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Platforms facilitate interactions between producers that create value which others consume. Thereby comparing revenue of a platform against a traditional busine
by lowdose 6y ago
Platforms facilitate interactions between producers that create value which others consume. Thereby comparing revenue of a platform against a traditional business model doesn't make sense because the cost and profit drivers are inverted.
- ChrisLomont 6y ago>that create value which others consume. and > Thereby comparing revenue of a platform against a traditional business model doesn't make sense When two entities trade, by far they do it because they both benefit. There is no difference between platforms and other businesses. Each provides value to customers, and the sum of the benefits each gains each trade (often called consumer and producer surplus in economics) is the net gain to the pair. Revenue is a very good measure of how valued these trades are to customers. In fact, almost all customers would pay more for the benefit (up to but not exceeding their consumer surplus).
- lowdose 6y ago> almost all customers would pay more for the benefit. This is where you are wrong, how many paying customers does Google have VS users? Platforms that are value aggregators decoupled value production from internal capacity.