Episode 105: David Yoffie
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Business of Platforms: Strategy in the Age of Digital Competition, Innovation and Power
David Yoffie has been a professor at Harvard Business School for 40 years where he has authored hundreds of cases, and a number of books, the most recent being “The Business of Platforms: Strategy in the Age of Digital Competition, Innovation and Power.”
He has been writing about technology and digital for a long time, and has served on the boards of numerous companies that are at the heart of this digital explosion over the last couple of decades.
But it's only recently that we have formulated an understanding of what we now call platforms. So what is it about platforms that make them unique?
Listen as David and Greg discuss network effects and strategy, the distinction between a transaction platform and an innovation platform, and the age old question: can you teach an old dog new tricks?
Episode Quotes:
How the internet changed platforms:
“The internet enabled a much broader range of activity to take place where you could connect two sides of a market together. And it accelerated the opportunities to drive revenue. It accelerated the opportunity to build network effects. And so it led to an explosion of platforms that wouldn't have been possible in the absence of something like the internet.”
On Markets:
“The single biggest problem for any platform is which side of the market is the profit making side, and which side is the loss-making side, and how do you make that equation work? And it seems like it should be obvious, but it turns out to be incredibly difficult.”
Intermediating & circumventing apps:
“It's a constant problem. Again, what does the platform do? It connects two independent parties. Well, now the question is why do I need the platform in the middle once I've been connected?”
Should platforms be curating?:
“If you are a forward-thinking platform today, with significant market presence and market power, you should be curating, you should be making the investment to clean your platform. And if you don't, the consequences are much more likely to be detrimental to the long-term health of your business.”
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