1.
LECTURE L19
NETWORK PLATFORMS

2.
Eric Schmidt
Le Web Conference 2011

3.
before social media?

4.
READ ONLY CULTURE

5.
PASSIVE CONSUMERS

6.
STANDARDISED, INDUSTRIALISED

7.
before broadcasting?

8.
SINGING THE SONGS OF THE DAY

9.
CONVERSATION

10.
Radio
Commercial
Radio TV
Magazines
BROADCASTING
1900 20001950
Videotapes
Commercial
TV
Newspapers
Films
LP
CD DVD

11.
First email
sent
1971
First online
bulletin board
1979
World Wide
Web
1991
GeoCities
1994
Instant Messages IM
1996
1970 20101980 1990 2000 2010
TheGlobe.com
1995
LiveJournal
P2P, Napster
1999
Friendster
2002
MySpace
Linkedin
Photobucket
Delicious
2003
Facebook
2004
Youtube
2005
Twitter
2006
END OF
BROADCASTING
BROADCASTING

12.
END OF
BROADCASTING

13.
Clay Shirky
How social media can make history

14.
“We’re all in this together”

15.
And then we got LOL cats…

16.
Network Effect
Occurs when a product or service becomes more
valuable to its users as more people use it
Understanding this helps build better products and
businesses
Source: Benedict Evans slide deck

17.
Network properties:
1. Whether the nodes are homogeneous or heterogeneous
2. Their type of clustering and degree of connections
3. Directionality of those connections
4. Whether they have (or are) complements
Network Properties
Networks are basically just a set of nodes connected by links
Source: Benedict Evans slide deck

18.
1. Homogeneous or heterogeneous?
Homogeneous: Composed of similar types of nodes
Skype is an example of a homogeneous network where most of
the value is derived from a single class of users, all interested in
placing a phone call
Heterogeneous: Composed of different types of nodes
OpenTable is an example of a heterogeneous network with two
distinct categories of participants: one side is restaurants, the
other side is diners
Source: Benedict Evans slide deck
Network Properties

19.
2. Degree of connections and type of clustering Source
Degree: Measures number of connections to a single node
Clustering coefficient: Measures degree to which nodes in a
graph (e.g., social graph, interest graph, intent graph, etc.)
cluster together
Type of cluster: Can range from hub-and-spoke (star) to
connected (clique). Example of Facebook friends connections
clustering (high school, college, significant other’s, etc. clusters)
Source: Benedict Evans slide deck
Network Properties

20.
3. Connections: Unidirectional or Bidirectional?
Friends
Facebook, for example,
is one place where
connections tend to be
bidirectional
Follower
Twitter, for example, is one
place where connections can
more easily be unidirectional
or one-way following, leads
to asymmetrical connections
Source: Benedict Evans slide deck
Network Properties

21.
4. Complementary Networks
Increase in usage of one product by a set of users reinforces and
increases the value of a complementary (but separate!) product,
which in turn, increases the value of the original
More usage of the MS Windows operating system, results in
more usage of the MS Office suite of applications
Source: Benedict Evans slide deck
Network Properties

22.
Common law for assessing the value of communication networks
Source: Benedict Evans slide deck
Network Properties
Sarnoff’s Law
Value of the network is proportional to
the number of viewers
V = n
Broadcast: Yahoo!, Netflix

23.
Common law for assessing the value of communication networks
Source: Benedict Evans slide deck
Network Properties
Metcalfe’s Law
Value of the network is proportional to
the square number of connected users
V = n2
Peer to peer: Facebook

24.
Common law for assessing the value of communication networks
Source: Benedict Evans slide deck
Network Properties
Reed’s Law
Value of a group-forming network is proportional to the
and ease with which groups form within it (subgroups
grow faster than sheer number of P2P participants)
V = 2n
Gruop forming: Slack, WhatsApp groups

25.
Network is a group of interconnected people (social network)
or system of things (telephone, printers to computers)
Marketplace is network where money/transactions flow
between two or more sides with distinct (i.e. hetrogeneous)
groups of users on one side; a successful marketplace is
where supply and demand are attracted to the same place
Network Terms

26.
Platform is a network of users and developers; the multi-sided
feedback loop between those users, developers, and the
platform itself creates a flywheel effectincreasing value for
each of those groups.
It can also be thought of as a network that can be
programmed, customized, and extended by outside users—
often meets needs and creates niches not defined by its
original developers at the outset
Network Terms

27.
The Brat Pack Returns

28.
Breakfast Club 1985

29.
BRAT PACK
MASHUPS

30.
YouTube's Origins as a Dating Site

31.
YouTube is changing the way we Innovate and learn
The Liquid Network
The YouTube Effect

32.
Chris Anderson
How web video powers global innovation
TED 2010

33.
CROWD
ACCELERATED
INNOVATION

34.
Crowd - Group of people that share a common interest. The
bigger the crowd, more innovation
Light - Clear visibility of the capabilities of the best people
Desire - Innovation is hard, need practice
Crowd Accelerated Innovation

35.
THE TOOLS
OF PRODUCTION
IN THE HANDS
OF PEOPLE

36.
WHAT HAPPENS
WHEN YOU
CONNECT PEOPLE?

37.
Clay Shirky
How cognitive surplus will change the world

38.
WHY DO
PEOPLE
SHARE?

39.
WHY DO
PEOPLE
CONTRIBUTE?

40.
WHY DOES
OPEN SOURCE
WORK?

41.
WHY DOES THESE WORK?
WE DON’T KNOW THESE
PEOPLE AND WE DON’T
TRUST THEM

42.
Rachel Botsman
We've stopped trusting institutions and started trusting strangers

43.
WHY DO
PEOPLE
CONTRIBUTE?

44.
Sharing is in our self interests

45.
We do it for ourselves

46.
It is in companies best interest
WHY DOES
OPEN SOURCE
WORK?

47.
THE NEW
SHARING
ECONOMY

48.
HIERARCHAL NETWORK
20th Century 21st Century

49.
http://www.flickr.com/photos/piet_musterd/
Crowdsourcing

50.
Source: Picutre from IMDb, Film Juno

51.
Source: Picture from Amazon.

52.
Those who control the media control the culture
Social media is the first media network created by consumers
New universe of platforms, how we do business
Social Media

53.
Software SellerBuyer
Software brings the coordination cost to zero
Think Uber, Airbnb etc
Platforms

54.
People reject consumerism
Consumer-capitalism ate everything, and people are
becoming apathetic towards consumer mass-marketing
and production
People do not care for being targeted anymore and have
even stopped voting as a result of being targeted by
politics
Access trumps ownership
Jerry Michalski - Jumping Platforms
The New Market

55.
Source: http://www.flickr.com/photos/webrevenu/

56.
Source: Facebook

57.
The Network Effect

58.
2.2 billion
people

59.
January 15, 2009, US Airways Flight 1549

60.
Tahrir Square, 2010

61.
Tehran uprising, 2009

62.
Julia Klöckner, of chancellor Angela Merkel’s CDU, told her Twitter
“followers” on that afternoon: “People, you can watch the football
in peace. The vote was a success.”

63.
more years”
In three hours, the message
had been re-tweeted about
455,000 times
770.000 retweets

64.
3 million retweets

65.
Launched October 2010
800 million active users
In 2012, Facebook bought
Instagram for $1 billion
Instagram

66.
Launched March 2010
Pintrest
200 million active users monthy
84% are women
75% of usage is mobile, 93% of users shopped online

67.
Launched September 2011
Snapchat
Users: 200+ million
First popular with users age 13-23
7 billion videos per day

68.
ed September 2010
hatsApp
sers: 1 billion
700 million photos and 100 million videos
every single day
55 employees - bought by Facebook
for $19 billion

69.
There is actually value in not belonging to a group
Facebook killers?

70.
NEXT