Notes from Hack Day at The Guardian

We hosted our first Hack Day last week at The Guardian. Amazing fun.

Here’s a 15min highlight reel:

We did a lot of the standard stuff that makes Hack Day so interesting, but there were a few innovations to the event format itself that I thought worked really well, too:

  1. DabbleDB. Simon Willison setup a simple hack submission queue using DabbleDB, a handy online database tool. It’s as if the software was designed for this purpose. Two nice benefits: 1) you can upload a screenshot with your submission which it displays nicely, and 2) it prints beautifully. I handed out a hardcopy of the hack demo queue for each judge who then used the list to take notes.
  2. Double Screens. We setup 2 projectors so we could jump back and forth between presentation locations and save some time. While one person was presenting, the next person was setting up on the other screen. I was a little worried it would be distracting, but that wasn’t a problem at all.

    I think this is primarily what kept the pace up. We got through 37 hacks in just about an hour. At that pace you couldn’t really afford to look away. Oh, and Simon’s lightning timer was hugely helpful, too.

    This then had the nice effect of giving the judges more time to deliberate…

  3. Comprehensive recognition. The judges went through every single hack and found a way to acknowledge each participant. Emily Bell did a sort of improv act dishing out the jokes. She first went through all the hacks that “we would have given an award to”. Then she handed out the trophies…
  4. The Guardian Hack Day TrophySilly trophies. These worked perfectly. You can keep it on your desk. It makes no sense to anyone else. And it reinforces the idea that the recognition is for the work itself, not for winning a competition. We did hand out a couple of Flip cameras and Make Magazine generously offered some free subscriptions for the hardware hacks, but the emphasis was clearly on the hackers and their hacks, not the idea of ‘winning’.

Otherwise, it seemed to operate much like other Hack Days, except for the refreshing focus on hacks that mean something. I wasn’t sure what kind of hack quality to expect which was in fact very high, but I loved the fact that most of the hacks had the added dimension of context.

Many times a Hack Day results in a lot of amazing technology solutions for problems that don’t exist. I would never challenge the value of creativity for creativity sake, as that’s a big part of what Hack Day is about. But I was really happy to see that in addition to the impressive technical hacks things like Ben Griffiths’, Rob McKinnon’s and Simon Willison’s hacks (to name a few) presented data and information in new ways that could influence the way people think about what they are reading or interacting with.

Anyhow, the event was fantastic, and I’m really looking forward to doing it again.

Celebrating in the streets of San Francisco

Off topic here, but this video is worth sharing. My wife and I decided to take a stroll after the election speeches. We were heading for a pub but got sidetracked by all the noise in the streets of San Francisco. Then we saw a crowd forming and cops smiling, not a recognizable combination.

This is what we saw (1 min):

Some other accounts of the event:

Neil Girling: “Extra Action Marching Band led the crowd in jubilation, and there were many cheers and chants of “Obama” and “U S A.” The mood was ecstatic, and the cops were polite and extremely hands-off; a little after midnight, when they finally asked Extra Action Marching Band — who have a reputation for chaos and noise — to start to shut down, they did so with smiles and were met with the same.”

Tim Redmond, SFBay Guardian: “San Francisco is going crazy. I haven’t seen this much excitement in the streets since we shut down the city when the Iraq war began. But this time, we actually have something to celebrate.”

Sean Bonner, SF Metblogs: “My neighborhood went 9 kinds of insane last night.”

Strange Things Will Happen: “It was like Italy had won the World Cup, only with less mopeds and more high-fiving.”

Why the open strategy is a good idea

The giant dotcoms and innovative Internet startups have been testing and proving approaches to openness as a strategy over the last few years. The ideas seem to have permeated some of the farther corners of the Internet now, and I think we’re on the cusp of an explosion of open strategies and concepts across all markets, not least of which is the publishing world.

The most recent notable examples came out of The New York Times and BBC.

The New York Times took Federal Elections Commission data and repurposed it for people who build web applications. The FEC site is good and the data is mildly useful there, but The New York Times is able to shine a spotlight on what they are doing and make a more useful interface to their data. Given the power of their brand they can also help pull together people from around the Internet who understand data visualization and how to build interactive web sites.

The New York Times is embracing raw data in ways that give context and meaning to the mashup world that has grown so much in the last few years.

Jeff Jarvis’ NYC startup DayLife is another interesting but different type of example:

“Our technology collects content from thousands of high-quality online sources, deeply analyzes and parses it, and creates a trove of data that can then be reused in an infinite number of ways by publishers of all sizes.”

The DayLife platform gives them the ability to not only create a pretty good destination site but also to power other people’s web sites with interesting content they have identified and classified. We have used it on guardian.co.uk to enhance our Olympics coverage and US Elections coverage, among other things.

But DayLife went the extra step recently in making it possible for any of the content owners in their system to open up and release their content as an API via the DayLife platform, the same way The New York Times released data from the FEC via nytimes.com.

DayLife is playing data aggregator and distributor for publishers who haven’t figured out how to do this themselves:

“Using Enterprise API, you can launch your OWN API to your OWN CONTENT, all powered by Daylife’s proven technology platform. And you can do this in a matter of days.

You’ll get to choose whether to make your API available to the world at large, or limit access to your in-house developers. In either event, Enterprise API lets you break out of the bottleneck of your in-house CMS to start building new stuff with your content, immediately.”

What starts to become clear when you look at these kinds of services is that media organizations should improve how they facilitate information flow. This is actually what journalism has always been all about, releasing important information to people in a useful way. The media businesses that figure out how to make information flow more fluidly across the entire Internet are going to win over time.

That’s one of the reasons we released full content RSS feeds this week on guardian.co.uk. Rather than require people to visit the web site to read articles we post, they can get what they want when and where they want it from us.

We want to make guardian.co.uk useful to people in whatever context matters to them wherever they are on the Internet.

This is a must-have feature of publishing today even though Forrester’s recent study shows that very few people understand RSS. Mark Hopkins of Mashable.com noted that opening out is not just about serving end-users. It’s about being a part of the activity streams happening all across the Internet:

“If you turn your attention to the most popular sites on the web, sites like Facebook, MySpace and Google all have syndicated content strewn all through them. Let alone sites like FriendFeed, Plaxo and and thousands of blogs and news sites out there that rely on aggregation of content via RSS.”

But the open strategy is not just about opening out. It’s also about opening in.

BBC.co.uk/music is a really good example. They recently began integrating data from other sites and then releasing the raw information in ways that developers would be able to use elsewhere, as well.

“By adopting [the MusicBrainz] open standard, our pages are able to benefit from public domain content linked from MusicBrainz such as biographies from Wikipedia and discographies from MusicBrainz. But MusicBrainz IDs also make it straightforward for third parties to work with our data and automate links to our pages.”

BBC is linking both literally and figuratively to the open web.

The benefits to doing this are obvious and immediately tangible on some levels and then much more strategic and a bit abstract on others.

First, Google’s search engine will reward sites that reference and get referenced by authoritative and relevant sources. BBC’s Matthew Shorter adds,

“Having a persistent, and increasingly rich, resource to link to for each artist on the BBC should also help those pages appear higher up the search rankings”

Second, being the essential data source for a particular topic creates lots of opportunity as the number and size of the customers of that data increases.

For example, you can be sure that Tele Atlas made a lot of money when Google committed to a 5-year deal for their location information:

“The agreement spans Google’s current and future map-based services and navigation offerings across mobile, online and desktop environments. These include the Google Mapsâ„¢ and Google Earthâ„¢ services and mobile applications such as Google Maps for Mobileâ„¢. The agreement also gives Tele Atlas access to edits for its maps from Google’s community of users, whose suggested changes can help the company further increase the quality and richness of Tele Atlas maps.”

But no single source of data is ever guaranteed to be the most important or relevant source on the Internet forever.

Actually, it’s not inconceivable that OpenStreetMap will be more valuable than NavTeq and Tele Atlas very soon, as it is has the added benefit of being enhanced by humans every day. You can think of it like a Wikipedia for geography.

Plus, it’s free to use.

The business of openness is about being a part of the wider ecosystem in addition to creating your own. When you’re open you can be relevant to people wherever they are on the Internet in addition to when they make the effort to visit you. And when that relationship becomes meaningful the revenue streams will find their way to you, too.

eBay, Salesforce.com, Flickr, and Amazon owe much of their success to their approach to openness. They’ve opened up their platforms in ways that allow other sites and participants in the Internet ecosystem to both take from and add to their services.

If you need clarity on the revenue model, look no further than Google’s AdSense. AdSense accounts for well over 30% of Google’s total revenue. They wrote checks totalling about $3 billion in the first half of 2008 to all the partners who carry the ‘Ads by Google’ ad unit out there. That’s a pretty good incentive to participate in their ecosystem.

With a little creativity, the open strategy will create a lot of opportunity for any media organization. And sometimes I even wonder if it will be the only model that works at some point in the not too distant future.

The opportunity cost of noiselessness

At minute 4:30 in LCD Soundsystem’sYr City’s A Sucker‘ a tightly bound harmonic ‘Aaah’ and the shout that arises from beneath it speaks volumes about what the media business often means to people.

What we want is what you want. What you want is a case of the hah hah hah’s.

It’s like casinos and gamblers, drug dealers and addicts — a sort of degenerative codependence.

The ‘Aaah’ is brief. It sounds nice and pleasant and makes you think everything is happy here, production and consumption joined for the good of all.

Behind it, however, is an angry or perhaps exhausted shout that breaks through just for a moment at the end. It’s the musical representation of The Narrator’s struggle in Fight Club:

“We’re consumers. We are by-products of a lifestyle obsession. Murder, crime, poverty, these things don’t concern me. What concerns me are celebrity magazines, television with 500 channels, some guy’s name on my underwear.”

The media business is not the only space in which creativity wants to escape the dominant and manipulative incumbent power structures. Finance. Healthcare. Government. Law.

Product design is a great example. In a recent TechTalk at The Guardian Matt Webb argued that people want to use physical objects to connect with people. Social networking is a feature that can be unlocked from within everything we touch.

Nearly as interesting as his philosophy and his prototypes is the fact that Matt was able to build these things on his own. With very little cash he circumvented traditional product manufacturing to make these new ideas real.

Matt Webb's Olinda Radio

After his talk one of the staff asked whether the entire last century was a weird anomaly in the history of mankind. He wondered whether the means of production had become so sophisticated and expensive that they ultimately crushed man’s natural tendency and desire to build things. That’s a good question.

Did the machines and systems and processes and subsequently their impact set the bar for success so high that many people stopped trying?

Lucas Gonze explores this thinking in terms of music. Clay Shirky sees similar patterns in television.

You could argue that the second industrial revolution was the beginning of the great numbing of humanity. While we changed the world at unprecedented scales, the consequence was a systematic reduction of the noise that comes from wider participation.

Human messiness was suppressed to pursue perfect design.

But maybe the noise of participation has music within it that our ears don’t yet understand.

Jeremy Keith got me thinking about some of this further in his dConstruct keynote. He talked a bit about evolution, randomness and power. Once a power law is established it puts a large percentage of the participants in the system at a disadvantage.

Those systems undoubtedly created huge opportunities and changed lives dramatically, frequently for the better, but the indirect costs are becoming more clear today.

In another song called ‘Yeah‘ on the LCD Soundsystem album, James Murphy challenges people to wake up. He repeats ‘Yeah’ over and over like a mindless chant. He doesn’t sound interested or excited. He just agrees as if he lost the will to disagree. And then he breaks out of the trance for a moment and says:

“Everybody keeps on listening in. Nobody listening up.
Everybody keeps on talking about it. Nobody’s getting it done.
I’m tired, tired, tired now of listening, listening… knowing that the ship’s gotta run.”

The optimist hopes forces such as the Internet will reengage the world and empower people to do things they felt excluded from doing before, to participate again and to add to the collective experience of humanity.

The pessimist fears that people are being played by markets designed to take from them and that they are failing to recognize the impact of consuming the goods sold to them…that we are complicit in the growth of the forces that hurt us.

Fred Wilson sees opportunity across all markets to use the Internet as a way to empower people again. He writes about the wider strategy in the investments he makes at Union Square Ventures:

“[The Internet] is taking power away from existing large institutions and pushing it out to smaller entities and often all the way to individuals. In the process it is building up new institutions (such as Google), but the net result appears to be a distinct shift of ‘power to the people.'”

In Adam Greenfield’s insightful essay ‘Waiting for the Whirlwind‘ (via Tim O’Reilly) he articulates some of the deeper fears in America that cause and result in the nomination of someone like Sarah Palin to such incredible political heights.

“The things that endear this onetime nowhere-burg mayor to Americans are indicators that a whole lot of people think tomorrow came too soon…Where they were once called to dream and to believe that their best days as a community still lay ahead, [mainstream Americans] are now at war with the future.”

If Palin was a surprise to anyone then they weren’t paying attention when California voted in a seemingly unqualified feel-good entertainer to govern the region….twice. We elected one of them President…twice.

Palin simply reflects a common desire to maintain the co-dependence of our current political structures.

I have to agree with one of the comments posted in response to Mr. Greenfield’s essay where Daniel Erwin challenged people to participate usefully in whatever this trend is about rather than run away and point fingers.

“Don’t be one of those people who tries to stop the train because most of the world is “crazy” and values things you (and I) don’t understand. Just keep doing your work and you’ll do much better than all this fearful complaining.”

The test for the next century may play out in the way we engage our diverse natures to advance as a whole or rather as many parts of a whole. What do we advance toward? I’m not sure it matters…as long as lots of people are participating and that we recognize how to make corrections dynamically along the way.

James McLurkin studies and builds swarming robotics which are inspired by an obsession with insects. Ants, for example, make lots of mistakes, dropping food and stepping on eachother, but they recognize signals around them that give them clues as to what decisions to make and thus accomplish amazing things as a whole.

The mathematical theory behind his swarming robots is derived from research on distributed algorithms — the idea that problem solving can be tackled by different systems on a network.

It’s about zooming out, abstracting beyond our differences so that individual uniqueness becomes a point of leverage for something bigger collectively instead of worrying too much about the future which is guaranteed to be full of errors in judgment no matter what we do.

Imagine if Google chose not to index less popular web sites or perhaps only the left-leaning political sites or maybe only scientific research documents. They could have focused on eliminating the noise entirely.

Instead, a gigantic market grew around Google’s search engine because they delivered on the expectation that everything on the Internet can be found there, no matter how uninteresting or useless or potentially offensive the unique individual parts of the whole collection seemed to be.

Google embraced the noise. They didn’t care to be perfect. And now the opportunity before them seems nearly boundless.

The future for expensive TV is bright

Clay Shirky gave a fantastic keynote at MediaGuardian Edinburgh International Television Festival about how the TV business needs to adapt to the community behaviors happening around their programming online with or without their knowledge and consent.

He was very well received and undoubtedly inspired some new thinking, though I’m sure he wouldn’t have been embraced so wholeheartedly by this crowd had he done the same talk he delivered at Web 2.0 Expo earlier this year. In that talk, he gave a harsh view of the TV landscape and the blinders keeping people in that business from embracing and feeding the ‘cognitive surplus‘ happening out there as a result of the new social dynamics online.

I was able to catch him at a cocktail party later, and we spoke about the power laws that are starting to show cliff-like shapes in the media business. He emphasized that at the peak of the power curve there’s a much higher endpoint than what we’ve seen in the past. And the tail may have gotten longer at the expense of the curve in the middle.

power law long tail
In other words, in order to have sweeping success in the mass market, production is going to cost a lot more in the future. The tail just gets longer and longer. But the people in the middle who have enjoyed healthy margins on the past on things that are somewhat costly and have somewhat interesting customer numbers are getting squeezed from both sides.

I asked if this could actually be an argument supporting what many TV businesses are doing — searching endlesly for the next hit, the mass market play first and foremost. Could the increase in the cost of mass market success make it easier for the leading channels to break away from the pack? Could a leading position today actually be the only way to secure a successful future?

Clay added that the market for dominance in television may only be 2 or 3 national channels. And if those channels don’t spend enough to make truly exceptional programming worthy of appealing to the masses, then they will be competing with the millions upon millions of participants producing material somewhere to the right of the cliff.

This got me thinking about one of the important panels of the day…the News discussion. The panelists there discussed diferent approaches to prime time news shows, among other things. And I couldn’t help but wonder if Michael Rosenblum spoke truth when he predicted the end of the prime time news show:

“The notion of linear television news is antithetical to the web – a distinctly non-linear, VOD environment. The notion of waiting until 6:30PM or 10PM to get the ‘breaking news story’ is simply a non-starter in the web world…technology has now consigned that model to the trash bin. But people still cling to it in the fear that the tidal wave of news and information uncontrolled and unedited is far too overwhelming for the average person.”

That’s not to say that very very difficult and costly journalism wouldn’t come and take its place. I hope it does. And after talking to Clay I feel more confident that the market would in fact reward the producers for exceptional journalism for the mass market. Paying top dollar for important work seems real and justified.

Pivoting on data with Freebase

This screencast from David Huynh describes a data browsing interface he built using Freebase. It’s a fantastic data visualization tool that allows you to pivot and filter results that can then be rendered in lists, on maps or on a timeline. He calls it Parallax:

Stefano Mazzocchi explains the inspiration for the tool:

“David’s idea was to organically combine the ability of faceted browsing to drill down on a set of given items, but then to use the faceted values as the new set of items, thus ’sliding’ the faceted browsing window onto the selected set and make that the new point of view. This would create a way to browse “sideways” from a particular set of items, following items of different type that are connected to the currently browsed ones.”

Very clever.

(A bit more on Freebase here.)

The biggest company you never heard of

IDG was profiled recently in a Guardian article titled “The biggest company you’ve never heard of“.

“In 2007 it had revenues of more than £3bn, it publishes more than 300 magazines and 450 websites globally (including Computerworld and InfoWorld), employs more than 13,000, and encompasses the huge global analyst organisation IDC. There is also a consumer division in China, where IDG publishes titles such as Cosmopolitan and National Geographic under licence.”

The founder, Chairman, owner and lifeblood of the company is a man named Pat McGovern who was ranked number 64 in Forbes’ list of the 400 richest Americans in 2007.

The success of IDG is undeniable. And though I’ve been critical of their online acumen in the past, the company as a whole offers some very interesting lessons for us all.

McGovern keeps an incredibly lean central corporate organization. He is very involved at the board meetings for each business unit, but IDG corporate headquarters serves more of a support and investment function than one of control and leadership.

Business unit leaders have total authority. With that comes responsibility, and if a business unit is showing weakness, pressure is applied immediately with a heavy hand. The staff in the business unit are shielded from this dynamic and thus, in many ways, consider themselves employees of Pat McGovern first and foremost.

Journalism matters at IDG. McGovern had some hard choices to make in a kerfuffle over a story that was influenced by an advertiser not long ago. Former IDG employee Chad Dickerson wrote this about the incident:

“I don’t know the inside scoop of what happened at PC World, but you can bet that Pat McGovern was in the mix, empowering people like Bob Carrigan to make the right decision in the end. In the news cycle, this might seem like a flash-in-the-pan story about journalism, but for me, it’s a story about respect and good business in the long term. Hats off to IDG and Pat McGovern.”

Creativity is encouraged, but evidence drives the decisions. IDG has launched a few noteworthy offerings such as the technology ad network and an interesting approach to prediction markets on The Industry Standard site. BtoB magazine writes:

“So far, 100 bloggers have been approved for the network, with each being vetted by IDG editors. These bloggers cover several tech-related categories, such as hardware, mobile, security and storage.”

But nothing moves without careful attention to the ebb and flow of the revenue forecasts. If growth isn’t there the train stops.

Staff like working at IDG. McGovern does in fact deliver your holiday bonus to you with a handshake, a smile, a little chit-chat and often a very specific insight about your contribution to the company. It’s remarkable. And that respect given to the individual brings with it loyalty and commitment. His staff want to please him.

I think there are many things IDG could do to be a much more influential force in the online market, but there are times when I look at the numbers and wonder if I just don’t have the vision to see the longer term game McGovern is playing.

Could it be that IDG is merely a funding mechanism for his personal quest to understand the power of the brain? I don’t know if he still rides coach on his frequent flights to China, but those kinds of behaviors he’s famous for internally convinced me early on in my time at IDG that it’s not all about the money.

Yes, IDG is the biggest company you never heard of. You may never hear of it again, actually. The decentralized and targeted b2b IT print/web/events model may seem like a yawner at first glance. But while your company spent the day worrying about how to improve its Web 2.0 offerings, IDG’s accountants tracked another $8 million in revenue from around the world.

Sam Pullara vs the “Google Killer”

Yahoo!’s Sam Pullara cracked me up yesterday. In about a day he replicated the user interface and functionality of the overhyped $33M “Google killer” startup Cuil.

Cuil released their service on Monday to much fanfare though not without some major glitches. Sam single-handedly brought the well-funded and overconfident company back down to earth with a few strokes of the keys.

He calls his creation Yuil. It uses Yahoo!’s recently launched BOSS search platform and looks and feels identical to Cuil. And the output of Sam’s creation appears to be at least on par with what they built.

“I thought I would have a little fun with it and put together a quick parody of it by mashing up their UI and Yahoo!’s search results. As usual, the biggest problems I had were related to my pathetic Python skills.”

A few lessons here:

  • A good feature does not necessarily make a good startup even if it costs $33M.
  • The market supports ambitious startups. Very good.
  • Ambitious startups can crap all over the market. Very bad.
  • Being a former Google employee does not in itself make you important.
  • Don’t mess with Sam Pullara.

UPDATE: Ironically, YUIL is now dead. I suspect he’s either rebuilding it somewhere to deal with the traffic load, or someone asked him to take it down.

Defining online media platforms

My thinking about what platforms and ecosystems look like in the online media world seems to evolve constantly. It has certainly become more clear, bigger and more nuanced the last 2 years or so, but the language to describe a media platform feels very unfinished still.

It may be that the word ‘platform’ is throwing off conflicting ideas of what exists in my head. If you ask 10 people to define a platform you’ll get 10 different answers.

You can think of a platform in several different ways. There’s the functional role it serves. You can talk about the ecosystem around it. Some explain it in terms of the pieces and how they interact. It can also be an abstract concept or more of a strategic view of things.

Blogger (and conspiracy theorist) Kid Mercury has a paper of sorts defining platforms in terms of the strategies that they serve and their relationship to products, particularly in the Web 2.0 context:

“Products are “things” (goods, services, experiences, etc) that are sold; platforms are the intermediaries that deliver products. True to Yin/Yang form, the two are complementary yet opposing as well; platforms cannot exist without products, and products need platforms to be put into context and to be found.”

Wikipedia has several entries on platforms including “computing platforms“, “political platforms” and “platform shoes“:

Platform often describes the set of hardware components that make up the computer itself, that the software is written to target (often just described as “written for an architecture”).”

Auto manufacturers initiated platform strategies in the 1960’s and ’70’s to improve several aspects of their processes:

“Vehicle platform-sharing combined with advanced and flexible-manufacturing technology enables automakers to sharply reduce product development and changeover times, while modular design and assembly allow building a greater variety of vehicles from one basic set of engineered components. Many vendors refer to this as product or vehicle architecture.”

Similarly, John Hagel and John Seely Brown noted how platform design in auto manufacturing in Asia has enabled amazing efficiencies in their 2006 paper “Connecting Globalization & Innovation: Some Contrarian Perspectives“:

“Honda’s share of Vietnam’s motorcycle market, for instance, dropped from nearly 90 percent in 1997 to 30 percent in 2002. Japanese companies complain about the “stealing” of their designs, but the Chinese have redefined product architectures in ways that go well beyond copying, by encouraging significant local innovation at the component and subsystem level. “

David S. Evans, Andrei Hagiu and Richard Schmalensee go into great detail about various approaches to platforms taken by companies like Microsoft and Apple in their book “How Software Platforms Drive Innovation and Transform Industries.” They explained several models for how platform businesses work:

“In a multisided strategy, the software platform mainly facilitates inter-actions between the sides of the platform (particularly applications vendors and end users). In a single-sided (or merchant) strategy, the platform either produces the complementary products itself or buys them and resells them to end users. “

The book jumps from strategy down to specific detail such as this bit about how to develop relationships with customers:

“In the case of the software platforms we have examined, even the weakest relationships are far deeper than the arm’s-length relationships one sees in many one-sided industries. Software platforms can’t have direct relationships with the thousands of small developers, hardware makers, and peripheral device makers. Yet they document and make APIs available to developers, provide interface information to hardware and peripheral makers, and make sure their platforms have the relevant drivers for the peripherals. And they develop relationships through large developer conferences and small focus groups that bring some of these smaller players together. At the other extreme, software platforms often have deep relationships with several larger partners. These relationships involve regular exchange of information and joint work on defining new standards and specifications. They may also involve joint investments in product development or marketing.”

Thomas Eisenmann of Harvard Business Review has done some interesting work addressing the network effects of the modern media platform in his paper called “Platform-Mediated Networks: Definitions and Core Concepts“. He uses Visa’s and Microsoft’s XBox platforms to compare and contrast different methods for creating network effects. He talks about how a jointly sponsored platform like Visa’s leverages more complicated but more scalable relationships vs the single-proprietor platform like Microsoft’s which has lots of dependencies.

Visa vs Xbox platform ecosystem
He builds on this view in his follow up work with Geoffrey Parker and Marshall Van Alstyne for MIT. In “Network Platforms – Core Concepts” he builds network effects as a necessary component of a platform:

“A “Network platform” is defined by the subset of components used in common across
a suite of products (Boudreau, 2006) that also exhibit network effects. Value is exchanged among a triangular set of relationships including users, component suppliers (co-developers), and platform firms.”

They spell out some of the trickier issues the platform organizations need to consider such as channel conflict:

“Platform providers must determine how much of the value created through network
interactions they should seek to capture and from which users. consider who adds the most value. A bigger network served by a single platform can create more value in aggregate, but users may worry that a dominant platform provider will extract too much value. Likewise, when the participation of a few large users is crucial for mobilizing a network (e.g., movie studios vis-a-vis new DVD formats), conflict over the division of value between platform providers and “marquee” users is common.need to give in order to get. Controlling most of a multi-billion dollar business is better than controlling all of a million dollar business. “

Just having a platform and a platform strategy is not enough. There are organizational requirements that make it possible to drive a platform business. Kid Mercury adds some insight into the ways in which organizations must institutionalize capability creation to serve platforms rather than functional hierarchy to serve products:

“There can be no long value chains where each employee is a rung in a ladder, with all the value ultimately flowing to the top. Such hierarchical organizations are essentially immobile by design; they are not capable of creating new capabilities because everyone in the vertical hierarchy is participating in a way that only serves the existing value chain. This is great for incremental innovations, as such a structure essentially institutionalizes the process of adding more value to existing value chains. It is not so effective, though, for creating new value chains.”

I’m looking for more views on platform strategies and ecosystems, so please comment below if you have any favorites. I haven’t found as much dialog and literature as I’d like.

I suppose all this goes hand-in-hand with some of the discussion around designing for growth. Maybe I’m alone here, but I’m more interested than ever before in this old magazine idea.