“Technology Isn’t Fast Enough” in a Platform Economy

3 Predictions for a Digital Age

Last week one of my colleagues asked an intriguing question:

What is the best strategy to deal with the “platform revolution”?

We were discussing the impact of the technological “revolution” on the way we are currently doing business.

My colleague is a lawyer and he was telling me how his clients — individuals, as well as small businesses — are increasingly well-informed about what kind of service they require.

They come to the initial meeting with a “template” (a draft contract, lease, etc.) that they have downloaded from an online legal service provider. They are much more aware of the issues and potential risks.

He made the point that this didn’t happen before, even five years ago. He felt that he had to adapt the way he worked in order to satisfy this new type of “consumer”.

I recognize this trend. My wife owns a restaurant. Keeping up with changes in food security and nutrition policies had always been stressful. But now, a simple app (and social media) leads her through the reforms and assists her in making the necessary changes.

Consumers are more active and better informed in a digital age.

The main reason for this change has been the Internet and effortless access to information. But what has really accelerated this trend has been the emergence of “platforms” that provide information and services to all users (consumers and businesses).

My colleague was asking the right question.

We are witnessing an on-going “platform revolution”. A revolution that has already had a tremendous impact on business, but will also “disrupt” government and education.

The “Platform Revolution”

The success of platforms can be explained by the exponential growth of technology offering users improved “connectivity”, “choice” and “convenience”.

Think Amazon, Google, Facebook, Spotify, Netflix, Uber, and Airbnb. Or — on a smaller scale — the legal service platforms that help my wife and my colleague’s clients.

Platform Companies Are Becoming More Powerful - but What Exactly Do They Want?_Predictably, platforms have long been intoxicating to investors. They've also been the subject of rapturous popular…_www.nytimes.com

“Connectivity” offers users the possibility to share reviews, experiences and any other information. The technology that drives the platform also connects developers, creators on one side and users on the other.

Second, there is the element of “choice”. Platforms often help promote, find and compare products and services. What is interesting in this regard is that platforms help users make the “right”, or at least, “better” choices.

A seamless online access to a platform in combination with user reviews have become more important in the “choice process” than brand image or loyalty. As a result, branding matters much less than delivering constant innovation.

Third, and perhaps most importantly, is the “convenience” that is offered by platforms. Platforms save time, offer speed and are continuously improving the “user experience”.

New Expectations of Technology

But, there is more.

Platforms have changed the way we think and feel about new technology and innovation.

We have become much more accustomed to life-changing technologies — think Internet, e-mail, smartphones — and, as a result, we all expect more.

Within one generation, we have come to expect new technologies that offer even more connectivity, choice and convenience. Our imaginations often run ahead of what current technologies can deliver.

In a platform economy, all of us now have a highly developed sense of what a technology might do and are more easily disappointed and frustrated when a new technology fails to meet these new expectations.

Technology has empowered us and fueled our imaginations, but it has also made us less patient.

This sense of frustration (and resulting criticism) has become more common recently.

For example, disappointment with Apple’s latest versions of the iPhone.

Apple is really bad at design_The "notch" on the new iPhone X is not just strange, interesting, or even odd - it is bad. It is bad design, and as a…_theoutline.com

Or, Google’s AI, which is “still” no smarter than a first grader.

Google's AI still isn't smarter than a first grader_Apple fans who make use of the iPhone's famous virtual assistant, Siri, were probably elated to hear a more human…_futurism.com

It is ironic that, on the one hand, platform companies “disrupt” traditional ways of doing things by empowering users in new ways. And yet, on the other hand, these same platforms are increasingly “disrupted” by users demanding a better level of performance than the platform and its products or services can currently offer.

3 Predictions about Platforms in a Digital Age

This new relationship with technology leads me to three predictions about where things are going.

#1 — Businesses will either operate “as” a platform or be “integrated” with a platform

The future of the digital age will be platform-driven ecosystems in which multiple players participate.

The most influential companies will be the ones that position themselves as platform owners (they typically control the platform). Think Amazon, Google and Facebook.

Established and “traditional” companies must also make this transformation.

The rule is very simple:

You either become a platform or you will be killed by one.

It’s no surprise that established companies are currently taking steps to build their own platforms. Ikea’s recent acquisition of TaskRabbit is a good example of this.

These platform companies can only survive if and when they keep up with market demand. And this can only be done if they acquire or partner with highly innovative companies that enable the platform to constantly reinvent and expand itself.

A platform cannot survive without these “integrated companies”. Consider US gaming company Riot Games, which is “owned” by Chinese platform company Tencent.

It’s Tencent’s world — you are merely an avatar in it_How the group conquered China’s video game market to become more valuable than Exxon._medium.com

Finally, there are the “connected companies” that make use of the platform and become part of the ecosystem in order to offer their products and services to a global market.

#2 — Governments will become platforms

The idea that governments should become platforms is not new. Tim O’Reilly was among the first people to envision government as platform.

Gov 2.0: It's All About The Platform_Editor's note: The following guest post is by Tim O'Reilly , the founder and CEO of computer book publisher O'Reilly…_techcrunch.com

Government as a platform means that the government makes use of social media, becomes more transparent and builds cloud-based systems for shared government services.

But, “government as a platform” is much more than just a “digital government”.

It is a form of government that actively collaborates with all of its constituencies. It is a government that tries to understand and exploit the opportunities and challenges offered by a digital age.

Governments must shift from a focus on “past experience” and then designing a framework for the controlled deployment of technology to active participation in a project of co-creating the “most optimal solution” with other stakeholders.

Think about it. Platforms have already had a huge impact on the way we think about ownership, labour and privacy. For instance, consumers are more willing to exchange some of their privacy for the convenience of platforms.

Consumers are willing to give up a lot to access the information and services that platforms provide. The gains in convenience appear to justify giving up a certain amount of freedom. For the younger generation, in particular, this is the most obvious thing in the world.

Americans often willing to sacrifice online privacy for utility, study finds_Americans have walked a fine line on privacy in the internet age. Taking constant pictures with iPhones is considered…_www.theguardian.com

#3 — Education will be centred around the platform idea

The authors of the Platform Revolution are almost convinced:

Education is perhaps the prime example of a major industry that is ripe for platform disruption.

Here, it should be noted that platforms including Coursera, edX, Skillshare and Udemy have already transformed “informal learning” and “career education”.

Medium, Wikipedia and YouTube have made it possible for anyone to learn almost anything in a relatively short period of time.

Platforms Have Transformed the Economy. Is Education Next?_Digital platforms have transformed the way we live, work, travel and learn. The three largest firms (by market…_www.gettingsmart.com

But, it is not only about the platforms that offer education.

As I’ve written before, what is perhaps more important is that education needs to prepare the next generation to function in a platform economy.

And this means a complete transformation in how and what we teach the younger generation.

Lessons Learned

Platform technologies are central to the economy in a digital age.

They have already changed all of us. They have empowered us by making us better informed and we are willing to exchange a great deal of freedom for that choice and convenience.

At the same time, however, platforms have made us more demanding and more sceptical.

Everyone — business, government, educators — needs to adapt to this new reality by embracing the platform culture.

Let me end, by going back to answering my colleague’s question.

It seems to make perfect sense to re-invent a law firm as a platform.

Law firms are no different from banks and other businesses that are increasingly making the shift to a platform. Ignoring the platform economy would mean that they will soon be disrupted by existing platform companies. Amazon, for example, is already exploring the idea of offering banking services.

As a platform, my colleague’s business would be more flexible and able to innovate faster.

And there are other advantages. As a platform, his firm would be better positioned to deal with the coming AI revolution in “legal tech”.

Certainly, the current results of “legal tech” solutions — no matter how promising — are still “disappointing”. They are smart, but not as smart as we want — or need — them to be.

This is the moment of frustration that we often feel when comparing the existing technology with the technology of our imagination.

And yet, it is important to keep things in perspective. Technology does help augment the intelligence, knowledge and skills of humans (rather than replacing them).

In this way, we can better appreciate new technology for what it (currently) can do, as well as what it (currently) doesn’t. Organizing as a platform can actually help accelerate technological developments.

My colleague was convinced:

Platforms will continue to “revolutionize” our world.

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