Ray Ozzie: Software Platform Economics

Ray Ozzie writes about how software platforms evolve — or don’t (largely dependent upon the how committed the investors are — coupled with flawless execution, of course!).

Platforms require an “invest until it hurts, and continue doing so” state of mind, until such time as the platform reaches practical ubiquity. Investment creates a significant barrier to entry, and every dollar invested is a dollar leveraged many times over by the ecosystem and, if properly managed, by self.

Lots of parallels to service platforms also. Most payment-related businesses, for example, involve the same chicken and egg issues with the potential for exponential adoption once critical mass is achieved. PayPal is the most recent, successful example. As I recall, PayPal spent roughly $200 MM on customer acquisition through their bounty signup program.

This site uses Akismet to reduce spam. Learn how your comment data is processed.