Source: PLATFORM THINKING
  • 123. Along with behavior design, network effects also create stickiness Both sides constantly attract each other back to the platform Source: PLATFORM THINKING
  • 124. BEHAVIOR DESIGN IS THE NEW LOYALTY PROGRAM Achieving lock-in in an opt-in world Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 125. DATA SCIENCE IS THE NEW BUSINESS PROCESS OPTIMIZATION Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 126. Pipe Scale : Improve the repeatability and efficiency of internal processes Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 127. Platform Scale : Improve the repeatability and efficiency of ecosystem interactions Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 128. Pipe scale: Scale through process re-engineering and optimization Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 129. Platform scale: Scale interaction efficiency through data science Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 130. Process engineers and managers helped improve internal processes and make them more efficient Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 131. As value creation moves to ecosystem interactions, the focus of efficiency shifts to orchestrating efficient interactions in the ecosystem.
  • 132. DATA SCIENCE IS THE NEW BUSINESS PROCESS OPTIMIZATION Data science improves the platform’s ability to orchestrate interactions in the ecosystem Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 133. SOCIAL FEEDBACK IS THE NEW SALES COMMISSION Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 134. Pipe Scale : Design inorganic incentives like sales commissions to encourage employees toward specific actions Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 135. Platform Scale : Design social feedback to encourage producers on a platform Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 136. Readers share Buzzfeed and Upworthy articles because of the social feedback that results from such an action.
  • 137. Instagram users share their creations for social feedback Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 138. Threadless designers work for social feedback and monetary rewards. Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 139. SOCIAL FEEDBACK IS THE NEW SALES COMMISSION Understanding currency of interactions is critical to success in a world of platforms Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 140. ALGORITHMS ARE THE NEW DECISION-MAKERS Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 141. Pipe Scale : Managers and editors perform gatekeeping and resource allocation roles Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 142. Platform Scale : Algorithms leverage employee and ecosystem inputs to perform gatekeeping and resource allocation roles Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 143. Algorithms are increasingly taking over managerial functions of resource allocation and decision-making Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 144. On platforms, algorithms are the arbiters of both resource allocation and reputation assignment Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 145. Uber’s algorithms dispatch vehicles to travelers while maintaining a driver/passenger rating system Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 146. A traditional taxi service would have leveraged a layer of middle managers to perform a similar function Source: PLATFORM THINKING
  • 147. Algorithms also replace traditional gatekeepers Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 148. Publishing: From editors to algorithms Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 150. ALGORITHMS ARE THE NEW DECISION-MAKERS Self-policing communities and the algorithms that nudge them along Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 151. REAL-TIME CUSTOMIZATION IS THE NEW MARKET RESEARCH Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 152. Pipe Scale : Relies on slow market research and segmentation Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 153. Platform Scale : Relies on real-time customization to serve the most relevant content from producers to interested consumers Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 154. The Facebook newsfeed A highly customized gossip column that rearranges itself in real time based on user preferences and actions Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 155. However, Beware the Filter Bubble! Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 156. Platforms must ensure that they balance relevance with serendipity Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 157. REAL-TIME CUSTOMIZATION IS THE NEW MARKET RESEARCH Platforms rely on real-time customization to serve the most relevant content from producers to interested consumers Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 158. PLUG AND PLAY IS THE NEW BUSINESS DEVELOPMENT Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 159. Pipe Scale : Business development based on contractual integration Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 160. Platform Scale : APIs enable plug-and-play business development Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 161. The API is the contract and the integration interface Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 162. Prioritize acquisition targets based on how well they are integrated with your existing API
  • 163. Pipe scale: Nokia, BlackBerry, and traditional carriers sourced their apps contractually Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 164. Platform scale: The iPhone’s app store introduced business development on steroids Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 165. PLUG AND PLAY IS THE NEW BUSINESS DEVELOPMENT Because APIs are changing the world Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 166. THE INVISIBLE HAND IS THE NEW IRON FIST Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 167. Pipe Scale : Relies on hierarchical control Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 168. Platform Scale : Relies on opt-in, behavior design and gradual nudges Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 169. Hierarchies are based on rules and compliance A unidirectional flow of information from the top down Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 170. This iron fist is giving way to the invisible hand
  • 171. The invisible hand – typically taking the form of algorithmic decisions – nudges producers to continue creating value on the platform Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 172. THE INVISIBLE HAND IS THE NEW IRON FIST We are moving from a world of command and control to a self-serve world where user participation is encouraged through the invisible hand of data, algorithms and APIs Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne
  • 173. 1. The ecosystem is the new warehouse 2. The ecosystem is also the new supply chain 3. The network effect is the new driver for scale 4. Data is the new dollar 5. Community management is the new human 
 resource management 6. Liquidity management is the new inventory control 7. Curation and repetition are the new quality control 8. User journeys are the new sales funnels 9. Distribution is the new destination  10. Behavior design is the new loyalty program 11. Data science is the new business process optimization 12. Social feedback is the new sales commission  13. Algorithms are the new decision makers 14. Real-time customization is the new market research 15. Plug-and-play is the new business development  16. The invisible hand is the new iron fist  Source: PLATFORM THINKING Copyright © 2015 Sangeet Paul Choudary, Geoffrey Parker and Marshall Van Alstyne THE PLATFORM MANIFESTO
  • 174. PLATFORM SCALE IMPERATIVE The management of platforms must be designed around the goal of enabling interactions between producers and consumers in a platform’s ecosystem Source: PLATFORM THINKING
  • 175. And now, click here to get the whole book Source: PLATFORM THINKING