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Modern Monopolies: What It Takes to Dominate the 21st Century Economy
What do Google, Snapchat, Tinder, Amazon, and Uber have in common, besides soaring market share? They're platforms - a new business model that has quietly become the only game in town, creating vast fortunes for its founders while dominating everyone's daily life. A platform, by definition, creates value by facilitating an exchange between two or more interdependent groups. So, rather that making things, they simply connect people.
The Internet today is awash in platforms - Facebook is responsible for nearly 25 percent of total Web visits, and the Google platform crash in 2013 took about 40 percent of Internet traffic with it. Representing the ten most trafficked sites in the U.S., platforms are also prominent over the globe; in China, they hold the top eight spots in web traffic rankings.
The advent of mobile computing and its ubiquitous connectivity have forever altered how we interact with each other, melding the digital and physical worlds and blurring distinctions between "offline" and "online." These platform giants are expanding their influence from the digital world to the whole economy. Yet, few people truly grasp the radical structural shifts of the last ten years. In Modern Monopolies, Alex Moazed and Nicholas L. Johnson tell the definitive story of what has changed, what it means for businesses today, and how managers, entrepreneurs, and business owners can adapt and thrive in this new era.
274 pages, Kindle Edition
First published May 31, 2016
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Displaying 1 - 30 of 81 reviews
September 2, 2018
"Modern Monopolies" is a fascinating look at the modern platform, a business model made possible by technology and embodied by companies radically different than any we’ve seen in the past. And while "platform" is surely a buzzword, "Modern Monopolies" argues that the underlying business model is anything but. Though the book is overstuffed with contemporary case studies and has the same consultant-ey tone that plagues the modern business aisle, it’s unusually relevant and surprisingly insightful, and ultimately worth your time.
The authors do a good job explaining what a platform is. One of the most important points made is that a platform is not a product or piece of technology, but "a business model that facilitates the exchange of value between two or more user groups, a consumer and a producer [emphasis mine]." (29) This definition didn’t quite align with my own interpretation of the word, but I’ve embraced it since. This means, for instance, that Amazon’s AWS isn’t a "platform," and perhaps even SalesForce is ruled out, though things do get blurry.
The authors go on to look at how platforms fit in the greater economy. This is probably the most academic part of the book, and it’s also the best. References to Uber and AirBnb abound, but you’ll also read a bit about Hayek and Coase, and while there’s a smattering of bullshit infographics, they’re flanked by some interesting discussions about natural monopolies, marginal costs of production, and network effects.
Some interesting points:
Some interesting point here:
The authors do a good job explaining what a platform is. One of the most important points made is that a platform is not a product or piece of technology, but "a business model that facilitates the exchange of value between two or more user groups, a consumer and a producer [emphasis mine]." (29) This definition didn’t quite align with my own interpretation of the word, but I’ve embraced it since. This means, for instance, that Amazon’s AWS isn’t a "platform," and perhaps even SalesForce is ruled out, though things do get blurry.
The authors go on to look at how platforms fit in the greater economy. This is probably the most academic part of the book, and it’s also the best. References to Uber and AirBnb abound, but you’ll also read a bit about Hayek and Coase, and while there’s a smattering of bullshit infographics, they’re flanked by some interesting discussions about natural monopolies, marginal costs of production, and network effects.
Some interesting points:
In the internet era, most software companies have a zero marginal cost of distribution. But platforms have a zero marginal cost of creation, too (the network handles the production).The second half of the book is dedicated to describing the characteristics of a platform - how to build one, how to grow one, and how not to screw things up. It’s mostly good stuff, though the authors are overly reliant on soon-to-be-irrelevant case studies, and start getting cute with things like "the five steps to expand your network, all of which start with the letter C." It’s less intellectually engaging, but still pretty informative.
Networks are harder to duplicate than "features". This means platform companies are better protected against competitors than traditional software companies.
The bigger a network is, the more valuable it is to be a part of it. This means that platform competition exhibits a "winner takes all" dynamic. A platform company is a "natural monopoly."
This is a very different kind of monopoly than we’re used to, though: "today’s platforms are dominant because users choose them, not because they were able to buy up all available sources of supply." (101) They are "monopolies of the willing." (102)
Platforms monopolies are nonetheless very much subject to competition: "a platform that dominates one industry is still very vulnerable to attack from platforms that have similar user bases." (105) Think of Google moving in on Amazon’s eBook monopoly.
Some interesting point here:
A platform becomes more valuable the bigger it gets, but it’s often not ‘till it’s REALLY fucking big that you can start to monetize: "there’s often little point in building a small platform business." (93) This means picking the right market is key.On the whole, I really enjoyed the "Modern Monopolies," in large part because it’s personally relevant. Working at a Silicon Valley startup targeting finance (one of the sectors "Modern Monopolies" calls out as ripe for platform innovation), I think and talk about this stuff a lot (insert shameless plug for Addepar here). If you can relate, you should absolutely pick this book up. If not, it’s probably still worth a read. The internet has changed the way companies do business, and platforms are here to stay. If you’re at all interested in business or economics, "Modern Monopolies" will give you a new lens through which to view the changing world around you.
You’ll likely need to subsidize network growth before you reach critical mass. Think Uber subsidizing drivers while they wait for riders or Quora creating its own initial content.
The most important part of designing a platform is defining and streamlining a singular "core transaction," the "set of actions consumers and producers must complete in order to exchange value." (112) You need to make it as easy as possible for network participants to exchange value.
Be very deliberate about how you grow your network and who you let in: "once your network has established an identity, reshaping it can be very difficult." (177) Network growth is "path dependent": future growth depends on how you arrived at the present.
June 30, 2016
I highly suspect the stellar reviews for this book to be planted. It was sadly a waste of paper.
April 17, 2018
Torn between 3 and 4 stars. The book made persuasive arguments for what the future holds and I now see opportunities for platform businesses everywhere.
Some notes and quotes:
- The new business model is the platform: a business that connects two or more mutually dependent groups in a way that benefits all sides
- Platforms build ecosystems; products don’t
- Getting the core transaction right is the most important piece of platform design, as the platform will need its users to repeat this process over and over
- In addition to platforms, there are huge opportunities for derivative businesses built around major platforms. As a venture capitalist said- ‘This is a gold rush. You can either mine for gold like Uber or Airbnb, or you can sell the pots, the pans, and the Levin jeans.’
- Remember to look for these three factors when you’re trying to spot platform opportunities: technology that reduces transaction costs and removes gatekeepers, implicit or underserved networks, and large, fragmented sources of supply. One of these factors can be enough to enable the growth of a successful platform business, but the more boxes you can tick off, the better
So it was very interesting and I’m glad I read the book. However, at times I thought it would have been better as an article, and it felt like the authors couldn’t quite decide on their target audience. Certainly the book would be most useful for entrepreneurs looking to build a platform business.
Some notes and quotes:
- The new business model is the platform: a business that connects two or more mutually dependent groups in a way that benefits all sides
- Platforms build ecosystems; products don’t
- Getting the core transaction right is the most important piece of platform design, as the platform will need its users to repeat this process over and over
- In addition to platforms, there are huge opportunities for derivative businesses built around major platforms. As a venture capitalist said- ‘This is a gold rush. You can either mine for gold like Uber or Airbnb, or you can sell the pots, the pans, and the Levin jeans.’
- Remember to look for these three factors when you’re trying to spot platform opportunities: technology that reduces transaction costs and removes gatekeepers, implicit or underserved networks, and large, fragmented sources of supply. One of these factors can be enough to enable the growth of a successful platform business, but the more boxes you can tick off, the better
So it was very interesting and I’m glad I read the book. However, at times I thought it would have been better as an article, and it felt like the authors couldn’t quite decide on their target audience. Certainly the book would be most useful for entrepreneurs looking to build a platform business.
September 24, 2021
I found this one through the “Invest Like the Best” podcast, not really knowing what it would be like. But, I was pleasantly surprised in the end; it was very good. It’s a deep dive into today’s monopolies — just about all of them being platforms — how they rise to power, what makes them successful, what keeps them alive, etc.
The authors do a great job of assessing the competitive landscape and describing how specific companies fall into the “platform” bucket. For example, though we might not realize it at first, Apple, Google, and Amazon all are platforms or have large, platform-based offerings — all of them bring buyers and sellers together on their various websites and apps without necessarily needing to own any inventory. Think: Apple’s App Store, Google’s Play Store, Amazon’s retail operations (though they certainly do hold some inventory).
The power of the platform, as the authors tell us, is all about breaking away from the traditional, linear, and value-add business model and harnessing scale, network effects, and stickiness instead.
Toward the end of the book, the authors also give some tips for spotting new trends and brainstorming ideas for the next hit platform company. I liked how those sections tied the rest of the book together and summed things up nicely.
All in all, it was a fun and exciting read. I think that anyone with a passion for business, finance, or tech would enjoy it.
-Brian Sachetta
Author of “Get Out of Your Head”
The authors do a great job of assessing the competitive landscape and describing how specific companies fall into the “platform” bucket. For example, though we might not realize it at first, Apple, Google, and Amazon all are platforms or have large, platform-based offerings — all of them bring buyers and sellers together on their various websites and apps without necessarily needing to own any inventory. Think: Apple’s App Store, Google’s Play Store, Amazon’s retail operations (though they certainly do hold some inventory).
The power of the platform, as the authors tell us, is all about breaking away from the traditional, linear, and value-add business model and harnessing scale, network effects, and stickiness instead.
Toward the end of the book, the authors also give some tips for spotting new trends and brainstorming ideas for the next hit platform company. I liked how those sections tied the rest of the book together and summed things up nicely.
All in all, it was a fun and exciting read. I think that anyone with a passion for business, finance, or tech would enjoy it.
-Brian Sachetta
Author of “Get Out of Your Head”
June 18, 2016
I didn't know a whole lot (read: anything) about the platform business model before reading this book. But I sure do now. Wow.
The main premise of the book is that platforms are currently the best way to organize companies, and author Moazed spends a lot of time describing how they work. Basically, platforms--like eBay, Amazon, Facebook, iTunes, SnapChat, etc.--move beyond the the linear business model (where products move through suppliers, manufacturers, distributors, and THEN customers) and instead present commerce and information in a more easily accessible way that benefits both buyers and sellers at the same time.
The book talks about how platforms came about, how they make money, how they function, how to deal with common problems that arise when creating and running them, as well as how to spot lucrative platform opportunities. There is also a glossary of terms in the back.
I'll admit that this book was way more dense and detailed than I was expecting. Luckily, the writing flows so well that even I could follow Moazed's explanations and points (and all without getting bored, too). I think it helped that there were lots of real world examples. Ultimately, I ended up learning a lot while reading the book.
ARC provided through Amazon Vine. See more of my reviews at www.BugBugBooks.com.
The main premise of the book is that platforms are currently the best way to organize companies, and author Moazed spends a lot of time describing how they work. Basically, platforms--like eBay, Amazon, Facebook, iTunes, SnapChat, etc.--move beyond the the linear business model (where products move through suppliers, manufacturers, distributors, and THEN customers) and instead present commerce and information in a more easily accessible way that benefits both buyers and sellers at the same time.
The book talks about how platforms came about, how they make money, how they function, how to deal with common problems that arise when creating and running them, as well as how to spot lucrative platform opportunities. There is also a glossary of terms in the back.
I'll admit that this book was way more dense and detailed than I was expecting. Luckily, the writing flows so well that even I could follow Moazed's explanations and points (and all without getting bored, too). I think it helped that there were lots of real world examples. Ultimately, I ended up learning a lot while reading the book.
ARC provided through Amazon Vine. See more of my reviews at www.BugBugBooks.com.
May 28, 2017
If you are interested in platform design and mechanics i would first recommend "Platforms Revolutions", much better structured and addresses the topic from all possible angles. "Modern monopolies" adds a few interesting insights, I think it goes more in depth coparing "Platform businesses" with "Pipeline businesses". I also enjoyed more the aproach regarding Core Interaction / Transaction.
Expect more than 40-50% of the content to be repetitive between these two books (Uber and AirBnB often used as examples)
Expect more than 40-50% of the content to be repetitive between these two books (Uber and AirBnB often used as examples)
June 6, 2021
First things first. I am writing this review quite a while after reading this book. Second and more importantly, it has been quite a while between when this book was written and now. And things have ... changed.
If someone recommended you this book and you got turned off by reading the word "economy" in the title, then please get back. "Modern Monopolies" is for anyone who wants to understand what's really going on with these 21st century companies which are rising left and right out of nowhere and steamrolling the old businesses as we know it. It gives an in-depth overview of what a platform company is, why it may succeed or fail, some success and failure stories and most importantly, where do they differ from the traditional companies we have known over time. The good thing is you may just end up liking it irrespective of how much you already know about the subject.
At times during the course of the book, you may just get the feeling that the author is eulogising the platform business model a bit too much. He tends to try to create an abstract halo around it as if the means to success lies via and only via platforms. But while he does that, he doesn't do that enough to lose a star (in the ratings), in my opinion. Because he also takes us through a very thorough analysis of successes and failures of various platform companies from the past. Say facebook and myspace. (A good example because they belong to the same domain). If I could quote myself: "What seems simple isn't necessarily easy."
Coming back to my first paragraph. the author makes a very interesting point about these modern monopolies while comparing them with the traditional ones. (See it as a comparison between Google and Standard Oil) He says that these modern monopolies are actually good. While some reasons, being technical in nature, are hard to argue against, there are few which might not hold true in 2021. One being that people actually love modern monopolies. That people dont have an issue against companies being giants on their own. Maybe this held true when the book was written but today, with some serious data privacy issues, clashes with governing bodies and sporadic versions of tyranny imposed by these companies in their platforms, it is hard to even entertain the thought of liking the monopolies of today in any imaginable universe possible. But I will repeat myself: Maybe this wasn't really a concern when the book was written.
I would rather see this book as a lesson on "Businesses of 21st Century". And you should too. Try reading it. It might lead you to a paradigm shift.
If someone recommended you this book and you got turned off by reading the word "economy" in the title, then please get back. "Modern Monopolies" is for anyone who wants to understand what's really going on with these 21st century companies which are rising left and right out of nowhere and steamrolling the old businesses as we know it. It gives an in-depth overview of what a platform company is, why it may succeed or fail, some success and failure stories and most importantly, where do they differ from the traditional companies we have known over time. The good thing is you may just end up liking it irrespective of how much you already know about the subject.
At times during the course of the book, you may just get the feeling that the author is eulogising the platform business model a bit too much. He tends to try to create an abstract halo around it as if the means to success lies via and only via platforms. But while he does that, he doesn't do that enough to lose a star (in the ratings), in my opinion. Because he also takes us through a very thorough analysis of successes and failures of various platform companies from the past. Say facebook and myspace. (A good example because they belong to the same domain). If I could quote myself: "What seems simple isn't necessarily easy."
Coming back to my first paragraph. the author makes a very interesting point about these modern monopolies while comparing them with the traditional ones. (See it as a comparison between Google and Standard Oil) He says that these modern monopolies are actually good. While some reasons, being technical in nature, are hard to argue against, there are few which might not hold true in 2021. One being that people actually love modern monopolies. That people dont have an issue against companies being giants on their own. Maybe this held true when the book was written but today, with some serious data privacy issues, clashes with governing bodies and sporadic versions of tyranny imposed by these companies in their platforms, it is hard to even entertain the thought of liking the monopolies of today in any imaginable universe possible. But I will repeat myself: Maybe this wasn't really a concern when the book was written.
I would rather see this book as a lesson on "Businesses of 21st Century". And you should too. Try reading it. It might lead you to a paradigm shift.
July 5, 2016
Do you consider present-day Internet giants such as Amazon, Google and Tinder as a monopoly? If not, maybe you should think again, as these companies are working to become the dominant supplier in their sector, or sectors. Yet in a very short time they have managed to make a very, very definitive mark in the process.
The authors have made a fascinating, powerful book that looks at how these companies have managed to get firmly established in our daily lives, considering how they are positioning themselves for the long-term. There is a good mix of history and present-day business affairs, providing a look at what caused once de facto monopolies or established players to take their eye off the ball and lose their position, as well as giving insight into what seems to be working for today’s giants who may, or may not, have a place in the future.
Things change. The authors are careful to note that technology is not the only driver leading this change, how we interact with each other, companies and the authorities is also continuing to change and this creates an important role for everyone. The method of doing business and its arrangement is often also different, meaning the traditional supplier-customer relationship is not the only option. Platforms and intermediaries are leading the way, providing opportunities as well as risks along the way.
This is a very enjoyable, interesting and powerful book that is capable of making you think, even if the subjects at hand are familiar to you. The book is capable of being very giving to different audiences and once you pick it up it can be very hard to put down again.
The authors have made a fascinating, powerful book that looks at how these companies have managed to get firmly established in our daily lives, considering how they are positioning themselves for the long-term. There is a good mix of history and present-day business affairs, providing a look at what caused once de facto monopolies or established players to take their eye off the ball and lose their position, as well as giving insight into what seems to be working for today’s giants who may, or may not, have a place in the future.
Things change. The authors are careful to note that technology is not the only driver leading this change, how we interact with each other, companies and the authorities is also continuing to change and this creates an important role for everyone. The method of doing business and its arrangement is often also different, meaning the traditional supplier-customer relationship is not the only option. Platforms and intermediaries are leading the way, providing opportunities as well as risks along the way.
This is a very enjoyable, interesting and powerful book that is capable of making you think, even if the subjects at hand are familiar to you. The book is capable of being very giving to different audiences and once you pick it up it can be very hard to put down again.
May 25, 2018
4.25, rounded down. This book was far better than I expected and really, better than it has any business being. It's a debut book from a young CEO and a co-author from his company, and it's pretty transparently aimed at marketing his company, Applico.
With the above out of the way, it's a cogent, accessible, and fundamentally useful exploration of platform companies (think Facebook, Amazon, and Uber) and their role in our economy. The authors create a useful framework for understanding different types of platforms and how/why they are a growing share of our economies, explore some of their core features, explain how platforms best grow and succeed, and have good examples to make these frameworks less hypothetical.
At a few points, this book has some grating language/structure/references to Applico that a more-experienced author (and one less focused on marketing his company) might have avoided. These flaws are minor, however. Overall, this is a really accessible and thoughtful, yet succinct, book that brings order to a complicated topic. Strong recommend if you're interested in platform companies.
With the above out of the way, it's a cogent, accessible, and fundamentally useful exploration of platform companies (think Facebook, Amazon, and Uber) and their role in our economy. The authors create a useful framework for understanding different types of platforms and how/why they are a growing share of our economies, explore some of their core features, explain how platforms best grow and succeed, and have good examples to make these frameworks less hypothetical.
At a few points, this book has some grating language/structure/references to Applico that a more-experienced author (and one less focused on marketing his company) might have avoided. These flaws are minor, however. Overall, this is a really accessible and thoughtful, yet succinct, book that brings order to a complicated topic. Strong recommend if you're interested in platform companies.
March 8, 2018
High score for “overall correctness” since the authors clearly do understand both Platforms and modern businesses. Yet blatantly written mostly to promote their expertise and consulting business...
Interesting stories throughout, though many are already well known, and the authors do indeed wait for clear hindsight to ensure they are correct. Piling on Blackberry or Nokia doesn’t win novelty points. Also, any references to China/Asia are shallow, and only afterthoughts.
While their overall thesis is strongly correct, the authors fall into some false blanket assertions:
1) "Hayak was right”
2) App Development will be a $77B industry in 2017.
3) “Most of these modern monopolies won’t be dominant for long enough for the downside to materialize.” (p107) As an opinion, this predicts that as soon as consumer value is lost, the monopoly will fade. This isn’t true for Apple, Microsoft, or Cable.. or many other modern monopolies.
and others… this isn’t an academic work where rigor is prized over storytelling.
Interesting quotations from less well known Zuckerberg interviews.
Interesting stories throughout, though many are already well known, and the authors do indeed wait for clear hindsight to ensure they are correct. Piling on Blackberry or Nokia doesn’t win novelty points. Also, any references to China/Asia are shallow, and only afterthoughts.
While their overall thesis is strongly correct, the authors fall into some false blanket assertions:
1) "Hayak was right”
2) App Development will be a $77B industry in 2017.
3) “Most of these modern monopolies won’t be dominant for long enough for the downside to materialize.” (p107) As an opinion, this predicts that as soon as consumer value is lost, the monopoly will fade. This isn’t true for Apple, Microsoft, or Cable.. or many other modern monopolies.
and others… this isn’t an academic work where rigor is prized over storytelling.
Interesting quotations from less well known Zuckerberg interviews.
January 30, 2022
Would have probably given 3.5 stars but I don't think there is such an option.
The book discusses platform based companies such as Apple, Google, Amazon, Uber, etc. While the book does a decent job discussing why platforms are different from any previous business model and the role of technology in enabling it, the book doesn't discuss the profitability of these companies and the role of supportive monetary policies in the form of low interest rates and their effect of supporting the losses of these companies for long periods.
While Apple, Google, Amazon and a few others are profitable businesses (some of them being profitable even without their platform business), these are not from the newer cohort of platform businesses formed after 2008-09.
The verdict on the success of these businesses should be reserved till such time these companies show sustainable profits.
The book discusses platform based companies such as Apple, Google, Amazon, Uber, etc. While the book does a decent job discussing why platforms are different from any previous business model and the role of technology in enabling it, the book doesn't discuss the profitability of these companies and the role of supportive monetary policies in the form of low interest rates and their effect of supporting the losses of these companies for long periods.
While Apple, Google, Amazon and a few others are profitable businesses (some of them being profitable even without their platform business), these are not from the newer cohort of platform businesses formed after 2008-09.
The verdict on the success of these businesses should be reserved till such time these companies show sustainable profits.
May 15, 2019
No matter what industry you work in, understanding the "platform" business model and how it has and will continue to affect your business (or your client's business) is critical. The authors do a good job explaining the concept, backing their idea with solid case studies and other research, and effectively demonstrate that this new model will continue to replace the linear "value-chain" business model that dominated the last century and whose legacy still continues to cloud the thinking of many business leaders. Particularly interesting is their explanation of how the various dot.com booms and busts have been driven by the tension between these two models, and what that means for the business cycle going forward. While I understand why the authors likely chose not to address some of the thornier social, legal and regulatory challenges presented by this new model ("Are Uber drivers W-2 employees, or independent contractors?"), I was disappointed they did not at least lay the issues out in some depth. But that is a small criticism and I know these issues are being debated in detail elsewhere. Recommend this as a good starting place for anyone who is providing strategic support to high-level business leadership, Fortune 1000 clients, or advising start-ups and innovators about how to succeed in the new economy.
January 11, 2020
Толковый анализ природы успеха ведущих цифровых платформ. Общие принципы бизнес-модели, подходы к построению сообщества, стратегии продвижения.
November 5, 2016
For most Americans the term monopoly is viewed negatively, but, according to Alex Moazed and Nicholas L. Johnson, CEO and Head of Platform at Applico, a platform application development company, thanks to the Internet, platforms like PayPal, Uber, Google, and Apple are now dominating the marketplace. They are, the authors contend, monopolies that are not so slowly displacing traditional companies in providing a broad range of services and products to consumers in ways that traditionally organized companies can’t match.
Modern Monopolies: What it takes to Dominate the 21st-Century Economy is a history of platform-based entities that details how they have come to exercise monopolistic dominance in the past decade. This book is designed for new entrepreneurs, showing them how to enter and succeed in today’s economy, and for established businesses, with hints on how to make the transition to the platform economy.
Whether you’re running a home-based business or a more traditional concern, this book is filled with useful information to help navigate the turbulent sea of 21st century commerce. In view of the fact that the platform economy is constantly evolving, the authors also include at the end of the book a link to their newsletter, providing updated information, and a glossary of terms used in the book that some readers might find unfamiliar.
This is a highly recommended reference for any level of business.
Modern Monopolies: What it takes to Dominate the 21st-Century Economy is a history of platform-based entities that details how they have come to exercise monopolistic dominance in the past decade. This book is designed for new entrepreneurs, showing them how to enter and succeed in today’s economy, and for established businesses, with hints on how to make the transition to the platform economy.
Whether you’re running a home-based business or a more traditional concern, this book is filled with useful information to help navigate the turbulent sea of 21st century commerce. In view of the fact that the platform economy is constantly evolving, the authors also include at the end of the book a link to their newsletter, providing updated information, and a glossary of terms used in the book that some readers might find unfamiliar.
This is a highly recommended reference for any level of business.
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October 21, 2018دید خوب و کاملی از فلسفه و ساختار پلتفرمهای آنلاین و استراتژی این پلتفرمها بهتون میده و همینطور بعضی از موارد رو به صورت مطالعه موردی بررسی و مقایسه میکنه که جذابه.
July 12, 2017
Exactly what you think it is.
A good book for anyone wanting to think more about (supply or demand side) network effects.
Big idea; platforms are a potentially new form of business domination but like a flower, they'll only be so grand with the right conditions.
A good book for anyone wanting to think more about (supply or demand side) network effects.
Big idea; platforms are a potentially new form of business domination but like a flower, they'll only be so grand with the right conditions.
September 2, 2018
This book is a summary of how tech businesses, in particular platforms have risen to where they are today and what the future holds for new and evolving platforms.
When I say platform, I mean any network typically software and server hosted by nature that connects producers to consumers. Think linkedin (job seekers, employers), facebook (producers to consumers), apple (app developers to app consumers), and Uber (drivers to commuters) to name just a few. The rise of networks have changed the economic landscape. In the 20th century, the companies that controlled the means of production dominated the economy. They were linear in scale as they had to add more production capacity to grow. Platforms on the other hand control the transaction but not the means of production. They make the connection and improve value to both sides by having a larger network. So contrary to production based companies they actually benefit the consumers as they approach monopoly because of the increased liquidity.
Modern monopolies is the story of the rise of these platforms and how they have changed our lives. It also makes some predictions about how this will drive the future as well. Just like many fads and philosophies it does run the danger of proclaiming that a disproportionate share of the economy will be platform based. Just like in biology nothing is 100%, and something currently not understood will be likely to replace it. We just don’t know what yet. I still don’t want to paint the entire economy with the platform brush as we still need the producers at the end of those nodes to provide goods and services. So focus on being a producer and you won’t have to create a network platform to survive.
This book will sound redundant to most people in the software industry, or at least it should. If you are not in that industry then you owe it to yourself to learn how this new paradigm is shaping our world.
When I say platform, I mean any network typically software and server hosted by nature that connects producers to consumers. Think linkedin (job seekers, employers), facebook (producers to consumers), apple (app developers to app consumers), and Uber (drivers to commuters) to name just a few. The rise of networks have changed the economic landscape. In the 20th century, the companies that controlled the means of production dominated the economy. They were linear in scale as they had to add more production capacity to grow. Platforms on the other hand control the transaction but not the means of production. They make the connection and improve value to both sides by having a larger network. So contrary to production based companies they actually benefit the consumers as they approach monopoly because of the increased liquidity.
Modern monopolies is the story of the rise of these platforms and how they have changed our lives. It also makes some predictions about how this will drive the future as well. Just like many fads and philosophies it does run the danger of proclaiming that a disproportionate share of the economy will be platform based. Just like in biology nothing is 100%, and something currently not understood will be likely to replace it. We just don’t know what yet. I still don’t want to paint the entire economy with the platform brush as we still need the producers at the end of those nodes to provide goods and services. So focus on being a producer and you won’t have to create a network platform to survive.
This book will sound redundant to most people in the software industry, or at least it should. If you are not in that industry then you owe it to yourself to learn how this new paradigm is shaping our world.
July 7, 2018
Modern Monopolies takes on the task of explaining the new business model that has taken the world by storm; The Platform business model. The book provides good insight on what it takes for a business to succeed in the 21st-century economy. The book, in my opinion, is broken down into 3 sections. Past, Present, Future. The first couple of chapters look at the past. By analysing past successful businesses that are now just a memory, the author Alex Mozaed explains why and how these companies failed. It then contrasts the failed companies with their competitors that were able to succeed. Essentially the first part draws implications from the failures of the past.
The second part of the book which is the Present looks at the dominant platform business or modern monopolies in depth. These companies are Google, Apple, Facebook, and Amazon. Many key terms are used to distinguish the differences in these platforms. But the book explains what these companies do differently than other companies and how they strongly utilize the platform business model.
The last part which is the Future looks at the future of the platform business, and how to spot the next big thing.
My caveat with this book is that it uses the same examples multiple times making the book at times feel repetitive and redundant. In addition, Alex spends a lot of time in the book promoting his business to the reader which gets quite annoying. The book could have been much shorter then it is, and in my opinion devalues it a little.
All in all the book did provide me with really good new insight on the platform business. My view on these business and businesses in general has changed. I feel that if I wanted to start a platform business or give advice to a person who wants to start one, my analysis would help.
The second part of the book which is the Present looks at the dominant platform business or modern monopolies in depth. These companies are Google, Apple, Facebook, and Amazon. Many key terms are used to distinguish the differences in these platforms. But the book explains what these companies do differently than other companies and how they strongly utilize the platform business model.
The last part which is the Future looks at the future of the platform business, and how to spot the next big thing.
My caveat with this book is that it uses the same examples multiple times making the book at times feel repetitive and redundant. In addition, Alex spends a lot of time in the book promoting his business to the reader which gets quite annoying. The book could have been much shorter then it is, and in my opinion devalues it a little.
All in all the book did provide me with really good new insight on the platform business. My view on these business and businesses in general has changed. I feel that if I wanted to start a platform business or give advice to a person who wants to start one, my analysis would help.
July 22, 2022
This is a must read. It steers the reader through the platform capitalist economic system with detailed examples of what works, what does not, and why. There are many beneficial aspects of this system and for those who hate delayed gratification - here's your fifteen minute chocolate dream or nightmare delivered to your door.
This free lunch has a not so hidden price. Some people refer to this system as surveillance capitalism and since it is absolutely data driven, there is no way to safeguard privacy unless you truly understand what this all means. Your personal data is what makes it work. Check your apps for their privacy policy. Check any and all privacy policies and you will find that 1) the writer is from another planet and English is not just a second language it's not actually used for communication, it's used for obfuscation 2) It was written by a lawyer who lives on Pluto.
I wish us all good luck since freedom is based on being free and having a private life. If your idea of freedom is bossing around Cortana then have at it.
Don't forget how to read a real book. Cheers!
This free lunch has a not so hidden price. Some people refer to this system as surveillance capitalism and since it is absolutely data driven, there is no way to safeguard privacy unless you truly understand what this all means. Your personal data is what makes it work. Check your apps for their privacy policy. Check any and all privacy policies and you will find that 1) the writer is from another planet and English is not just a second language it's not actually used for communication, it's used for obfuscation 2) It was written by a lawyer who lives on Pluto.
I wish us all good luck since freedom is based on being free and having a private life. If your idea of freedom is bossing around Cortana then have at it.
Don't forget how to read a real book. Cheers!
March 3, 2020
The majority of use cases and examples are for business to consumer businesses. Examples used are quite repetitive. The majority were the usual suspects: Facebook, Uber, Apple, WeChat... By nature, there cannot be too many platform businesses to begin with. Using just a few well known successes (with a few failures sprinkled in which were actually interesting read) doesn't allow for a repeatable pattern to emerge and emulate. There are few interesting items in the book like what are some characteristics of a platform or how they should go about seeding the demand and supply side of their platform. But they were far and few in between. The book refers to the company one of the authors started up. That on its own made the book look like a marketing tool - only some substance and lots of repetition.
December 6, 2020
I don’t get why this book got so many good reviews. Some of the analysis was probably relatively original when the book was launched, but reading it just a few years later exposes it to all its limitations.
The main idea of the book - that well designed platforms will dominate their markets or the new markets that they define - is at least challenged by the reality in which many of the ‘success stories’ find themselves at the moment, with even some of the largest by revenues still struggling to build a sustainable and profitable business model.
Also, the analysis is often simplistic and the book very repetitive: some sentences and quotes literally appear more than once in the book in similar or exactly the same shapes.
Overall, it’s not a bad book but I could have definitely spent my time better
The main idea of the book - that well designed platforms will dominate their markets or the new markets that they define - is at least challenged by the reality in which many of the ‘success stories’ find themselves at the moment, with even some of the largest by revenues still struggling to build a sustainable and profitable business model.
Also, the analysis is often simplistic and the book very repetitive: some sentences and quotes literally appear more than once in the book in similar or exactly the same shapes.
Overall, it’s not a bad book but I could have definitely spent my time better
July 16, 2017
Um livro muito bom para aqueles que estão buscando criar uma plataforma. Existem muitas dicas e exemplos interessantes que mostram a história da criação de diversas plataformas. Mostrando como fizeram, quais dificuldades enfrentaram, como construíram suas redes e fortaleceram seus negócios.
É um livro muito bom para quem busca conhecer mais sobre modelos de negócios. Um bom complemento para aqueles que leram "Your Strategy need a Strategy" (em especial o capítulo 5, Shaping), "Matchmaking", "Business Model Generation", "Peers Inc.".
Recomendo muito para aqueles que buscam entender o O QUE. Existe boas pinceladas no COMO, mas não espere um To-Do-List/step-by-step do processo. Pois isto depende de muitas variáveis.
É um livro muito bom para quem busca conhecer mais sobre modelos de negócios. Um bom complemento para aqueles que leram "Your Strategy need a Strategy" (em especial o capítulo 5, Shaping), "Matchmaking", "Business Model Generation", "Peers Inc.".
Recomendo muito para aqueles que buscam entender o O QUE. Existe boas pinceladas no COMO, mas não espere um To-Do-List/step-by-step do processo. Pois isto depende de muitas variáveis.
January 24, 2021
When I picked up this book I was (incorrectly) expecting to read the lurid tales and vicious methods the current crop of tech companies have used to grow. However I am so glad to have been proven wrong by the contents of this book.
Alex and Nicholas have done a fantastic job of delving into the guts of what powers the tech companies — the platform and network effects. They go to substantial depths on the topics like the economic theories behind industries as well as the principles of platform business. The framework of building a platform business and creating positive network effects is beautifully explained with solid examples (both successful and failures).
Alex and Nicholas have done a fantastic job of delving into the guts of what powers the tech companies — the platform and network effects. They go to substantial depths on the topics like the economic theories behind industries as well as the principles of platform business. The framework of building a platform business and creating positive network effects is beautifully explained with solid examples (both successful and failures).
June 5, 2017
Excellent text on the platform business model. It might go a bit far in justifying that the nature of most successful business models in the future are going to be platforms. However, it describes the strategy for building and sustaining a platform very effectivity. The ideas of focusing on a core transaction and the role of a platform in audience building, matchmaking, providing core tools and services and creating standards/curation provide an excellent framework for a successful platform strategy.
February 21, 2018
I find high rating for this book very very surprising. The core aurgument of this book does not make sense to me. Look at this statement from the author "Platform business models are far more cost-effective and higher scale than the old, linear models they are replacing". Really? Platform business is just a distribution layer on old linear models. They are not replacing it. Just like supply chain innovations few years back, this is the ear of innovation in distribution. I could not finish the bool because of multitude of weak arguments I encountered in first half of the book.
August 24, 2023
Provides valuable insights into the true nature of platforms through a compelling comparison with the conventional linear business models that dominated the 20th century, exemplified by companies like ExxonMobil and GE. The book is enriched with numerous illustrative case studies focusing on well-known platforms. It's a recommended choice for gaining a genuine understanding of the essence of platforms. However, if your objective is to find strategies for constructing a platform yourself, you might find it less suitable for that specific purpose.
June 27, 2025
Effective dissection of the workings of platform-businesses, but the author's style of writing and unabashed self-promotion become exhausting. Additionally, the first few chapters seem to suffer from hindsight bias by selectively ignoring the bankruptcies of many platform businesses in the dot.com bubble. My main takeaways were the importance of quick scale, the winner-takes-most dynamics, and the consequences of friction. This book is well complemented with an analysis of a large platform business, like Amazon.
January 25, 2018
Great read overall.
I actually found the first couple of chapters too basic and it was a pain/drag to read. The second chapter wasn't interesting as it was about economic theory and history. The last 2-3 chapters (7-8) are the best as it went in-depth into the platform companies, why and how some succeeded and other failed, as well as how to spot the next successful platform business.
5 stars for the last few chapters, but deduct one star for the slow and uninteresting beginning.
I actually found the first couple of chapters too basic and it was a pain/drag to read. The second chapter wasn't interesting as it was about economic theory and history. The last 2-3 chapters (7-8) are the best as it went in-depth into the platform companies, why and how some succeeded and other failed, as well as how to spot the next successful platform business.
5 stars for the last few chapters, but deduct one star for the slow and uninteresting beginning.
November 11, 2019
Great read. The book should be titled Platform Monopolies. Some of the negatives are the book is solely focused on platform drive companies as the only model that’s going to survive or at least that what I thought. Also with some of the examples it was hugely repetitive and cherry picking examples exhibiting a survivorship and confirmation bias to make the case. Overall it’s a great read I wish the authors who are clearly very talented to provide more emphasis on breadth
June 18, 2020
It’s a book about platform businesses. If you know nothing about how platform business works, it’s a good introductory book. However, I think it’ll probably have a short shelf life. These businesses change quickly, 5 years from now, a lot of businesses described in the book may change dramatically or die. Every era has its great businesses - FAANG is for ours, but they are not invincible just as great businesses of the prior generation.
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