My Reading List and the Economics of Platform Products
I’ve been reading the book Platform Revolution. I started reading it because a coworker sent the GetAbstract summary to me. I realized a few things quickly as I read the summary. First, these guys were well versed in an area that has been around for quite some time now. After all, Facebook, Amazon, Google, eBay, etc are all common case studies in workshops and business schools. Since then, I’ve found they all come from MIT IDE.
Secondly I realized that I didn’t study marketing from this perspective in my business school experience. The literature around this field was available for my graduate program only in HBR case studies, not in textbooks. And it wasn’t fully developed. This area of economics was and is still maturing. But it’s come quiet a ways in the 15 years since I graduated.
Finally it dawned on me that I work in an industry that adopted the platform model a half century ago, long before Mark Zuckerberg was born. And that industry has spawned and continues to generate platforms competing at multiple levels to generate and realize value in a competitive, growing worldwide trade and tourism marketplace. From Global Distribution Systems to Online Travel Agencies to Metasearch Engines the list is long and growing.
Since all this was so relevant to my job and career I thought I should be able to apply my learning to my space. I began where biz said to with strategy and Porter.
Michael Porter was (and likely still is) reigning king of business strategy in my program. And with good reason. His work on strategy and competition has defined how executives in entire industries think and compete against each other for dominance. His Five Forces model was the basis for nearly all strategy discussion in my classroom experience.
So it was familiar territory when the authors described the economics of platform markets using the Five Force model, but ascribing different strategic goals and reactions to platform versus traditional companies. This was so much fun for me that I decided to put it down into a table format for comparison and contrast.
I’ve included this table below along with some real-life industry examples. I hope this stimulates your thinking and inspires you to respond to this post. Let’s discuss.

Here are some examples of how travel platform companies (GDSs) have responded in Platform manner in the travel industry
TripCase partners with Uber to distribute content. A response to new entrants that includes expanding the value of the ecosystem by adding the new entrant’s value.
Amadeus adds destination content. An example of competing against platforms by increasing overall ecosystem value. Platform against Platform response.
Travelport adds application to reduce disruption delays. Example of Platform versus Platform competition.
