Global Nomad

how do platforms succeed? (part 2)

8/27/2020

Actions and behaviors a platform curator must nurture in order to have both producers and consumers extract value from the platform

On the producer side:

Create: make it easy with neat content creation interfaces
Curate: that’s the job of the platform curator!
- Editorial – useful for pattern detection that can be automated and scaled
- Algorithmics – detect good vs. bad activity, based on rules (avoid false positives that would reject good creations)
- Social – leverage distributed and networked nature of platforms, give community tools such as voting, flagging, upvote/downvote and aggregate all of this to sort and rank, and increase discoverability of the best producers (useful as social proof, useful for producers as feedback)

On the consumer side:

Customize — that’s what the platform curator designs
Consume — that’s what consumers. Encourage this with feeds and widgets (presenting the right information at the right time to the right person)

Designing for Producers

Think value, costs, incentives — the value, costs, and incentives that matter to producers: what are the set of actions that make it easy and simple (and fun) for producers to create core value units?

Reduce the friction. Give them access to consumers (without commensurate investment), and tools to make creating very simple. If possible, “break the skill barrier” — make them look good without making them work hard for it. (This is why people pay money to sit in restaurants with candles. Candles make us all look good.)

Build Cumulative Value — value that scales as the producer uses the platform more often, which will increase the repeatability and desirability of interactions.
Reward quality
Mitigate risk into an investment (think Nir Eyal’s Hooked model)
“Scale the country club” — don’t be for everyone! Act like a nightclub bouncer, and encourage the right quality and perceived quality of producers. Any additional friction should signal quality. If you add friction, ask: does it improve quality? Does it signal quality? Does it increase the repeatability of desirable interactions? (Also, is the interaction high value, high risk? In which case, trust is more key than ever.

How to onboard producers

Bait
Friction-free feedback
Kill the time it takes to reach critical mass: find a hotbed of existing activity, where there’s already an overlap of supply and demand
Incentivize
Staging: capture one side at a time
1. For example, OpenTable got restaurants (producers) on board first by providing restaurant management software (bait!) before any customers signed up (Side note: restaurants were highly fragmented tech- laggard inefficient vertical, rings a bell?)
2. By providing management software, could aggregate table inventory, turn it into real-time data on table availability across restaurants…
3. By doing that, OpenTable created (aggregated, accumulated) core value units -- ready to sell through the core interaction
4. Note: you can create fake data to kick start a community: many dating sites have done this (this is called synthetic datasets)

Designing for Consumers

Value, costs, incentives — the value, costs, and incentives that matter to consumers -- what are the set of actions that make it easy and simple (and fun) for consumers to consume core value units?
Curate -- to “separate the award winners from the bathroom singers”, the signal from the noise

Editorial curation -- Useful to discover patterns that can be automated and scaled
Algorithmic curation -- To detect good vs bad behaviors
Social curation -- The best way to scale curation… and the best way to get to trust.
- Up/down-voting
- Rating
- Flagging -- useful signal (it’s a form of value) for producers: motivates them to create

Build cumulative value -- get consumers to invest in small actions and over time use these to improve the customization filters, and increase the value they get from your platform

How to get Producers and Consumers to stick around

Customization: to scale quality, better data, better filters -- In order to Customize, a platforms filters have to work ever better. Ideally, the platform should encourage users to make small actions that increasingly improve the filter, so it’s easier to customize the offer: this way, despite abundance, the platform can still deliver relevance.

The filter should take the core value unit and match it to what a consumer wants based on:

Active intent (example: specific search)
Passive context (example: feeds, suggestions, insights)
Point-in-time information (“what’s going on right now?”)
Cumulative data (“based on your previous actions”, usage behaviors)
Aggregated social data (“other customers like you also liked…”)

Make sure long-term investment gives producers:

greater reputation
more influence

Make consumers stick around:

Improve the filter so the matching is better
Reward them for more engagement
Give them variable rewards (read the book Hooked again!)
Re-activate deactivated users with off-platform notifications
Activate them in the first place
Set future triggers (Read the book Hooked again!)
When onboarding (and when they see the spreadable unit — that’s virality) show benefits

Let me know what you think!
DM me @philippemora on IG and Twitter
My name's phil mora and I blog about the things I love: fitness, hacking work, tech and anything holistic.

Head of Digital Product
thinker, doer, designer, coder, leader

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how do platforms succeed? (part 1)

8/7/2020

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For a platform to succeed, it has to do 3 things: Pull, Facilitate, and Match

On the Supply/Producers side, The Pull: The challenge is to encourage producers to regularly produce core value units, each of which must have the right data so that the system can match that with the relevant customer]

On the Demand/Consumers side, The Match: The challenge is to scale quantity and quality – and to really succeed the platform should facilitate as many aspects of the interaction as possible

Note: Units that cannot be matched do not contribute to activity on the platform, and the platform only has value when it creates value, which is when there is activity.

Consider how Uber facilitates value exchange, creates persistent value and then creates a feedback loop:

Transfer of information (a form of value) from producer to consumer
Transfer of transport-as-a-service (a form of value) from producer to consumer
Transfer of money (a form of value) from consumer to producer
Transfer of rating (a form of value) from consumer to producer, and from producer to consumer

Conclusions

Monetization is dictated by which transfers are captured and tracked by the platform
If your platform owns the end-to-end interaction, you’re more likely to capture the user’s input on quality — and hence scale quality as well as quantity
Interaction ownership is critical to create a sustainable platform business

Rules, Tools, and Trust
To facilitate effectively, at scale, the platform’s curator needs to create a culture where the adequate behaviors happen. This is achieved with Rules, Tools, and Trust.

Rules

Nudge users to compliance and the desired behavior
Create simple pathways for producers/consumers to follow
Use cues, notification, feedback
Core questions:
1. Who do we want to create core value units?
2. Who can create core value units?
3. How can they create core value units?
4. Can we make that simpler, reduce steps?
5. Can they do it passively?
6. What differentiates a high-quality unit from a low-quality unit?

Tools

“Kill the skill barrier” with tools that make anyone look good. (Think Instagram’s filters: making crap photographers look like they have talent since 2010)
Allow for “emergence” — when users develop behaviors you weren’t expecting

Trust

This is quality control.
Have mechanisms that identify, differentiate and encourage good behavior
There are 7 ways to confirm trust online

The 7 Cs of Trust

Confirmed identity
Centralized moderation — in the early days. This will give way to…
Community feedback
Codified behavior — i.e. via implicit rules
Culture — create a good one
Completeness — think of LinkedIn’s progress bar (could you do that for producers/consumers?)
Cover — think of Airbnb’s insurance

The Types of Payments
There are a few ways a consumer can “pay” a producer — that is, offer value:

money
attention
reputation
influence
data

And here are the best ways to capture value on the platform – while noting that the platform should capture value for every interaction:

% — take a discount/commission
Charge one to access the other, for example a listing fee
Charge 3rd party advertising
Charge producer/consumer for premium tools and services, for example a concierge-style service
Charge consumer for access to high quality, curated producers
Charge producer for change to signal high quality

(To be continued)

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how do platforms succeed? (part 2)

how do platforms succeed? (part 1)

Product Builder in Colorado. travel 🚀 work 🌵 weights 🍔 music 💪🏻 rocky mountains, tech and dogs 🐾

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Search the site...

The Big Picture​San-Francisco. Philadelphia. Paris. Denver.

how do platforms succeed? (part 2)

how do platforms succeed? (part 1)

Product Builder in Colorado. travel 🚀 work 🌵 weights 🍔 music 💪🏻 rocky mountains, tech and dogs 🐾

Categories

Archives

The Big Picture
San-Francisco. Philadelphia. Paris. Denver.