What Platforms Do Differently than Traditional Businesses
One of the oldest business models in the world is using new technology to trample traditional businesses, drive innovation, and create new and immense sources of value. Matchmakers, the subject of our new book, make it easy for two or more groups of customers, like drivers and riders in the case of Uber, to get together and do business. They operate platforms that make it easy and efficient for participants to connect and exchange value.
Unlike traditional businesses, they don’t buy inputs, make stuff, and sell it. Instead, they recruit participants, and then sell each group of participants access to the other group of participants. The “participants” are the “inputs” that they use to produce the intermediation service they provide.