To kick off our Platform Series with Prof Julian Wright and A. Prof Andrei Hagiu, world experts in Platform Strategy and Network Economics, we talked about what you need to know about Platform businesses. What type of companies are often confused and mistaken as one. Why investors and entrepreneurs love this business model, what about them that defy conventional rules. How these companies are changing the way we work, live and trust. They share what questions to ask as investors and some "interesting" platform startups.
Transcript:
(00:00) [Music] I promise you know give us your product or service we'll turn it into a platform in 30 seconds or less for your money welcome to our platform series with Andrei and Julian today seven out of the ten top most valuable public companies are built around platform businesses and craigslist which is a platform
(00:23) business in 2019 generated 1 billion in revenues with only 50 employees and around 90 profit margins well despite its design and features has hardly changed in the last 15 years so in this video we will illuminate what you need to know about platform businesses let's start with the first question what are platform business at the
(00:47) simplest level platform businesses are businesses that connect customers okay they connect their customers together and so you know that can be enabling them to do transactions to interact to communicate and a whole host of things okay but it's very different from a traditional business that produces a
(01:09) product and sells it to consumers here they're not producing a product that they sell that their product is actually the fact that they're connecting these customers together so and these interactions can take many many different forms so like Julian mentioned it could be it could be commercial transactions so I think the most
(01:26) the best known examples of successful platform businesses that come to mind would be something like airbnb ebay amazon.com the marketplace taskrabbits and there's a ton of these which basically there's a supply side and there's a demand side and the platform allows the two sides to conduct
(01:46) commercial transactions then there are other platforms which just enable pure communication so we're networking so social networks would fit that bill something like facebook or snapchat or twitter there's lots of users and it doesn't really enable commercial transactions but through other people exchanging
(02:05) you know exchanging information or communicating zoom would also work here zoom would also qualify as a platform business and that it enables people to communicate with one another and of course there are many others there's dating apps like tinder bumble hinge whatever the relevant dating app
(02:20) is in your region and of course the recent rise of all the delivery you know platform companies of uber and delivering every single thing that you want from drugs to alcohol and yeah I think we would yeah absolutely so think of something like deliveroo or doordash which basically which connect restaurants with
(02:40) consumers and also the in some cases depending on the business model of specific delivery platforms they also have a third side which which is independent couriers or whatever they're called the people who actually do the delivery what about digital goods platform for example like apple app store is that
(03:00) also a platform business yeah absolutely so they connect consumers so in the case of let's say in the case of apple it would be consumers that have iphones with developers that create apps for the iphone and payments and another example where you're connecting the retailers or merchants that accept
(03:22) payment with the customers who want to buy something right so the in there it's very much a transactional kind of relationship you know like what I'm providing as a platform is the ability to do this transaction in a more convenient way between these two my two types of customers if I'm a max or paypal my two
(03:40) customers are the merchants and the consumers right and I'm connecting those too these are mastercard a little bit more complicated because they don't have direct relationships with the final customers they go through banks right so it's a more complicated platform that involves many parties
(03:59) right and you have issuing banks on the card holder side and you have acquiring banks on the merchant side and they bring them all together but yeah basically if you think about that whole system as a platform what about on the b2b side do you have some example of b2p platforms sure so let's think about things like
(04:14) salesforce for example which created an app exchange so it connects their business customers that use salesforce products and third-party developers of other business relevant software and there's many by the way there's many b2b marketplaces so many companies that also create that enable commercial transactions
(04:37) between business customers well I mean amazon web services obviously aws they have a big marketplace with all the software providers you know selling their software to their the businesses that use aws and if you look at almost every large software as a service player you know whether it's
(05:00) for twilio or you know any of these ones shopify as a as you know b2b players they all tend to have these big marketplaces where they're where developers come in and provide their software to the businesses okay so if you're on shopify as a merchant using shopify to power your website you want to have a whole lot of other
(05:24) add-ons and you know additional services that you can use for your business they're all available on shopify through their marketplace I think it's worth noting here as we talk about through all of these examples of platform businesses it's very important to recall some of these businesses were born
(05:40) as platform businesses from day one so they were marketplaces so say something like ebay ebay was a marketplace from day one others were actually born as products so one-sided typical products and then later became platforms so when Julian mentioned for example a lot of b2b software products even so say
(05:58) shopify or amazon web services initially they were just that they were just products later on when they became very successful lots of businesses were using them they essentially opened up to allow third-party providers of other complementary services to sell to their customers so I think we can go to into more depth
(06:16) on this specific type of transformation into a later video but I think it's worthwhile emphasising here that a lot of platform businesses were not necessarily born as platforms from day one and just to add on to that I mean this is a good place to make a distinction between the sort of linear business
(06:33) model and the platform business model because if you think about what shopify originally did you know they were producing a product they were they had a way of enabling businesses to you know have a nice website so their product was designing you know package where businesses could have a nice website very easily and that was
(06:55) something that shopify produced and sold to businesses okay that's a linear business model they produce something and they sell it to their customers then you know later on they realise there are lots of other products that these businesses wanted to use for their websites right add-ons and widgets and so on
(07:12) which shopify couldn't produce all of them you know just so many different options and possibilities and it made sense for them to open that up to other developers to provide their products and services to sell to these businesses and that's where you become a platform because you're now connecting your different customers right you're
(07:30) connecting your customers with the developers and your customers which are the businesses the merchants so in this diagram actually shows the difference between linear business and multi-sided platform physical and digital companies and increasingly a lot of companies are actually going through digital
(07:48) transformation especially you know accelerated with covid as the top priority right so the arrow shows some of the different pathways and possibilities and obviously one clear pathway is really moving from a product to a linear or a linear business to a platform business which is what we're saying and that we will want to cover this more
(08:07) in detail in our next few videos the businesses and that's evident in that diagram they don't have to be online right platforms don't have to be online there's plenty of physical platforms like a shopping mall you know which brings together the retailers or the shops and the custom and the consumer who
(08:26) wants to buy at those shops and of course you know I guess many platforms like classifieds in the past were physical before they moved online and so the distinction between online and physical is not what defines a platform it's more this distinction between the linear business model and this platform
(08:46) business model connecting customers to know that actually a farmers market or a traditional business of a shopping mall is also actually a platform business you know because you know that dot didn't really connect for me one-sided and multi-sided platform yeah I mean just to recap on one side that it would be things like say
(09:03) zoom where basically everyone is pretty much the same everyone's a user of zoom and zoom enables you know people to communicate two-sided would be something where there's a clear distinction between the two sides so say airbnb there are hosts and then there's travellers or ebay there's buyer or alibaba there's
(09:21) buyers and they're sellers and then of course you have three-sided four-sided five-sided so something like facebook I mean I think I lost count but there's at least four sides it's users advertisers app developers other websites that connect now with users allow users to connect to them using their facebook credentials
(09:40) and so on it's clearly you know shown that assess is not a platform business so let's talk about what is not a platform business and but often mistaken as one right so I think this is where our definition of platform simple platform businesses can seem deceptively simple so again and you know just in
(10:02) a few words it's platforms are about enabling transactions now the devil is in the details so there let's use some examples a lot of people would call netflix a platform for whatever reason according to our definition netflix is not a platform and the reason is very simple users go to netflix and netflix
(10:22) has full control of the inventory of movies or tv series that is shown or sold to consumers under a subscription at no points does a netflix user have a direct interaction like transacts directly with the movie studio who licences their their shows or their movies to netflix so contrast netflix to something like
(10:43) youtube where basically youtube is not in the business of actually licensing the shows they're just enabling millions of video content creators large and small to provide their content to users now of course youtube does exert some control they provide some guidelines but there's a very clear difference between
(11:05) youtube and netflix where netflix actually even though this is a digital product they do take inventory quote-unquote risk in the sense they either have to produce or actually acquire the licences to the movies or the shows that they will show to users and they sell everything under a subscription that is not the case for
(11:22) youtube so youtube is a platform business netflix is not so I'm going to bring back to the point on netflix and youtube because one of the key thing with netflix is that what you're seeing is the flooding of competitors that compete with netflix really quickly you have you know the producer themselves are having their own
(11:42) streaming service like disney and obviously here we have stan as well so it seems that it become a crowded marketplace also as well as uber right we've lived but instead with youtube you're not seeing a youtube equivalent that's a good example I mean part of the reason we like platform businesses is that
(12:01) they're much more scalable than their non-platform counterparts so netflix is a great business however it just I mean it is scalable I mean it has great scale but it's nothing like youtube because in order to scale netflix actually either has to invest in creating its own content that's very risky and it's very
(12:21) expensive or they have to go and acquire high quality content which is also pretty expensive versus something like youtube where they can just tell you know third-party content creators hey please offer the content on our website that doesn't really involve much in terms of cost additional costs for youtube
(12:38) yeah I think it's worth emphasising here you know Andrei's made pretty clear distinction but of course in reality there's a continuum between what a platform business is clear-cut platform businesses where the firm the business is purely in the business of just enabling these direct interactions between the different customers and
(13:02) doesn't get involved at all in controlling those interactions and we when we think about pure platform businesses you know ebay would be sort of a prototypical example okay I would put maybe craigslist breaks this even higher yeah so they really don't get involved at all yeah zero involvement exactly um
(13:21) and at the other extreme you have you know like a very typical retailer that buys the product or maybe at 711 or something like that they buy the products they have them in their shops and they control the interaction with the customer completely they set the prices they determine the marketing of the products and so on
(13:41) okay and in between those two extremes they're of course a continuum of different business models so some are more like platforms some are more like linear business models some are sort of in the middle if you think about something like uber or lyft they are a little bit more in the middle than at the extreme because uber if you
(14:02) think about it yes it sort of connects the drivers with the riders but it actually determines the price right and it puts a lot of you know it it determines so you can only reject as a driver you can only reject a certain percentage of rights otherwise you get kicked off so it puts a lot of sort of constraints and
(14:25) it controls a lot of that interaction now but it does give some freedom right it does allow the drivers to drive whatever car they want you know subject to some you know minimum standards and it does let them drive whatever hours they want right they don't have to turn up you know for a fixed shift like they
(14:41) might have to under a traditional employment model so you know that's uber you can think on that continuum it's it's towards a platform but it's not a perfect example of a platform and that's because it's exercising some of the control it's getting itself in the middle of those interactions it's
(15:00) no longer just in the business of allowing people to interact enabling that it's actually controlling some of that interaction itself and we can you know go through other examples where businesses are somewhere in that middle ground and just to add to that I mean I think this point about the continuum is
(15:18) fundamental and I think both Julian and I have this point of view that we don't we don't find it very helpful to be in the business of labelling different business models this is a platform this is not a platform because again given that there's that continuum you can say you're either closer or further from a pure
(15:35) platform business now that's still very informative and in fact it's also very useful when you think about strategy or how the positioning of a given company may change over time so you may start as a pure platform and then move towards more of a control let's call it control platform
(15:54) and then finally move all the way to a retailer or you can go the other way around so a good example here for instance is zappos so zappos online you know probably one of the best customer experience retailers online mostly sells shoes zappos for their first year of operation when they initially started they just wanted to be
(16:14) the ebay of shoes so initially they were a pure platform a pure marketplace after a year they just realised we want to control customer experience if that's what we want to do we can't be a marketplace we actually have to take inventory they built warehouses and they moved completely from the from the retail end of the spectrum
(16:31) sorry from the pure marketplace end of the spectrum all the way to the other side so today zappos is mostly a retailer it's not a marketplace for a platform business a lot of online retailers that aggregate merchants could be mistaken as a platform businesses so if they aggregate and own inventory they
(16:50) are a retailer if they actually do not own inventory but facilitate the transaction and sale of those merchants product then it's more like a platform business is that's correct so that's back to the distinction that we made between netflix and youtube and you're right like also read like retailers online and offline versus
(17:08) marketplaces and of course there are examples going in the other direction so the most famous of which is probably amazon you know which started as obviously the book retailer online book retailer and you know over time opened up a marketplace for third-party sellers of all kinds of other products and to
(17:27) become the everything store you know it wanted to provide everything it couldn't provide everything itself so it made sense to become a marketplace and therefore platform they are actually really looking at controlling the fulfilment the last mile part of it in terms of having the inventory you know in the warehouse and then
(17:46) controlling the fulfilment of it for certain products like they don't do that for every product but certainly for the you know for the core products that they're focused on yes they want to do that even at the same time as there may be third-party sellers that are also selling directly to customers you know
(18:01) who have control but they want to offer for their for amazon wants to offer to their customers the ability to buy you know certain products directly from amazon with the amazon customer experience right but there are other niche products that they don't they're not in the business of supplying and those are only provided by
(18:19) third-party sellers and they don't you know they don't always even offer the you know the logistics for those and I think this emphasises I mean the fulfilled by amazon example this emphasises how again how fine-grained this continuum can be so if you think of amazon like it like it basically has it
(18:36) occupies almost the entire spectrum from products that are entirely built and sold by amazon like a normal retailer or a product company so that's like on the retail and side of the spectrum then you move a little bit towards marketplace but not so now you get stuff like fulfilled by amazon so it's sold by third parties but
(18:56) amazon controls the logistics and then you move all the way to marketplace which is what Julian said long tail products that amazon never actually even wants to touch so they're sold direct like no different than ebay like third parties selling directly to consumers without amazon ever touching them it's
(19:14) under the same point of a b2b example of what is not a platform but mistaken as one there's another another type of confusion which arises and typically in b2b contexts so firms that just provide b2b products or services are oftentimes called platform businesses for honestly I'm not sure for no good reason so
(19:35) I mean good example here would be say amazon web services up until I think 2012. so amazon web services initially for its first few years of operations was not a platform business it was just a product yes it was a b2b product in the sense it provided infrastructure so cloud infrastructure and cloud
(19:59) computation services for businesses but it's not a platform business those are just products now starting in I think it was 2012 they opened up the third parties and became a platform business as Julian described earlier by allowing third-party providers of complementary software and hardware to serve the same customers that are
(20:19) being served by aws so that's an example I think everyone can relate to aws but they're I mean we see drill and I see many startups that provide b2b services or b2b products that call themselves platforms when in fact they're just glorified b2b products yeah I think that got to do the whole technology
(20:38) terminology in terms of a technology platform is usually a technology stack thing that they call themselves a platform but then a platform that has a product business model exactly I think that's absolutely yeah and we've come across this a lot so people in the tech who come from a tech background
(20:58) they will tend to call anything which has some common sort of underlying software or operating system you know that runs everything they'll call that a platform so aws is a common infrastructure that everyone uses to do the computing they call that a platform and it is a platform in some meaning of the word right like it's a
(21:17) common base on which you build other stuff okay so that's and and so if you're in a tech mindset then that's how it's used but it's not a platform business model right it's not a platform business you know at least we should make that distinction right like it could be called a platform in some physical sense
(21:36) but not as a business what about the ios and os as a do you call it a tech platform or you take a tech platform business I think operating systems are platform businesses in so far as they have at least two types of customers so users and users and third-party app developers I mean an operating system by
(21:56) itself is not very valuable right I mean all of them need third-party developers and they're definitely enable interactions between those two parties so in the case of apple so apple ios we call it two-sided because well the apple provides the hardware too right so it's hardware plus software integrated together and then you have
(22:17) users and app developers something like android is three-sided because you have users app developers and you also have third-party hardware makers so there are many different companies that provide android power phones this is somewhere where I think the tech people and the business people would agree
(22:38) right everyone says these are platforms because they're both tech platforms in the traditional meaning of the word right in terms of software platforms and their business platforms right the business model is a platform business model they're connecting customers and that's what they're in the
(22:53) business of doing so you know this is a common agreement where things diverge as you know when you get to businesses that you know that either you know one of the other quadrants so they're physical software type platforms but they don't have a platform business model right or they you know their platform
(23:12) business models but they don't have any sort of underlying common software infrastructure this is not to trying to split hairs to say like we want to call this is a platform this is not a platform again this is not that's not what's interesting about it it actually does have important practical implications
(23:30) platform businesses have certain characteristics that make them much more scalable and much more attractive than non-platform businesses so it's worthwhile to be relatively disciplined at least in our view when applying the term platform business because it does you know it does mean that there's some
(23:47) characteristics that come with it there are many b2b startups right I mean startups that provide different elements of business infrastructure so there's many so for example the business infrastructure for all kinds of traditionally offline businesses such as restaurants and and others they're trying to digitise
(24:05) there's lots of companies that provide services b2b services to these companies now some of them are actually platform businesses but i'd say the vast majority are just b2b products so they should not be called they're certainly not platform businesses according to our definition do you have an example
(24:23) right so a good example would be actually Julian will appreciate this because it's named after his favourite bird from new zealand which I think it's kia so there's a company called kia which provides Julian remind me was it like online or so assist the software system that allows restaurants to accept
(24:43) online or voice activated orders or something like that yes when you make a when you make an order on the phone they will take that order using ai they will process it and input the order into their system so you can get whatever you want you know and if there's any ambiguity it'll reroute it to a person who will pick up
(25:06) the call right so for the vast majority of calls it's able using ai to actually handle the call automatically without you actually talking to another person and that obviously saves a lot of later time this is for typically for fast food type restaurants and chains in the US right so that's a I mean again I think
(25:26) that's a tech platform it provides a very important b2b product that you know makes things more efficient and you can think about it as becoming part of the fast food chain tech stack but it is not a platform business it's just pure product for service it's a bit because the way they
(25:41) sell is that they just sell the restaurant basically to have this as a communication platform to their customer to increase the efficiency of ordering right they are not actually trying to acquire consumer and sell the consumer to use this you know like uber because that's what uber is saying use uber to actually get a cab
(25:58) you know as intermediary they are not trying to position themselves as intermediary no not at the moment yes that's exactly right it's just purely they're selling the system to restaurants they're not helping in any way restaurants acquire customers it's purely saying here's a
(26:15) software service yeah and one thing we've found with these because we looked at these for many years and you know seen them grow and a lot of these when they become big so their product their b2b product becomes big popular you know lots of people using it that's when they start opening up this marketplace
(26:35) for third-party developers to provide add-on services you know the tools and the widgets like shopify did like amazon web services did and so we can see we can see a lot of these like you know even care could do that in the future which is open themselves up by creating a marketplace and in that sense they do become a platform
(26:53) business but only on that side of it right between the developer and their customers which are the merchants another way they could become a platform as you say is to try and get the end user the end customers directly onto their you know become intermediate between those end users and and the businesses they're serving so
(27:14) there's you know there's different ways they could become a platform and obviously that's something we can go into much more detail on when we talk about going from product to platform if you have any questions to ask whether if this business is actually a platform businesses or not feel free to actually also comment on
(27:28) the video and it's a good question we might answer it in our next video as well given the fact that these platform businesses have hyper growth and when they dominate the market it seems that it's really difficult to unseat them why is it important to distinguish them and what are some of the common key
(27:43) characteristic about them fundamentally there are two main things that make platform businesses special or very attractive number one it's network effects so inherent in the definition that we gave a platform businesses that they're connecting customers the enabling connections or transactions between
(28:00) customers is the fact that there's a network effect in other words the more participants come onto the platform the more valuable it is because there are more parties to interact with so the more buyers the more buyers come to ebay the more valuable it is for sellers to be on ebay and vice versa same for airbnb same for facebook same
(28:19) for all the platform examples that we've seen so network effects is the main characteristic of platform businesses the other important characteristics which is also inherent to definition because because platforms are not really they're not in the business of providing products or services but rather in the business of enabling
(28:39) transactions their cost structures tend to be very low again think about something like airbnb which just allows people to so allows tourists or travellers to find and book stays with third-party hosts so compare airbnb's cost structure with the cost structure of a hotel chain like hilton well hilton all owns all the
(29:03) hotels right so yeah sure they have a lot of hotels and there's lots of variety but at a much higher cost right airbnb is infinitely more scalable because they don't have to own any of the inventory and we can run all the same comparison for all platform businesses so I would say the combination of
(29:21) network effects with very low cost structures is what really makes platform businesses very desirable both for entrepreneurs who want to build them and also for investors like us who would like to you know like to figure out what the next airbnb or the next ebay is we can invest in a platform business you are
(29:38) in the business of you know creating and managing network effects because if you're connecting customers the more customers you get the more you know possible connections those customers can have the more value they get from those potential interactions right so in all these businesses you tend to see
(29:56) network effects and network effects provide defensibility for these businesses so one of the reasons why you don't see a lot of copycat youtube competitors is because you know people will go to youtube to discover all this content right that's been produced and for another competitor to compete with that they have to
(30:16) somehow get a huge amount of supply and you know they're not going to be able to get a huge amount of supply content created unless they have a lot of demand but you know people are not going to come there there's no content so they're kind of stuck right with this chicken and egg problem which youtube has solved and has you
(30:31) know lots of supply and lots of demand so the network effects provide defensibility and can explain why something like youtube is you know is going to be around for a long time we would think and on one thing that can be important as well given the nature of the platform business model which is you know
(30:50) enabling these customers you know to interact and so on is you do tend to get quite a lot of value that's created at the edges right from the customers themselves so if you think about facebook you know it enabled people to connect together and share stuff but then you get all this creativity like from those creators from those
(31:09) customers that is you know that is what the network effect is you know the more people on there more values created but sometimes that network effect is sort of super powerful because the customs themselves create a whole lot of content that creates value for the other side so youtube is a good example
(31:25) where you know it's there's a lot of value created it's not just like that I hooked up people and people creating videos but actually all the value created from those producers on youtube who created all this interesting content right and you see that in a lot of these platforms like not so much in sort of the business
(31:43) type platforms or like in something like ebay but more in their sort of content or creative platforms like youtube where you you can get a lot of in twitter of course you get a lot of creative stuff happening that's all it's all created from the customers so yeah it really leverages that ability to
(32:06) create value from your users rather than yourself so that's sort of user-generated content I would say is sort of a third aspect that plays a role in platforms the implication of that is that platform businesses are much more like scale a lot faster in some sense like they reach escape velocity a lot faster than most other businesses
(32:23) like it's I think it's a non-controversial statement to say that platform businesses are probably the best business model to build or to invest in for these reasons for example with netflix they really curate the kind of content that needs to be on the platform and then they actually either now own the last mile which is going
(32:42) vertical in the original creating original content or actually have to get the rights for those content and to own them so they have to curate and decide what the user want to see I think with the whole user-generated content is that it allows the agility where you know whatever user is seeing on the grassroot level that they think
(33:00) is going to be of interest to other people there's a much more you know sense of allowing that creative creativity or hitting the right you know trend you know when it's happening and that allows the really immediate engagement on both sides without the centralised control of deciding what people want to watch that makes it you
(33:19) know really interesting well not to put too fine a point on that but I think it's important to realise that even in that case right so even like something like youtube I mean youtube does so it is true that they allow a lot of creativity you know without a million flowers bloom and so on and so forth
(33:34) but you know platform like most platforms do have some curation or some controls right I mean it makes sense you don't want to allow quite everything and certainly there's you know there are some things that you don't want yeah you're talking about governance in a sense and making sure that the trust and the quality control
(33:52) is there but in terms of you know what could come out and born out of the platform itself in terms of content creativity is an interesting one because in Australia there's a company called redbubble.com it has been around for quite some time but it's one of the global company that's really interesting because they
(34:12) allow artists generated content to be produced into product as on demand right so that's actually really interesting yeah it's allowing that interaction again between the producers you know allowing them the freedom to put up their you know within certain balance what they want and then the sort of feedback from the
(34:31) customer side right and that interaction between the feedback and the producers can create all kinds of things that the intermediary would have no hope of creating or dreaming up right and and even if you think about business platforms like amazon right whereas you know you don't have quite so much
(34:49) creativity but there's still a lot of products there that amazon wouldn't have dreamt of you know oh should I stock this product or should I produce this product you have to leave it to the imagination of the these third parties what they can produce what they can sell and what consumers will want you know
(35:04) what the feedback will be so I think that sort of openness let's say of the platform is another important dimension if we compare it to a linear business model where the intermediary is deciding and controlling everything here you're sort of open to a certain extent I have a great I have a great example of this I think my
(35:25) favourite example of creativity that can only happen on platforms have you guys heard of an app the greatest app on the iphone it's called I am rich you can look it up so it basically it was first created so it is funny story so it was first created by in the first few months when the app store was open in 2000
(35:45) 2008 so it's an app that places a red ruby on your phone screen and that's it it's five lines of code and that app was sold for like 999 dollars like maximum price on the on the allowed on the app store and of course I mean again this is like great creativity I thought it was amazing but of course apple
(36:04) because they're control freaks took it out so after a few months they decided this is for whatever reason they took it out so interestingly today of course you can find many different versions of I am rich on android which is partly why drool and I own android phones and you cannot find it you cannot find
(36:20) such a creative app an amazing app on the iphone so other than network effects and good margins and possibly some of them are a winner take all type of companies is there anything else that are key characteristic about either a platform businesses or building one but in terms of building one the chicken and egg problem is an
(36:42) obvious characteristic of building a platform business right because if you want to you know if given the network effect if you want to create value you have to have users on the other side that people want to interact with about how do you get sellers if you don't have any buyers and how do you get
(36:57) buyers if you don't have any sellers so this is a perennial problem for building any platform business yes we painted and we strongly believe that platforms when successful are the most attractive businesses to build or invest in but there is a trade-off they're also the hardest ones right so the success rate of platforms is
(37:14) probably much lower than traditional plot than traditional product businesses and a big part of the reason is exactly what Julian just described most platforms cannot even you know they can't get past the chicken and egg problem so what makes network effects very valuable once you know once the wheel starts
(37:31) turning is also what makes them very difficult to start like the engine like it's very very difficult initially because you need you know you need actually people on one side or whatever the relevant sides are to be present wouldn't that sort of have an impact really on the possibility of them really generating revenue
(37:49) you know early days it's almost as if they really need a lot of money and funding to actually get it going number one they need critical mass before they could make money in some ways and a lot of times they need so much volume in order to actually make any kind of business that is you know that is you know sustainable
(38:09) on their own so that is that's probably one of the key challenges that I see as well it's that's definitely right they need it it's very challenging they need resources up front but there are a lot of hacks to get going and you know probably the most important of which is don't spread yourself too thin right
(38:28) like focus on a very narrow scope maybe geographic scope if you're like uber starting off right start in one location and you know and try and build that flywheel at a very local level very small level and and thereby you limit the amount of resources that you require to start and from that you can then expand out
(38:51) right so I mean there are many many different ways to solve the chicken and egg problem but it can be solved and obviously it can be because we see so many successful platform businesses but it is yes not easy does require resources does require convincing investors up front that this can work but yeah it can be sold there are other
(39:11) issues like an important issue with two-sided or multi-sided platform businesses is they have to decide on their price structure how much they charge you know to each of their different customer groups which is somewhat of a unique challenge to these businesses in the sense that can actually
(39:29) play a very critical role like if you for some businesses if they start charging both buyer and seller they just cannot get going because you know they can't get the buyers or the sellers and other businesses other cases you know you just want to charge one side give it away for free on the other and you get
(39:47) all the you know makes it easier to get going so it's more related to solving the chicken and egg problem is there anything in terms of how they compete differently as well do you have any point to add to that one general observation is that firms will compete more aggressively up front like it's because the gains from winning
(40:02) are so much higher you tend to see very intense competition in early days willing to you know burn through a lot of investor dollars to give away products to build up critical mass to you know to become the dominant network and then later on once they've established themselves you know you tend to see prices increase and
(40:22) softening of competition so that's sort of a general dynamic you might see in these types of businesses with network effects yeah I think so the complete difference I think one of the key thing is also because it's a it's more or less a winner take all thing there's no such thing as creating into a you're
(40:36) niching into a you know a position of one market kind of thing it's almost as if it's like you have to compete and take all and go towards and drive towards that and grow very fast to own the market yeah I would say that people I mean the companies certainly act like that it's not always true that it's a
(40:56) winner takes all they certainly seem to investors and companies seem to behave like that sometimes so you know uber and lyft in the early days they were acting as if in terms of the amount of money they were burning through like they were going to one of them was going to win and they were going to take the whole
(41:10) market it's going to be hugely profitable for them but that's not always the case right that's always how it turns out right I mean I think the idea was like uber was going to be there was going to be one dominant global player and that would be uber which obviously did not turn out to be true and there are many
(41:23) other I think that's a very important point so there are many examples of platforms which became somewhat successful but certainly not as successful as their initial investors what they were you know they were thinking would be so there's lots of I mean there's a thing you're right I mean in in the most successful examples of
(41:40) platforms tend to be either monopolies or duopolies that's true but there are many others that end up you know maybe not as competitive as regular product markets but you know you do see like quite a few platforms active in the same market so either each of them you know different platforms dominating different
(41:59) geographies or different different platforms dominating different verticals yeah which is would be interesting to know you know why some of them are actually really we need to take off as a monopoly and why some of them are actually a duopoly or more you know as you go into other location
(42:16) so what is what are some of the things about platform businesses that define conventional thinking rules business practices and therefore what does it mean you know for the different stakeholders again platform businesses are very very attractive both for entrepreneurs and for investors and end up commanding very high
(42:34) valuations again for very good reasons once if they're successful they tend to be very very successful so much more successful much more valuable because of network effects and low cost structures than traditional businesses again not all of them a lot of so it's very difficult to build successful platform businesses and not
(42:52) all platform businesses are like facebook or like airbnb some of them are you know much smaller but on average it's better to take the investor point of view it's much better to invest in all other things equal in the platform businesses than non-platform business failure rate of these platform businesses
(43:11) is very high you know most of them do not get past the chicken in their stage of solving that problem they just don't get enough liquidity and without much liquidity they're not not offering much value and people stop using them and they just can't get past that first stage or you know maybe they do
(43:26) but there's another firm they're competing with which is being much more successful and everyone flocks to them and so they you know end up unable to compete you know if you think about facebook and the different social media companies that have tried to compete with it right over the years and some
(43:43) which were earlier and some which came later you know they you know had some measure of success but they ultimately couldn't compete they didn't have enough mass of of users who were really engaged in the in their product there are some unique challenges that platform face so again chicken and egg problem I would
(44:05) say is disproportionately probably the highest cause of mortality for platform businesses is the earliest one but there are others so there's for example another very important issue that some platforms face is leakage so this is the issue where again platforms try to connect so enable customers to
(44:27) to connect or to transact one another and hopefully charge some fees for those transactions well in some cases it proves actually difficult to keep the transactions on the platform so leakage occurs when the platform allows the very the relevant parties to meet on the platform then they take their transactions off
(44:45) the platform and therefore the platform does not make its commissions so this can be a more or less of a serious problem depending on what the product or the service is but let's say a platform that enables I don't know enables families to find clean people to clean their house well typically they want to find
(45:06) one good cleaner or so yeah a good cleaner and then have a repeated repeated business transactions with the same person but once you meet on the platform it's very difficult to see what the platform can do to maintain the transactions on the platform and I mean there is I think there's an example Julian well there was an example of a
(45:25) company that failed like in some time 2015 I think that was enjoy yeah home joy yeah which yes it was one of the early platform marketplaces for cleaning services and this is one of the main reasons they failed on an extreme end you had deaths on the road which is what I was talking about
(45:46) with regards to uber delivery or delivery drivers actually you know like five of them that just died you know in Australia in within three months you have then obviously the whole dating app you know of being a predator you know playground and then you have counterfeit home being trash you know on
(46:06) airbnb and then you have basically inventory or tef or counterfeit groups you know on ebay or alibaba how are these unique challenges that this platform faces right changing some of the rules that's beyond business and also really changing our lives well obviously in many many ways but you know it does in a way boil down to
(46:27) this control issue right that as Andrei said these platforms because of their business model they want to enable these organic interactions between their customers at the same time those interactions can be can lead to conflicts right they can least they can lead to liability problems
(46:50) they can cause people to be offensive to other people as in the case of you know social media or in the case of airbnb that can lead to you know hosts or guests doing things that have consequences for neighbours for third parties in craigslist case they led to you know many murders there are many
(47:10) murders that have been linked to craigslist so there are you know bad outcomes that arise when you give this much control to you know to a whole bunch of people basically and that's inevitable and then the platforms the question that they have to face is how much do they reign in that those
(47:30) actions how much do they exercise the control that pushes them back more towards the linear business model away from their platform extreme and that is something they may not like from a business point of view because it incurs a lot more costs but it becomes necessary because of you know public relations because of the
(47:49) externalities on the community on others that they have to do something about you know all these actions that happen that affect others they can't just be completely signed the example of the firm that's completely hands off would be craigslist right they just don't do anything about it they're murderous but they're not
(48:07) responsible because they just don't get involved at all and that approach is not sustainable on something like facebook because facebook has chosen already to exercise some control it's chosen to ban certain material once it makes that decision it has got itself in the position where it's starting to control things
(48:28) then people will help hold it responsible for when things go wrong and that becomes a slippery slope in which it you know ends up having to have more and more control over all these matters yeah so if I can I mean I think this is a very important and very interesting topic like the way sometimes I joke with students i
(48:46) say the ideal platform business model is like full control and zero responsibility it's like the opposite was spider-man you know with you know with great power comes great responsibility I want lots of power no responsibility but obviously that's not possible right it's not possible like in a business
(49:03) sense like from like there's laws of physics that have to apply so you can't for example I can't have a marketplace for products in which I exert all the control over the merchandise but I have no responsibility for inventory it's just not going to work right I mean if you want control you have to bear
(49:20) inventory across where there's that aspect and then there's the aspect that's very important that Julian talked about which is the issue of externalities on the rest of society right so as a society we may not want platforms to be completely irresponsible and to say ah we're just you know we're just
(49:35) completely hands off we're we're enabling interactions and those interactions have some spillovers outside the platform but because we're platform we don't want to do anything about it so obviously this is all the there's a lot of talk these days about regulating large platforms and I mean we probably drew and I
(49:53) probably don't agree with all the regulatory proposals but at a high level it does make sense to try to you know to try to get these platforms to accept a little bit of more responsibility than maybe they would naturally be inclined to take I mean whether it comes through regulation or public pressure I
(50:13) mean either way they they they're sort of forced to do that right they can't be completely hands off because even if regulators didn't step in the public outcry when there's some murder or there's some you know discrimination or some you know there's different very different opinions and there's hate
(50:32) speech and so on between different groups then they're sort of forced to take the position you know the public pressure will force them to take a position and to do something about it and that's where they have to make decisions right they have to decide how much they want to control or not a lot of that is basically path
(50:48) dependent is the consequence of how they behaved previously right in an alternative universe in which say facebook basically acted from the very beginning like craigslist so like did not if in supposed initial from the beginning facebook like their feed was just chronological like or reverse chronological
(51:09) there's no interference by facebook they're not trying to recommend you stuff that will get you addicted and click more they just didn't get into it you just see whatever people in your neighbourhood your friends post and reverse chronological order no interference from facebook now obviously it doesn't really make
(51:24) sense from a business standpoint but if they had done that I think like it would be it would be a lot less likely for people to calling for them to be responsible for the content that goes on because then they can credibly say we really do not interfere but as Julian mentioned I think the issue is like the moment you try to
(51:40) interfere and actually have some influence over the interaction so in this case the social interactions you do have to accept some responsibility for what goes on again you can't have a lot of power without without some responsibility and I would say it's unavoidable right because if you do what Andrei described you're completely
(51:59) hands off in just the reverse chronological order of whatever people post people will post stuff that the rest of the community cannot accept right and there'll be pressure on you to do something about it you know someone posts a video of a terrorist act you know of course there'll be illegal stuff that's posted but even
(52:14) legal stuff that you know a lot of the community doesn't accept but some minority does you know they'll it'll become unavoidable that they have to take some position on it now there is a well we probably want to get into it there's an interesting alternative emerging to this which is relying on blockchain enable mechanisms
(52:34) so rather than having a centralised authority like a platform make all these decisions and you'll take responsibility and figure out what's acceptable it's not acceptable there are many companies so some who are competing with so large social networks but basically their competitors so blockchain naval competitors to all
(52:51) the big centralised platforms that we have today and the premise is they can create this kind of governance mechanisms that are fully decentralised and they're basically like the community can vote and you know everything reflects what the community wants but there's not some arbitrary decision by the platform
(53:09) made on how to govern the platforms okay so it's like a completely decentralised government governance basically yeah I mean that would be something against looking to the future it's certainly something that we see in some of the through our angel investing activities
(53:31) there's a lot of there's a number of very interesting initiatives trying to leverage this kind of decentralised governance structures to build the next generation of platforms I mean I would argue that wikipedia is kind of a very successful example of somewhat decentralised governance right and
(53:52) I don't see too many problems like people complaining wikipedia has caused bad outcomes right it seems like it works pretty well bad definitions and bad news that's what it is bad definition that would be the only consequence of you know a bad contributor for wikimedia wouldn't that be what you see as at
(54:12) least from the goods perspective I've experienced at least ebay you know really interfering and making sure that I have a good experience and having insurance coverage you know in to ensure that you know I have the right goods at the end of the day so airbnb has also stepped up in terms of having insurance you know
(54:32) for the homes what are some of the things that you see these platforms are doing to step up in terms of their accountability or responsibility for the people under their orchestration but not fully under their care that could possibly also impossibly increase their cost of operation so some of the examples you just
(54:53) mentioned so I mean depending on what the platform is and what the interactions are being enabled so if for example if it's commercial transactions obviously it makes sense to offer insurance to have for example escrow basically anything that limits the opportunity for one party to take advantage of another party
(55:11) now once you get so I would say in some sense for commercial transactions at least conceptually is much more straightforward to figure out what you need to do right like the various again escrow insurance all kinds of things like that this gets really tricky with social platforms because it's not a business
(55:29) transaction so then you get into things like you need to figure out what type of communication what type of what that let's take social platforms like what kind of speech is acceptable or it's not acceptable and honestly I don't I mean I i don't think any of these platforms has really satisfactorily like found the way that
(55:48) really works they're all doing some combination of 100 page long community guidelines that no one reads and you know they all claim to have like thousands of people like moderate human moderators that basically look at the content and then they provided guidelines and they have to decide what is
(56:07) what is okay and what's crossed the you know the inappropriate line I don't so obviously none of these things is very scalable and it's not just not scalable it's also not very consistent I mean again part of the problem is you can't enforce these policies in a very consistent way that will satisfy
(56:24) all of your users I think one thing that you see sort of across many of these platforms that they are using to try and solve these problems is more ai so you know if it's amazon worrying about fake reviews or you know counterfeit goods on ebay or alibaba and so on or even facebook trying to find
(56:48) pornography you know that's hidden in the in the social platforms you know they can certainly make use of big data and ai to try and detect and those problems and root them out so that's something that I just see them using more and more as a way to do it in a scalable way but it you know as Andrei said it's certainly
(57:11) not going to be perfect and in the end this ai is based on some algorithms and those algorithms have you know some human has put in criteria and objectives and those may not or I mean in the case of commerce it's quite maybe quite clear we want to get rid of all the fake goods so we want to get rid of the fake
(57:27) reviews but in the case of social media like deciding what is right and what is wrong is you know you don't really want one person like you know the ceo of the company making that decision right yeah so so that becomes a lot more controversial anyway yeah I'm seeing more like all this digital and technology company are
(57:46) sort of needing to move backwards into what the linear companies and traditional companies are really good at doing which is the brick and mortar world and the human connection says beyond the digital you know company that they actually need to build up and therefore possibly increasing their cost of
(58:02) operation and maybe reducing those margins but I mean a lot of these problems we've been talking about are not I mean they don't affect all kinds of platforms right like if you took a typical b2b platform you know that does metal exchange or something they don't have to deal with most of these issues I mean
(58:19) they're all their customers are big customers they're businesses you know they're not even dealing with the types of things airbnb has to deal with you know with you know bad host or bad guest so it's not necessarily a problem for all types of platforms but yeah it certainly is for some I think the more interesting
(58:37) or more difficult questions even beyond these is you know the externalities that go outside of the platform because obviously the platforms have an interest in making sure their own platforms working well and that the users are getting a lot of value from it which means cleaning up all the things
(58:53) like fake reviews and fake goods and so on but what about the externalities that go outside of the platform that hurt users who don't use the platform they're their interests are not necessarily aligned can we talk a little bit about this whole gig economy and therefore independent workers because a lot of these platforms
(59:11) and more and more are using that model and driving a lot of people to actually use it you know because of the gig economy but at the same time it is causing all this problem obviously tax implication how do you tax the revenue and they are not fully employed the responsibility the training and therefore the liability and all that
(59:29) and more and more platform are actually using this model and they actually don't need to employ these people and therefore be responsible and actually have the full cost of it because that goes back to the margins benefit that they have in the beginning they're right control costs trade off their Andrei mentioned
(59:49) right if they keep them independent contractors then they you know they don't have control over what they do but they have much lower costs right and that is that may be an attractive option for most of these platforms that they're okay for most of these I mean maybe not home cleaning but for driving for instance that they
(1:00:09) don't need to control you know what car they exact exactly what car they drive what times they drive and so on so they're willing to give up the control in order to have these independent contractors it makes business sense the problem is that you know from a point of view of labour law that they do want to control
(1:00:28) their price and they do want to limit how often they can reject rights and so they want to exercise some control and once they start exercising some control there's a question are these really independent contractors or are these more like employees and once they get defined as employees then the firms are responsible for
(1:00:46) all kinds of other benefits that they have to provide to them and and so that regulatory framework or of labour law as an additional twist to the normal control cost trade-off because once they start taking a bit more control over them they actually suddenly have to pay a lot more costs because they get
(1:01:07) labelled as employees I mean this is where platform meet outdated regulator framework so this goes back to the point we made initially platform businesses exists along the continuum between pure platform and something else like employer or retailer well the current regulatory framework for determining employees versus
(1:01:27) independent contractors is just not suited for you know distinguishing between these different business models and it's actually like problematic it's actually like forcing firms to choose either hands-off pure independent contractors no training nothing just because they don't want to get a risk for their
(1:01:47) drivers or whatever have you be classified as employees or they have to decide okay we're just going to employ them which is obviously much higher cost than that they're no longer platform businesses so Julian and I have written about this I mean we've made the point that I think would be good to update the regulatory framework
(1:02:02) in order to allow you know a broader more fine-grained spectrum of choices for these for these platform businesses along the along the continuum that we talked about earlier in terms of control opinion is more about actually updating the regular framework to reflect this new way of operating instead of thinking
(1:02:21) instead of thinking maybe if this model is actually a sustainable one you know from that perspective I mean it could be a matter of having some new categories right in the middle that allow in the case that you are exercising some control then you need to provide certain benefits right but you don't have to
(1:02:42) provide the full suite of benefits that would be applicable if someone was your full-time employee right because that's a very different kind of relationship if someone's my full-time employee they have no choice they can't go and work for competitors if someone drives for uber they can also drive for lyft
(1:02:58) right I'm allowing them that flexibility so I shouldn't have to provide them all the benefits of a full-time employee but I might need to provide them certain benefits that are proportional to the time that they're spending on my platform yeah and that would be more reasonable and I think that would benefit all parties it
(1:03:14) would definitely benefit the workers who benefit the platforms because again they can you know they can opt for this intermediate and more reasonable category as opposed to again having to choose between the two extremes which seems very outdated if you think about the home joy example of home
(1:03:29) cleaning you know one of the reasons they failed is exactly this that you know they couldn't provide the training for their home cleaners to bring them up to a certain standard because if they did that then their home cleaners would be classified as employees and then they would have to provide them with all the full benefits
(1:03:49) of full-time employees which was not sustainable for them and so you know this outdated regulatory framework sort of forced them into this position where they couldn't provide the optimal level of control and benefits and therefore you know actually forced to close down I mean that's one of the contributing factors
(1:04:11) there were others of course so as an investor what advice would you give to investors looking to invest in general or particularly in platform startup oh I have some important advice do not invest yeah do not invest in any platform businesses so that Andrei and I can can be the only investors in this
(1:04:29) space right but if you do decide to compete with us here are all our tips on how yeah so a few things I mean I think based on what we talked about I think it's very important and you know as silly as it may sound drilling down into all the claims of platform businesses and truly asking them like making
(1:04:53) sure that you know if the company claims their platform or platform business are they really a platform business do they really have the network effects they claim a lot of companies would would like kind of short-circuit that and say we're platform business network effects therefore we're worth whatever 200 million dollars series a
(1:05:10) please invest so a lot of these like it's very short-circuited and it relies on very superficial thinking so what drew and I like doing that we think that's the right way to go about it is like let's just be very clear what why is it a platform business what are the network effects how strong are those network
(1:05:28) effects okay like let's dive a little bit deeper do you really expect those network effects will last I mean do you think they'll be easy to imitate by someone else how much multi-homing do you think there is on both sides if it's a marketplace so I think taking time to drilling deeply into actually a lot of the
(1:05:48) factors that we talked about and you know in the previous questions is very especially with platform business I think is very important we we have a list of questions some of them are sort of going deep into the network effects so you know is it a local or a global network effect is there a long tail of you know
(1:06:09) suppliers or is it you know a fairly thick type of market so there's a whole list of these and these kind of get to how how defensible is the business going to be if they manage to solve the chicken and egg problem and and get to the point where they enjoy these network effects you know another type of question we ask is
(1:06:31) like so how much you think about transaction platforms right are the transactions a large number of small transactions a small number of large transactions a large number of large transactions or a small number of small transactions obviously we hate the ones that are a small number of small transactions right
(1:06:50) we don't want to invest in a marketplace for locksmiths you know which you know there's going to be one transaction a year or probably less than that right how often do you get locked out of your house one track one transaction a decade per person right it's just twenty dollars for forty dollars right and it just
(1:07:06) doesn't make sense to build a marketplace around those types of businesses so you can have businesses like uber and lyft where you have relatively small transactions but you have lots and lots of them all the time so very frequent or you can have platforms built around you know housing transactions or
(1:07:24) employment transactions these are very large transactions not very frequent but at least you have to have a big enough scale in the marketplace to make it work I would add that I would want to know how what is the strategy in terms of reaching critical mass or solving the chicken and eggplant that's only one question I will ask such
(1:07:41) an investor because it's so hard to get there you know what I mean that would lead us to get the chicken first the answer is always get the chicken first I'm for the to I egg again we go into a lot of depth into the questions that we ask about platform businesses in our sub stack so platformchronicles.substack.com
(1:08:05) that's exactly how we think about platform businesses and we hope they'll be helpful for both entrepreneurs and investors what are some of the bad ideas that you have seen in the in terms of business platform startup that you have come across as investors this one called sniff spot and sniff spot is
(1:08:24) designed for dogs so you can take your dog to someone else's yard so that they have space where they can run around without having to run into other dogs right so these are particularly for anti-social docks although I think you know if you don't have a park nearby where you can take your dog and mini parks probably
(1:08:45) ban dogs right then this could be certainly an option so you know when we're thinking about this as a marketplace like you know it sounds a little bit like it's a fairly small niche product you know how many people have anti-social dogs but we're also thinking you know who has yards that they want you know other
(1:09:06) people's dogs running around in right well those people who have big yards are probably people who are reasonably wealthy and do they really want to sell their yards for five dollars an hour to have someone else's dogs running around it just didn't seem like a very good match in terms of you know matching the
(1:09:23) demand and supply you know the people who have the supply are not the types of people who would tend to want to rent out that space that was our thinking right well you know from what we can see from looking at the website seems to be quite a lot of supply you know it's across the US at this stage as far as I can see
(1:09:48) and in most cities there's you know there's 40 or 50 spots where you could take your dog whether that's critical mass I don't know because you know how far are you willing to drive to bring your dog to one of someone else's yard but it certainly seems to be still up and going most of the people who own stock they
(1:10:08) have to make sure they get a dog out every day so that's huge amount of frequency for you oh well you know speaking of which we would worry a little bit about leakage in those cases right because once that once the owner takes their dog to someone else's place a few times he lives around the around the corner then they don't really
(1:10:27) need sniff spot as a platform right they can just go direct so that was another concern that you know you think about this as a marketplace but you know it always surprises us like we have lots we looked at lots of you know weird and wonderful ideas for marketplaces and some of them work and some of them
(1:10:45) don't and it's pretty hard to predict just based on the idea sorry I can I can give a few a couple other examples which are again very amusing but I think joel and I have learned to you know like it's fun to like poke fun at them but who knows maybe there's a unicorn among these so one of my favourite is
(1:11:02) naturist bnb so it's basically airbnb that provides access to accommodations which I think are naturalist friendly i.e friendly to people that want to be naked all the time if I'm not mistaken I mean you can go to naturalsbmb.com to figure out exactly then there was one in japan which I can't remember what the name was but
(1:11:22) it's basically like it was summarised in a vice article called human uber and basically you can you can essentially pay someone to go to events that you don't want to go to and then they're wearing some sort of ipad that projects your face that basically says I care just enough to hire someone to come to your events but not enough
(1:11:42) that I wanted to make the trip so like some someone else basically shows up in my place I'm not sure about the human uber it sounds like a human avatar to me actually yeah something like yeah something like that yeah something like that I like the tagline human uber is like let someone else live your life for you so you don't so you
(1:12:01) don't have to so and then you have another one which is uber for horses is that right is that real yes it is that is right and when I say uber for horses I always have to clarify that the forces in this uber are the passenger they're not the driver so this is in case you have a horse if I
(1:12:21) understand correctly in case you like have you have you ever had this problem where you had to take your horse and drive it to like the next town and did not have an appropriate vehicle it finds someone that basically has a vehicle which can accommodate horses and help you transport your force to the
(1:12:37) nearby town there is a startup recently that I've met that is in Australia they are big into horses so what they do is a marketplace for horses actually to buy and sell and to own a horse but not not transportation of course not transportation of course actually but I think we've come to the conclusion that
(1:12:56) there's a marketplace for everything right yeah I mean they're just someone has whatever you can imagine someone has built it somewhere someone at least has put up a website please comment on the video actually if you have interest come across really interesting actually platform businesses and marketplace
(1:13:14) that you know we should know about I hope we have clarified what platform businesses are and in our next video we want to talk about how you can move from a product company to a platform business if you are a product company in linear business and you want to become a platform businesses we're going to talk more in
(1:13:31) detail about how you can do that and we can make a promise you know give us your product or service we'll turn it into a platform in 30 seconds or less or your money okay I'm gonna put that in the video I didn't make the promise not me