Coding Creativity 05: Platform Revolution with Geoff Parker

Geoff Parker is a professor of management science at Tulane University and the co-author of Platform Revolution.  He has extensively studied the operations management, the digital economy, and documents the rapid growth of new platform businesses in his book. We talked to Geoff about his co-creation of the theory of two-sided networks and how this explains the platform phenomenon.

Geoff Parker’s new book speaks to a lot of the things that we try to think through as we build out products. Get the book on Amazon or iTunes – we have made so many notes in our copies and we were thrilled to chat with Geoff about them all. Here are some notes from our discussion:

  • Geoff runs a website called platformeconomics.org which came about after years of thinking about software systems and services outside of the hours he spent teaching management in the classroom.
  • The research that he and his co-authors conducted came from the fascination with the strategies that support two-sided networks.
  • Internalizing the network effects across user groups laid the foundation for new platforms to take off.
  • The virtuous cycle is the idea that a system becomes more valuable as more people adopt it, so that the per-transaction value goes up.

According to Geoff:

When we say ‘platform’, [we are referring to] all of the contracting relationships and the financial flows, the standards for information transfer. All of that becomes reusable building blocks to facilitate different parties to both transact and potentially co-create together, using platform resources.

 

A positive network effect causes the system to be increasingly more valuable. This is what is driving the growth of platforms.

 

If you want to enjoy the positive network effects, you also have to invest in measuring them and detecting things that would turn against you. Invest in limiting bad behavior, even if it means kicking people off the platform.

 

How do you define a platform? It’s not really for you to define. Your customers will tell you when you’re a platform by redefining your technology.

 

 

 

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