It’s said that Uber is the world’s biggest taxi company, even though it doesn’t own a single taxi. Facebook is the world’s most popular media company, even though it produces no content itself. Alibaba is the world’s most valuable retailer, even though it has no inventory. And Airbnb is world’s biggest accommodation provider, even though its owns no real estate.
4 Underlying the enormous growing power of platforms are network effects. The value of a platform for its users grows as the platform grows. Each new user also increases the value of the platform for old users. Successful platforms have succeeded in creating a virtuous circle, which feeds on itself. New digital technologies have removed constraints on growth, enabling rapid scaling of business operations.