Networks and the Nature of the Firm
Tim O'Reilly
1.3K53

These last two bulletpoints are especially spot-on to my view:

When you open the market to an unlimited number of suppliers, you must invest in reputation systems, search algorithms, and other mechanisms that help bring the best to the top. Simple, easily gamed reputation systems are table stakes; over time, more sophisticated curation will be necessary.
Internet era networks don’t just seek to eliminate workers, they seek to augment them. Invest in software that empowers your workers, allowing them to multiply their effectiveness and to create magical new user experiences for customers.

Why? They accurately diagnose the problem with many networked companies — and this problem is as much ideological as it is practical or commercial. Many on demand companies are built on magical user experiences for customers THROUGH poor experiences for workers. Rather than solve a two-sided problem, as a marketplace and network should, they elevate the needs of one side over the needs of the other. TaskRabbit comes to mind.

As the tools to connect with customers are democratized, and as these networks develop reputation systems that are “portable” or that facilitate existing reputations and trusted networks, independent workers will be able to circumvent the networks that sap, rather than create, value.

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