Latest posts by Johannes Mikkonen
- Do the Rules of Platform Control our Lives? - 22 May 2017
A platform is a technology-eanbled business model that allows multiple participants (producers and consumers) to connect to it, interact with each other and create and exchange value. This plug-and-play model has open connectivity.
An emergence of the digital platform economy is driving fundamental changes in our societies. The way people come together, communicate, and create value is changing. Thesis: In the foreseeable future, all of our interactions with strangers will be facilitated by global digital platforms: from trade to meetings to sex to services and peer-help. Most successful digital platforms can reach near monopoly in months, allowing us to do the things we could not do before, yet granting very little power to their users or the societies they operate in.
Are we losing or gaining power as individuals and as societies as everything is becoming a platform?
The possibilities and limitations are inherent in platforms, because platforms are a set of rules that enable many things, but control others. As digitalisation becomes an increasingly integral part of the physical world, the role of platforms becomes more important. Platforms can have many kinds of rules. Some rules are interfaces that force service to operate in a predefined manner so that it works or is understood. Examples include the rules of Appstore and Google Play. Some rules serve as limitations when privacy issues are concerned. Using facebook as an example, its platform may prefer to keep the network closed to their demographic group. Some rules function as laws and service standards used for controlling people working on the platform or bots on the platform in Uber’s case. Platform monopolies make it harder to change their rules. The platforms aim to reach monopoly status because
- the value of the platform comes from the network size within the platform, and by definition monopoly includes all the network nodes.
- monopoly is the only way to ensure value capture in the zero marginal cost markets.
Fast growing, global platform monopolies control our lives through the rules that only platform owners can change. A platform owner is someone who can stop platform operation. In co-operatives, for example, one can hardly claim that all participants are platform owners.
This is why we need to build new capabilities and ways for platform users to have their say on platforms rules.