A hyper-hectic visit to New York, coupled with news breaking thick and fast, I almost forgot to blog about my recent book review of Invisible Engines by David S. Evans, Andrei Hagiu and Richard Schmalensee for the Wall Street Journal. The book looks at rise of software platforms including the Windows, iPod, and Sony PlayStation, and how they spawn an entire ecosystem.
One moral of the authors’ story returns us, in effect, to Mr. Ballmer’s own platform dance: Get the developers. The smart ones–helped by luck and investment capital, among much else–can make invisible engines rocket a company into the stratosphere. “Invisible Engines” offers iPod as an example.
While the book is quite academic in nature, it might be worth taking a look. If not, just read the review. 😉
3 thoughts on “Profit From Platforms”
your review… I assume 😉
Having not read book, just review, I am in an ideal position to comment 🙂
Hackers and Painters seems like it makes some similar points though.
However, having run a software company I would say yeees, but thats not the whole story. Sorry Geeks, but it isn’t.
Take iPod/iTunes for eg – its not just a software platform..its an end to end value chain.
Yes, you need the best developers you can get…a few good ones are far more productive than a large team of OK ones.
But you also need people who can understand customer needs, people who can build great use cases and system specs, people who are great at customer sales and service.
Oh, and people who can design great consumer icons 😉
If you have a stable existing business like MSFT, maybe developers are the critical cost component, but in a flexible environment a lot of others skills come into play.
Haven’t read the book yet but it seems pointing to theory of increasing returns as well.