What Platforms Do Differently than Traditional Businesses - 0 views
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Gary Edwards on 11 May 16"One of the oldest business models in the world is using new technology to trample traditional businesses, drive innovation, and create new and immense sources of value. Matchmakers, the subject of our new book, make it easy for two or more groups of customers, like drivers and riders in the case of Uber, to get together and do business. They operate platforms that make it easy and efficient for participants to connect and exchange value. Unlike traditional businesses, they don't buy inputs, make stuff, and sell it. Instead, they recruit participants, and then sell each group of participants access to the other group of participants. The "participants" are the "inputs" that they use to produce the intermediation service they provide. Today, we're living in the matchmaker economy. It is a bigger and more pervasive part of our lives than many imagine. Three of the five most highly valued companies in the world - Apple, Google, and Microsoft - make much of their profits from connecting different groups, like developers and users in the case of Apple. So do seven of the most valuable unicorns - startups worth more than $1 billion in their latest funding round - such as Uber, Airbnb, and Flipkart. And then many other companies that have IPO'd in the last decade, like Visa, which connects cardholders and merchants, and Facebook, which connects friends, advertisers, and developers. And it's not just these humongous companies. Westfield Malls operates shopping malls that help retailers and shoppers to get together. Then there are all the ad-supported media that troll for eyeballs so they can sell them to marketers. In fact, if you think about, as a consumer and a worker, you probably use multiple matchmakers throughout your day, from the operating system on your phone, to an exchange for trading stock, to a dating app for finding a mate. The firms that make up the gig economy and the sharing economy - the new darlings - are matchmakers t