Platforms are pretty interesting for a lot of reasons. First, there’s abstraction. Without it, we’d be stuck with a ton of little tasks that all overlap, and we’d never get anything done. For example, without abstraction, driving a car would be such a specialized skill that it’d become a full-time job. But by making cars simpler to use by abstracting their inherent complexities, it’s possible for anyone to drive them.

Then there’s the network effect. Basically, platforms get more valuable as more people use them. When more people join, it becomes more attractive for producers to offer services and products, which attracts even more consumers. It’s the essence of the viral loop, and it’s what makes platforms so enticing to businesses.

Finally, there’s centralized governance. In today’s world, there are a lot of complex data privacy rules and security concerns. It’s important to get the governance right and make sure it applies to everything in the same way. This can be really tough to do across a bunch of different sources and services, but platforms make it possible to get everything right in one place and use it across the whole business.

There’s a ton of content out there about platforms and their benefits. Some of the biggest platform companies, like Amazon, eBay, Facebook, Twitter, Shopify, and Stripe, have been really successful and that’s why a lot of businesses are looking to platforms as a way to expand, transform, or grow their operations and market share.

I’ve been involved with platforms in many different ways over the years, from building a platform for loyalty points transactions to writing my first mobile apps on Android to becoming a platform product manager. They’ve always fascinated me with what they enable us and the world to do.

One of the areas that has become more interesting to me has been the field of platform product management and its differences with other product management disciplines – not necessarily better or worse, just different. While traditional product management focuses on developing products that meet customer needs and generate revenue for the company, platform product management involves creating a platform that enables the exchange of value between different groups of users. This requires a different set of skills and strategies, such as building a strong ecosystem of users and third-party developers, managing network effects and balancing the needs of different user groups.

But first, let’s agree on what we mean by “platform.” According to Geoffrey G. Parker, Marshall W. Van Alstyne, and Sangeet Paul Choudary, a platform is a business model that creates value by facilitating exchanges between two or more interdependent groups, usually consumers and producers. Basically, it’s an online marketplace that lets people buy and sell things or consume content from other users. Platforms make money by taking a cut of each transaction or by charging fees for premium services.

There are actually different types of platforms, depending on whom you ask. For example, Choudary categorizes them as transaction, innovation, audience, infrastructure, investment, and social platforms. Van Alstyne splits them into transaction platforms, which facilitate direct exchanges and enabling platforms, which provide tools and services that help others create value.

In the next section, we’ll take a look at ecosystems and why they are important for the success of a platform.