Competing on Platforms

An online platform’s success is dependent upon providing sellers with a large base of potential customers while providing customers with a broad range of easily searchable offerings. For sellers and advertisers, entry costs are low. For buyers, there are none. The platform’s goal is to capture the largest market share relative to other platforms—a winner-takes-all strategy. Platforms have almost godlike powers. They are gatekeeper, rule maker, judge, and jury. For businesses dependent on a platform, this creates a dangerous situation. This article suggests finding a balance, but also: offering products or services in multiple channels, using the platform to market yourself, trying to game the system of algorithms that govern the platform, and diversifying your income streams.