Wednesday, March 04, 2015

Platform capitalism - a term ripe for exploring

Clearly, platforms are the new giants of the economy. Global, efficient, scaleable, asset light, flexible, and with great power and a strong tendency towards monopoly. 
We're just starting to understand the game. 

NeverMind the Sharing Economy: Here’s Platform Capitalism, by Sebastian Olma, is a good explanation why the sharing economy is a mis-leading term for something completely different.
Despite the slightly shrill tone, the article has some important insights. Here are a few quotes:

 “These are digital platforms that roughly do two things: either making the old practice of re- and multi-using durable goods more efficient or expanding market exchange into economically uncharted territory of society”.

“While marketplaces connect supply and demand between customers and companies, digital platforms connect customers to whatever. The platform is a generic ‘ecosystem’ able to link potential customers to anything and anyone, from private individuals to multinational corporations. Everyone can become a supplier for all sorts of products and services at the click of a button”.

“It seems fairly obvious that the entire purpose of the platform business model is to reach a monopoly position, as this enables the respective platform to set and control the (considerably lower) standards upon which someone (preferably anyone) could become a supplier in the respective market. Instead of cutting out the middleman, digital platforms have the inherent tendency to become veritable Über-middlemen, i.e., monopolies with an unprecedented control over the markets they themselves create”.

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