Of markets and conversations and platforms and shopping malls

Tara Hunt, while commenting on a recent post of mine, reminded me that I needed to revisit Invisible Engines; I’d received the book while recuperating from my heart attack, found it an excellent read, but for some reason never got to pass 2. Big mistake, but corrected now thanks to Tara’s timely reminder. Thanks, Tara!

[An aside. I tend to read management and technology books on a three-pass basis. First pass is a quick skim, taking no notes, just absorbing the feel of the book. If I find one compelling idea in it, the book makes it to pass 2, where I read more slowly, skip entire chapters along the way, but make notes. If I find I make more than three notes, I read the entire book even more slowly, in pass 3. Maybe 1 in 200 such books make pass 3. The Social Life of Information, The Cluetrain Manifesto, Emergence, Community Building on the Web and Smart Mobs are examples of Pass 3 books.]

I quote from the blurb:

Software platforms are the invisible engines that have created, touched, or transformed nearly every major industry for the past quarter century. They power everything from mobile phones and automobile navigation systems to search engines and web portals. They have been the source of enormous value to consumers and helped some entrepreneurs build great fortunes. And they are likely to drive change that will dwarf the business and technology revolution we have seen to this point.

The material in the book is not new per se, but the adjacence of ideas and their sequencing make it something new, at least to me. The authors know their subject matter, present it well, build a compelling story and thereby entice the reader into flights of fancy. That’s the kind of book I like.

In the serendipity that is typical of the blogosphere, I was reading Doc Searls in his latest Suitwatch, titled Thinking Past Platforms: The Next Challenge for Linux. This, while still poring over Platform Competition in Two-Sided Markets, a paper recommended by the Invisible Engines authors. [Thanks, guys!]

And all this reading led me to the following statements, paraphrasing and summarising the bits and pieces I’ve mentioned earlier in this post. Apologies to all concerned if I have misrepresented or misconstrued:

• 1. A software platform is a place. A marketplace.
• 2. This marketplace is multi-sided and can be open or closed; the more open it is, the more “sides” it has.
• 3. Conversations happen between these sides: consumers, software developers, hardware providers, whatever.
• 4. Marketplace participants obtain value from the marketplace provider by sharing services they would otherwise not be able to afford.
• 5. There is an implied long tail in the shared services model, no single participant consumes any significant proportion of the shared services.
• 6. As a result, while the “infrastructure” provided by the marketplace is commoditised, it is used in many diverse ways by the participants, allowing competitors to differentiate themselves, usually on presentation, simplicity, convenience, access and complementarity.
• 7. A marketplace often consists of a series of smaller marketplaces, often overlapping partially.

So far so good. But if you’re like me, you start going into wild tangents at this stage. You start asking questions like:

• Would you go to a marketplace where access depended on the type of car you were driving?
• Would you go to shops that insisted you only wore clothes bought from them?
• Would you build a shop in a marketplace that told you it governed the signage on your shop as well as your employment contracts?
• Would you pay to rent a shop if you were told you had to pay whether the marketplace stayed open or not, whether the lights worked or not, where security was slack and crime was high?

I think the authors of the book have helped me understand something more about what a platform is, and why it is much more of a marketplace than I had imagined previously. For this I am grateful. With that in mind, I realise how much Doc hits the nail on the head:

Linux is the frame construction of computing…….You can make anything with Linux.