Module 4 - Platforms

Question 1

Platform

Answer 1

a business that creates value by facilitating direct interactions between two or more distinct types of customers.

Question 2

Direct network effect

Answer 2

an effect that occurs when the value of a product, service, or platform increases simply because the number of users increases, causing the network itself to grow (this definition is from Harvard Business School’s Online Blog).

Question 3

Indirect network effect

Answer 3

an effect that occurs when a platform or service depends on two or more user groups, such as producers and consumers, buyers and sellers, or users and developers. As more people from one group join the platform, the other group receives a greater value amount (this definition is from Harvard Business School’s Online Blog).

Question 4

Asset

Answer 4

a resource with economic value () that an individual, corporation, or country owns or controls with the expectation that it will provide a future benefit. An asset can be thought of as something that, in the future, can generate cash flow, reduce expenses, or improve sales, regardless of whether it’s manufacturing equipment or a patent (this definition is from Investopedia).

Question 5

Platform scaling

Answer 5

the process of growing and expanding platform in a profitable way. Scaling may refer to scaling transactions (i.e., making sure that transactions are frequently repeated as well as new transactions happen), scale user/customer base may refer to growing the number of users/customers. Important to remember that scaling means growing your revenues faster than costs.