Dr. Geoff Parker says the punchline when it comes to choosing a career path is that “you don’t have to make up your mind.” Pursuing computer science during his undergrad years and then spending time in semiconductor engineering, he says that a lot of what is interesting in the economy today is at the intersection of technology, business, economics.
This intersection makes Dr. Parker one of the foremost experts in his field of platform technology; he is the co-author of Platform Revolution and a professor of engineering at the Thayer School of Dartmouth College.
In this episode of Net Effects Podcast, co-hosts Les Ottolenghi and Mark Bavisotto visit with Dr. Parker about how platforms are changing the global economy and the future of business.
Episode highlights:
– Going to market is like building a boat. Growing up, Dr. Parker spent many years rowing on the Charles River in Boston. He uses the metaphor based on his experience of putting together rowing shells for races. He says that in order to earn a seat in the boat, he had to do his part and be a contributing member of the group. “Building a boat” in the sense of going to market now means putting a team together, sharing a goal, having leadership and vision, and being balanced at all times.
– The idea of platforms has been around Medieval times or longer. Any village marketplace could be described as a platform. What’s new and important is that the boundaries of a village market are strongly defined and curbed by transaction costs — it would take a day or multiple days to bring something to market. Transaction costs across the economy have fallen like a rock because of incredible network connectivity; the economy’s production, value, and consumption has shifted from the physical to the digital. Tools of computation and data analytics allow us to use that raw material bits to create new products and services. That all sets up an economy, which can have these triangular structures of platforms that mediate the interactions between different types of users. An example of this is eBay (i.e., a pure marketplace).
– Cloud platforms and their impact. The questions around search engines’ control, economic interests, and oversight is just beginning. By diving one layer down and seeing what search engines are built on, there are some of the biggest public cloud platforms on the planet. These include critical infrastructure systems (e.g., Google’s geolocation tech). The search might be one of those because it drives much commerce, but others like that are even more critical that would instantly impact the globe if they went offline.
– We are in the middle of a cloud transformation. And it’s just the second or third inning. Enormous companies in industries like manufacturing, financial services, and healthcare have only just begun to deal with the implications of the platforms. Some have been relatively protected by regulation, so they haven’t needed to move as quickly, but the writing is on the wall. First of all, there is a big digital transformation effort underway that could be called “the antecedent” (or the precursor to platform) because big platforms can’t run in customized, firewalled, on-premise systems. So collectively, companies are in the middle of a cloud transformation, which sets the stage for building platforms that can leverage horizontal data across organizations, across an organization’s structure, and across organizations externally. We’ve just begun to see how companies are going to harness these technologies to first change their operating models (how are they producing value). Then we will also see a business model transformation (how are they capturing value).
Other topics include digital transformation leadership archetypes, business models, data and information, and more. Listen to the full episode now.
About Dr. Geoff Parker: Dr. Parker is a professor of engineering at the Thayer School at Dartmouth College. He also serves as Director of the Master of Engineering Management Program. In addition, he is a visiting scholar and research fellow at the MIT Sloan School’s Initiative for the Digital Economy, where he lead platform industry research studies and co-chair the annual MIT Platform Strategy Summit. Dr. Parker works to understand the economics and strategy of network “platform” industries. He co-developed the theory of “two-sided networks,” which provides a mechanism to explain pricing in network markets. He works with numerous organizations to help them understand and craft their platform strategies. WW Norton published his book Platform Revolution in 2016 – this is his attempt to make the research accessible to a wide audience. It’s now in 10 languages, and Dr. Parker and his co-author are gratified to hear that people are using it to help inform their platform strategies. For more information, visit ggparker.net.
