… All platforms connect multiple market participants and can get big fast if they generate
strong network effects and do not have a lot of digital or conventional competition. But there …
In fact, we estimate 60% to 70% of the billion-dollar private “unicorn” companies are
platform ventures.But “platformizing” (creating a platform) in a “bad” business (an industry
with low profit margins due to high costs, low entry barriers, or other structural factors) does
not make it a good business. Profits depend on supply and demand, which impact prices, as …

Uber and Lyft, as well as Airbnb, WeWork (We Co.), and other sharing-economy startups,
offer valuable services, albeit with different levels of financial success (see “The Sharing
Economy Meets Reality, Communications, January 2018). What most of these ventures have
in common is they function as transaction platforms. That is, they bring together two or more
market sides to exchange information, goods, or services, including advertisements. The
businesses can grow rapidly through the power of network effects whereby one market actor …