Coming from the computing industry, I tend to favor definitions of "platform" that center on a technical interface that standardizes the interactions between modules on either side of that interface, with a platform being a curated collection of said interfaces that makes it easier for those on opposing sides of said interfaces to accomplish a given purpose. Most importantly, the interface enables modules on opposing sides of the interface to innovate independently, thus accelerating the overall rate of innovation of the platform's ecosystem. A great example is Microsoft's Direct3D API, which enabled 3D Graphics Processing Units (GPUs) to innovate independently of game software. This created the first profitable, large-scale niche for GPUs, which led directly to their being used in today's most valuable GPU application: AI.
The Picatinny Rail is a particularly informative example, as it enabled guns (notably the AR-15) to transition from product to platform, which has made the military's guns much more flexible but which has also complicated the heck out of civilian gun control legislation.
I have been unable find any academic papers in the platform-related literature that study ANY of these non-computing platforms. This is, IMHO, a serious oversight! These examples demonstrate that novel physical interface standards can unlock enormous value, just as digital interfaces can do -- value that could be unlocked in *many* other physical industries, if only the theory and practice that is now known wrt computing platforms were applied to non-computing platforms.
I encourage you to aim a grad student at this research question. 🙂
Hello Andrei and Julian. I have a query. You categorized Xbox and Playstation consoles as platforms. They enable users to play games produced by third-party developers for those consoles. However, both the consoles do not allow the third-party developers to interact with the end users directly, which is a core characteristic of a platform. Both Sony and Microsoft do not allow that direct interaction. Pls educate me how Xbox and Playstation consoles are platforms.
Developers sell their games to end-users "directly" via the console app stores (or via retail stores). That means they control the terms of the sale, as opposed to the platforms controlling them - for the most part.
Hi Prof. Hagiu and Prof. Wright: Thanks for the wonderful and thought-provoking article. The article presents examples of B2B platforms (MetalsHub). However, the article also emphasizes that without end-users affiliation, network effects (a key characteristic of platforms) can't be generated. B2B platforms may not, in general, have connections with their customers' customers. Can you shed some light on why B2B platforms should be called platforms at all?
Because they can connect business buyers with other business sellers (like Metal Hub). Sure, the business buyers may have their own customers and the platform may not have any connection with those end-customers, but they are connecting buyers and sellers nonetheless.
Hey Professors, What do you think about Ke Holdings INC, a Nasdaq listed Chinese home selling company. Do you think it's a classic type of platform business or not? In the early stage of business not only gathers home selling information from the developer(1st hand) and property owner(2nd hand) to the potential buyers, it also controls the process of property transaction between buyers and sellers. Nowadays, it also facilitates information sharing between brokers on the platform and enhances efficiency and transaction possibility between the broker that has buyers and one that has sellers, vice versa. Thank you.
Hi YC, I don't really know what KE does but from a quick look at their website, it seems that it has a brokerage part and other services. I don't think traditional brokerages are primarily platform businesses. They mainly provide infrastructure, information and support to their brokers/agents, who then facilitate connections between buyers and sellers. And the other services provided by KE don’t really seem to be platform businesses either. There may be some element of platform, but doesn't seem to be the main thing.
Coming from the computing industry, I tend to favor definitions of "platform" that center on a technical interface that standardizes the interactions between modules on either side of that interface, with a platform being a curated collection of said interfaces that makes it easier for those on opposing sides of said interfaces to accomplish a given purpose. Most importantly, the interface enables modules on opposing sides of the interface to innovate independently, thus accelerating the overall rate of innovation of the platform's ecosystem. A great example is Microsoft's Direct3D API, which enabled 3D Graphics Processing Units (GPUs) to innovate independently of game software. This created the first profitable, large-scale niche for GPUs, which led directly to their being used in today's most valuable GPU application: AI.
This definition lends itself to non-computing examples, such as the lens mount (https://en.wikipedia.org/wiki/Lens_mount), the Picatinny Rail (https://en.wikipedia.org/wiki/Picatinny_rail), the tractor's three-point hitch (https://en.wikipedia.org/wiki/Three-point_hitch), and potentially the most valuable physical interface of all time: the shipping container (https://en.wikipedia.org/wiki/Intermodal_container).
The Picatinny Rail is a particularly informative example, as it enabled guns (notably the AR-15) to transition from product to platform, which has made the military's guns much more flexible but which has also complicated the heck out of civilian gun control legislation.
I have been unable find any academic papers in the platform-related literature that study ANY of these non-computing platforms. This is, IMHO, a serious oversight! These examples demonstrate that novel physical interface standards can unlock enormous value, just as digital interfaces can do -- value that could be unlocked in *many* other physical industries, if only the theory and practice that is now known wrt computing platforms were applied to non-computing platforms.
I encourage you to aim a grad student at this research question. 🙂
Hello Andrei and Julian. I have a query. You categorized Xbox and Playstation consoles as platforms. They enable users to play games produced by third-party developers for those consoles. However, both the consoles do not allow the third-party developers to interact with the end users directly, which is a core characteristic of a platform. Both Sony and Microsoft do not allow that direct interaction. Pls educate me how Xbox and Playstation consoles are platforms.
Developers sell their games to end-users "directly" via the console app stores (or via retail stores). That means they control the terms of the sale, as opposed to the platforms controlling them - for the most part.
Thanks Andrei
Hi Prof. Hagiu and Prof. Wright: Thanks for the wonderful and thought-provoking article. The article presents examples of B2B platforms (MetalsHub). However, the article also emphasizes that without end-users affiliation, network effects (a key characteristic of platforms) can't be generated. B2B platforms may not, in general, have connections with their customers' customers. Can you shed some light on why B2B platforms should be called platforms at all?
Thanks,
Ritwick
Because they can connect business buyers with other business sellers (like Metal Hub). Sure, the business buyers may have their own customers and the platform may not have any connection with those end-customers, but they are connecting buyers and sellers nonetheless.
Hey Professors, What do you think about Ke Holdings INC, a Nasdaq listed Chinese home selling company. Do you think it's a classic type of platform business or not? In the early stage of business not only gathers home selling information from the developer(1st hand) and property owner(2nd hand) to the potential buyers, it also controls the process of property transaction between buyers and sellers. Nowadays, it also facilitates information sharing between brokers on the platform and enhances efficiency and transaction possibility between the broker that has buyers and one that has sellers, vice versa. Thank you.
YC
Hi YC, I don't really know what KE does but from a quick look at their website, it seems that it has a brokerage part and other services. I don't think traditional brokerages are primarily platform businesses. They mainly provide infrastructure, information and support to their brokers/agents, who then facilitate connections between buyers and sellers. And the other services provided by KE don’t really seem to be platform businesses either. There may be some element of platform, but doesn't seem to be the main thing.