“There are schemes that don’t respect and honor the payment networks,” said James Anderson, the senior vice president for mobile product development at MasterCard. “We want to invest in programs that respect our role in the ecosystem.”—
A quote from an NYT article on Apple Pay.
"Respect and Honor…" I will remember that phrase for a long time. It’s a death knell.
There is nothing innovative or disruptive about respecting and honoring incumbents. Did the scheme of MasterCard/Visa respect and honor cash? Did scheme of cash respect and honor gold? Did scheme of gold respect and honor the barter system?
Indeed, the credit/debit card as we know it is going the way of the dodo by clinging to their role in the ecosystem.
Network Effects: The 5 C's to Growing A Successful Platform
Building a successful platform business is like tending a greenhouse of rare plants. First, there is a seed of an idea, but without any nurturing, that seed will do nothing but lie dormant. Funding acts like sunlight to provide energy to live another day. Your audience is like water, and user acquisition can be either organic like rain or paid for like irrigation.
Network effects are the soil containing the nutrients that either foster or mitigate viral growth.
There are 5 C’s that dictate the quality of a platform’s soil: Connection, Communication, Collaboration, Curation and Community.
Most people’s understanding of network effects begins and ends with connections, representing the theoretical number of interaction pairs among the community.
As each participant, or node, is added to the connection graph, the theoretical number of connections doubles. The emphasis here is on theoretical, as connections alone do not translate to actual interactions. For example, MySpace still has 300 million user profiles, with a gazillion potential connections, yet it sits like a giant empty rusting amusement park. Womp womp. :-(
This is how we the turn potential energy of connections into kinetic energy by encouraging real interactions among the platform participants. Great platforms, like Facebook or Kickstarter, provide a spectrum of engagement opportunities, not just aggregated presence. There’s nothing worse than a party with a DJ and nobody dancing. Move your users.
Let’s add some context to our communication by allowing platform participants to work with and for each other through collaboration. Producers of value can team up to create hybrid products with embedded attribution across contributors (think reblogging on Tumblr or retweets on Twitter). Consumers of value can leverage collective behavioral consumption patterns to improve discovery of value producers (e.g., recommendations like related content on YouTube or “Customers who bought this item also bought” on Amazon).
The more we make historical interactions a virtuous cycle of feedback within the product, the better we’ve captured derivative value amidst the platform’s data exhaust.
If collaborative production and consumption provides a macro layer of communication, curation is the micro layer, representing individual tastes via personalization. Self-expression through the rearranging of other’s work offers a powerful form of meta-creativity. Allowing that meta-creativity to be shared creates a rich taste-making user segment in the value chain, ostensibly filling all the value gaps left open by the anchor producers.
A pinboard on Pinterest is a curated take on a particular topic, in the same way that a playlist on Spotify allows for the individual expression of content you didn’t create.
Though often used as a catch all for all things “social,” community, as it relates to network effects, encompasses two symbiotic characteristics. The more a platform allows for permissionless involvement across the other C’s, the more the participants feel as if they have an ownership stake in the platform. These two intertwined factors of community are the vital roots of externalized innovation and co-production (yes, I snuck in a 6th C, but really, 5 is plenty).
Great examples are Stack Overflow, Wikipedia and reddit, which all have highly engaged participants who create and dictate the implicit rules and social mores that govern their communities.
Grab Your Shovel:
Connection, Communication, Collaboration, Curation and Community are a reflection of your ability to attract, activate and empower your platform participants. I could extend the metaphor of platform growth to include exogenous factors like disease (vicious cycles), floods (usage exceeds capacity) and frost (regulatory environment changes), but that’s another post entirely.
Remember to keep your network effects soil well aerated and to use enough compost. Need help gaining a green thumb? Feel free to contact me @gbattle.
“Since it launched in March 2012, IFLS has attracted more than 17.9 million Facebook followers—more than Popular Science (2.7 million), Discover (2.7 million), Scientific American (1.9 million), and The New York Times (8 million) combined. Its following is larger than those of the world’s two most prominent science communicators: Cosmos host Neil deGrasse Tyson (1.8 million) and Bill Nye The Science Guy (3.2 million), both of whom are fans of Andrew’s page. Her empire has since expanded to include a website, IFLscience.com, which has a staff and publishes news stories, and a television show slated to start on the Science Channel this fall.”—
5 Minute Quick Thoughts Re: Secret Hacking and Security
Like many, I had already thought about the most recent Secret Hack, but was too lazy to think of trying it. I think the key to guarding your identity on Secret, in light of these hack methods, is if using Gmail, to ALWAYS use some derivation of your username with the ‘+’ mechanism.
For instance, instead of:
The email will appear unique to Secret (or any service for that matter), but not unique to Gmail. Added bonus, you can create filters on the incoming email to direct the marketing spam to the bit bucket. I wonder if this email obfuscation would, in effect, turn Secret into a follower/following model rather than the current friend model. Specifically, I follow all the people I’ve ever emailed, but they don’t necessarily follow me.
Though, no matter what course of action security through obscurity is complete bullsh*t.
“Kim Kardashian is not a specific entity because no one knows her as the result of a specific accomplishment or skill; Kim Kardashian is an idea, and as such there is no singular group of people that are exclusively receptive to her brand. A huge percentage of the iPhone-owning population in Western markets knows Kim Kardashian (although many may struggle to understand why), and as such that huge percentage may be influenced by her branded image on a mobile game to an extent that very few other brands could achieve.
Additionally, because she is not known for any specific reason, many of the installs that led to Kim Kardashian: Hollywood ascending the Top Downloaded chart (and thus garnering a sufficiently large user base to propel the game into a top 10 position on the Top Grossing chart) may have been the result of sheer morbid curiosity — what could a Kim Kardashian game possibly be about?”—A great analysis on the ascendancy of Kim Kardashian: Hollywood by Benjamin Seufert. The whole piece is great.