The Business of Platforms

nnovation platforms usually create value by facilitating the development of new complementary products and services,

The unique feature of network effects is that the value one user experiences potentially increases as more people or organizations use the same product or service and as more complementary innovations appear.

Managers and entrepreneurs need to understand how product and platform strategies and business models differ and when to use each approach.

Rather, value with platforms can increase geometrically if each additional user can connect to all the other users or benefit from all the other innovative products and services already accessible to members of the network.

anagers and entrepreneurs in the digital age must learn to live in two worlds: the conventional economy and the platform economy.

o succeed long term, all firms must ultimately perform better than the competition, whether the rivals are digital platforms or conventional businesses

ow have a small number of companies come to exert such enormous influence over our personal, professional, and even political lives, as well as the world economy?

depended more on complementary innovations that determined what users could do with the product—such as the number and quality of software applications or digital services produced by many companies

Microsoft was thinking platforms. IBM and Apple were thinking products.