Platforms are Eating the World
You may have heard the expression, “software is eating the world”. It was coined by Marc Andreessen in a famous Wall Street Journal Op-Ed in 2011. What Marc meant was that software and Internet services are becoming dominant and even critical in every single industry, not just IT.
Almost 11 years later, it’s platforms that are “eating the world”
This new video released by WellAI explains why platforms continue eating the world:
Daniel Satchkov, head of machine learning at WellAI, argues that there are at least 5 reasons why “platforms are eating the world”:
- Platforms’ growth is represented by an arctangent function. Platforms are cooperative at first with all three participating parties: users, content creators and advertisers. But then, at the steep part of the curve, you have to pay to create value.
- As the result, platforms’ margins are incredibly high because platforms’ revenue cycle is extremely selfish, per item 1 above. For example, YouTube and Facebook take 90%+ of the value created because when you publish on those platforms you are a volunteer working for YouTube/Facebook for free.
- Platforms are some of the best scalable technologies. One could expand from 1 platform to 10,000 platforms in no time.
- Platforms have a central authority.
- Access to cheap Fed money over the last decade made sure that competition was either taken out or bought out.
Centralized platforms, such as YouTube and Facebook, are extracting maximum value right now – i.e. they are at the steepest part of the arctangent growth curve.
Blockchain transactions can do everything platforms can, without the central authority. They could offer competitive opportunities for thousands of platforms, not just three or four. That’s the future.
If you want to learn more about platforms, these two books were written by prominent economists:
https://www.amazon.com/Matchmakers-New-Economics-Multisided-Platforms/dp/1633691721/
https://www.amazon.com/Platform-Revolution-Networked-Transforming-Economy–/dp/0393249131/
This book addresses how a small number of companies have come to exert extraordinary influence over every dimension of our personal, professional, and political lives. The authors explain how these new entities – Amazon, Apple, Microsoft, Facebook and Google – differ from the powerful corporations of the past. They also question whether there are limits to the market dominance and expansion of these digital juggernauts. Finally, they discuss the role governments should play in rethinking data privacy laws, antitrust, and other regulations that could reign in abuses from these powerful businesses.
https://www.amazon.com/Business-Platforms-Strategy-Competition-Innovation/dp/0062896326/
This book is a compilation of the latest articles that discuss blockchain technologies as foundational to the governance and widespread adoption of these innovations—digital identities, data analytics, artificial intelligence, the Internet of Things, autonomous vehicles, distributed energy infrastructure, and quantum computing:
https://www.amazon.com/Platform-Revolution-Blockchain-Technology-Enterprise/dp/1988025737/
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WellAI Team
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