5 ms·

Why does every company now want to be a platform?

56 points by prostoalex 5y ago

tapan_jk 5y ago
> Not everyone needs to start a company to be happy. And not every company needs to take over the world. Yep.
howaboutnope 5y ago
> Once the platform is in place, money is supposed to flow through the system without much extra effort at all. In other words, rent-seeking behavior.
- qeternity 5y ago
  This is not what “rent-seeking” means.
  - dTal 5y ago
    It's exactly what "rent-seeking" means.
    - qeternity 5y ago
      No, it isn’t. You can downvote me all you like, but “rents” has a very specific economic meaning, and it doesn’t mean what you think it does. https://en.m.wikipedia.org/wiki/Economic_rent https://en.m.wikipedia.org/wiki/Economic_rent
      - dTal 5y ago
        Well, if we're linking Wikipedia: https://en.m.wikipedia.org/wiki/Rent-seeking https://en.m.wikipedia.org/wiki/Rent-seeking "Rent-seeking is the effort to increase one's share of existing wealth without creating new wealth." In other words, money without effort.
        qeternity 5y ago
        You really don’t get it. I linked Wiki so that you could read about what it actually is. You’ve decided to cherry pick an excerpt that you think justifies your point, while completely misunderstanding what said excerpt actually says. You’re arguing that platforms engage in rent-seeking behavior. Please point to a platform that has created wealth for itself, at the expense of others wealth (thus not creating new wealth). Spoiler: there aren’t any. Now do you get why rent-seeking doesn’t mean what you think it does? What you really mean is “platforms don’t work hard enough for the cut they take” which as I said above, is not what rent-seeming means.
        inter_netuser 5y ago
        All of them, once they get big enough. Any multinational that's not trying to siphon profits to offshore is not going to last very long. All of them siphon wealth offshore, away from where it would be rightfully taxed. Example: "In 2020, Amazon earned 44 billion euros in Europe, but reported paying no taxes in Luxembourg." From your wiki article: >"Rent-seeking results in reduced economic efficiency through misallocation of resources, reduced wealth-creation, **lost government revenue**, heightened income inequality,[2] and potential national decline." >"lost government revenue" Big Tech doesn't simply capture some tiny regulator. They capture (jointly with other multinationals) entire countries, like Ireland and Luxembourg.
        qeternity 5y ago
        No, again, this is not economic rents. Income !== wealth. And just because they pay no taxes in Europe doesn’t mean there is no net wealth creation, even in Europe. Just because rent seeking behavior can result in lost government revenue doesn’t mean that any loss of government revenue is rent seeking behavior. Tax evasion is not rent seeking. But again, we are so far off the mark of what an actual economic rent is. It’s a topic that requires reading beyond a wiki article, and please stop trying to just find language that supports your existing, misinformed conclusion.
        dTal 5y ago
- MomoXenosaga 5y ago
  Well yes being a middle man and taking a percentage of each transaction is winning the lottery. You can see this happening with food delivery apps. When you become the biggest in America or Europe everyone who wants a pizza delivered has to go through your system.
  - KptMarchewa 5y ago
    What I see with food delivery is what I see with ride-sharing - people price arbitrage, using many apps and choosing the cheapest.
hulitu 5y ago
So they can all jump together.
paxys 5y ago
$$$$$$
throwawaysea 5y ago
Companies desire a successful platform strategy because: 1. Being a platform means you can grow to face reduced competition and earn lots of income while those on the platform perpetuate your relevancy (and your income stream). For example the network effects of iPhone purchasers and app developers makes it very hard for new mobile ecosystems to challenge Apple (outside of Android anyways). 2. If a company doesn’t make a platform play, it may be displaced by someone who does. As an example, niche book retailers now mostly compete against each other as third party sellers on Amazon’s platform, where the shoppers are. 3. A platform is a way to diversify and make yourself less vulnerable to a single area or some external dependency. As an example, Walmart and many others have started offering “buy now pay later” plans that enable customers to buy on credit without relying on credit card companies and credit scoring limitations. It is a problem, however. Large platforms inherently face reduced competition, disrupting healthy market dynamics. They gain influence and can participate in regulatory capture. They become powerful like pseudo governments, but yet aren’t treated like a public agency/service/utility. We need new legislative thinking and bold politics to rein in these massive institutions.
KirillPanov 5y ago
The answer to this question appeared in the most profound comment [1] I have ever seen on HN: > The goal is growth and consolidation. [Governments] want every major industry to be completely dominated by a small handful of big players. This makes it much easier to regulate and implement policy. This is why everybody wants to be a "platform". Platform is the polite way of saying "last man standing after the mandatory consolidation process". Unfortunately politicians like power, and biasing the field towards consolidation gives them more power; therefore they will continue to bias the field in this manner. [1] https://news.ycombinator.com/item?id=28588457 https://news.ycombinator.com/item?id=28588457
57844743385 5y ago
Cause living on someone else’s platform, they’re possibly going to shove you off that platform.
jrm4 5y ago
Whenever I hear the word platform, I think (and encourage others to think) "flypaper."
sjtindell 5y ago
Being a platform means someone else creates the ideas and actually furthers growth. You just need to take your cut and cash a check.
egiboy 5y ago
Why do I need a NYT account? Yeah, that's why.

56 points by prostoalex 5y ago

> Not everyone needs to start a company to be happy. And not every company needs to take over the world. Yep.

> Once the platform is in place, money is supposed to flow through the system without much extra effort at all. In other words, rent-seeking behavior.

qeternity 5y ago
This is not what “rent-seeking” means.
- dTal 5y ago
  It's exactly what "rent-seeking" means.
  - qeternity 5y ago
    No, it isn’t. You can downvote me all you like, but “rents” has a very specific economic meaning, and it doesn’t mean what you think it does. https://en.m.wikipedia.org/wiki/Economic_rent https://en.m.wikipedia.org/wiki/Economic_rent
    - dTal 5y ago
      Well, if we're linking Wikipedia: https://en.m.wikipedia.org/wiki/Rent-seeking https://en.m.wikipedia.org/wiki/Rent-seeking "Rent-seeking is the effort to increase one's share of existing wealth without creating new wealth." In other words, money without effort.
      - qeternity 5y ago
        You really don’t get it. I linked Wiki so that you could read about what it actually is. You’ve decided to cherry pick an excerpt that you think justifies your point, while completely misunderstanding what said excerpt actually says. You’re arguing that platforms engage in rent-seeking behavior. Please point to a platform that has created wealth for itself, at the expense of others wealth (thus not creating new wealth). Spoiler: there aren’t any. Now do you get why rent-seeking doesn’t mean what you think it does? What you really mean is “platforms don’t work hard enough for the cut they take” which as I said above, is not what rent-seeming means.
        inter_netuser 5y ago
        All of them, once they get big enough. Any multinational that's not trying to siphon profits to offshore is not going to last very long. All of them siphon wealth offshore, away from where it would be rightfully taxed. Example: "In 2020, Amazon earned 44 billion euros in Europe, but reported paying no taxes in Luxembourg." From your wiki article: >"Rent-seeking results in reduced economic efficiency through misallocation of resources, reduced wealth-creation, **lost government revenue**, heightened income inequality,[2] and potential national decline." >"lost government revenue" Big Tech doesn't simply capture some tiny regulator. They capture (jointly with other multinationals) entire countries, like Ireland and Luxembourg.
        qeternity 5y ago
        No, again, this is not economic rents. Income !== wealth. And just because they pay no taxes in Europe doesn’t mean there is no net wealth creation, even in Europe. Just because rent seeking behavior can result in lost government revenue doesn’t mean that any loss of government revenue is rent seeking behavior. Tax evasion is not rent seeking. But again, we are so far off the mark of what an actual economic rent is. It’s a topic that requires reading beyond a wiki article, and please stop trying to just find language that supports your existing, misinformed conclusion.
        dTal 5y ago
MomoXenosaga 5y ago
Well yes being a middle man and taking a percentage of each transaction is winning the lottery. You can see this happening with food delivery apps. When you become the biggest in America or Europe everyone who wants a pizza delivered has to go through your system.
- KptMarchewa 5y ago
  What I see with food delivery is what I see with ride-sharing - people price arbitrage, using many apps and choosing the cheapest.

hulitu 5y ago

So they can all jump together.

paxys 5y ago

$$$$$$

throwawaysea 5y ago

Companies desire a successful platform strategy because: 1. Being a platform means you can grow to face reduced competition and earn lots of income while those on the platform perpetuate your relevancy (and your income stream). For example the network effects of iPhone purchasers and app developers makes it very hard for new mobile ecosystems to challenge Apple (outside of Android anyways). 2. If a company doesn’t make a platform play, it may be displaced by someone who does. As an example, niche book retailers now mostly compete against each other as third party sellers on Amazon’s platform, where the shoppers are. 3. A platform is a way to diversify and make yourself less vulnerable to a single area or some external dependency. As an example, Walmart and many others have started offering “buy now pay later” plans that enable customers to buy on credit without relying on credit card companies and credit scoring limitations. It is a problem, however. Large platforms inherently face reduced competition, disrupting healthy market dynamics. They gain influence and can participate in regulatory capture. They become powerful like pseudo governments, but yet aren’t treated like a public agency/service/utility. We need new legislative thinking and bold politics to rein in these massive institutions.

KirillPanov 5y ago

The answer to this question appeared in the most profound comment [1] I have ever seen on HN: > The goal is growth and consolidation. [Governments] want every major industry to be completely dominated by a small handful of big players. This makes it much easier to regulate and implement policy. This is why everybody wants to be a "platform". Platform is the polite way of saying "last man standing after the mandatory consolidation process". Unfortunately politicians like power, and biasing the field towards consolidation gives them more power; therefore they will continue to bias the field in this manner. [1] https://news.ycombinator.com/item?id=28588457 https://news.ycombinator.com/item?id=28588457

57844743385 5y ago

Cause living on someone else’s platform, they’re possibly going to shove you off that platform.

jrm4 5y ago

Whenever I hear the word platform, I think (and encourage others to think) "flypaper."

sjtindell 5y ago

Being a platform means someone else creates the ideas and actually furthers growth. You just need to take your cut and cash a check.

egiboy 5y ago

Why do I need a NYT account? Yeah, that's why.