Understanding Size And Scale In Platform Business 

The internet might seem like a lot of things but at its core function it is an information delivery and communications platform, a unique hybrid of what has historically been two very separate businesses and worlds. The internet’s infrastructure is the first in platform business to combine this, essentially the functionality of the other five platforms in our world which include broadcast/cable TV platform, print media platform (newspapers and magazines), radio platform, PSTN (landline) phone platform and cellular (mobile) platform.

While the internet can and will deliver voice phone calls via mobile device, replacing the cellular platform, it is currently run in tandem with it in our world.

These things above are why the internet platform was created and why it is here. It’s a better platform for delivering information and providing communications service to people. For telecom carriers who footed the bill to bring it to the consumer market, it offered lower costs, higher margins and the opportunity for expansion.

But while the internet platform might seem as if it has endless reach and every site has the potential to get millions and billions of users, its simply not true. While the platform does have a broader and easier global reach than any platform to date, the same truisms of platform business still hold true in that only some people will use what’s available to them. A range of other factors come into play from here — provisioning packets, geographical location and all kinds of other stuff. But in general, things only grow so big in business and that applies to things on the internet too.

An aspect that has made understanding size and scale difficult within the market has also been the platform’s dual functionality. Information business and communications business are two very different, very separate worlds with different models, consumer motivations and scale. Information distribution is another story, but when it comes to ‘content’ business, it does hold true. There’s a reason why the largest print newspaper in America has a million subscribers, and why the largest phone carrier has 96.57 million. And this with the newspaper’s print edition being accessible, more or less, by anyone in the world (albeit with a wait for those who are not in the U.S.).

Communications and distribution are ultimately services on a platform and they tend to grow very large (or can). Content and media can, but in general not nearly as much as services do. Where business has struggled with understanding the internet and business on it has been because most in the market lump everything together when in reality despite being a unified platform environment, the businesses on it are very separate and different still. And with this, the size and scalability too.

While all companies on the internet have the option to take advantage of the platform’s dual functionality, each has its own core functionality it fits into. How it can grow, and to what degree or size, depends on this first. From there, things will only grow so big based on where and what they are in the platform business environment. This has been a truism over every platform to date, despite multiple innovations, new platforms and disruptions and will hold true with the internet too.

The better and more clear, concise understanding of this above, and where companies fit in, will make it easier to recognize where and what can scale, how large it can grow and likely how big (or not). To date, its been assumed that just because one thing on the internet can or has grown big, everything can. It’s simply not true. While this is becoming increasingly better understood in today’s market, recognizing what things are over information delivery and communications platforms, and what’s held true in platform business is a fairly reliable base point to work from.