We’ve been analyzing the sacred myths of the platform economy and revealing the real practices that platform businesses have mastered. This is work from our report, “Earn Your Place In The Platform Economy.”
Myth #3: Platform economies are always winner-takes-all. Reality: In most industries, platform businesses will fight for share in different parts of the value chain: distribution, production, supply.
This myth stems from the massive growth and market dominance of mature platform businesses such as Airbnb, Amazon, and Uber. But even these market makers are being challenged by incumbents, competitors, and regulators. Amazon is challenged by Walmart in the US and India (through its acquisition of Flipkart). Airbnb’s core value proposition is being attacked by local regulators concerned about absentee landlords and unregulated hotel space. Uber is being thrown out of entire countries as well as competing tooth and nail with Lyft for drivers’ love and passengers’ affections. From the report:
- Most industries will not be winner-takes-all . . . Antitrust laws, the reality of physical assets, and the sheer cussedness of customers will prevent most industries from becoming natural monopolies. For example, we won’t see television production and delivery consolidate into Netflix and Amazon. Or wake up to find that Bank of America or DBS Bank are the only banks available. There will be a place for your own platform business.
- . . . but first-movers will still have an advantage. Being early will still give a platform business the advantage of learning early how to price a service, balance the customer/supplier value equation, and create stickiness by attracting a critical mass of customers and suppliers. It will also provide a head start on collecting data and insights to appeal to customers and suppliers. The CEO of a platform for city transit transactions calls data “the new whitepaper.”