THINK Week in Review: The “Local” Edition

To venture capitalists and the financial market, no business model is more attractive than a platform. A platform is essentially a marketplace that connects the supply side (goods and services) and the demand side (people who want to buy them). For example, Uber and Grab link riders and drivers, Airbnb links hosts and travelers, and Amazon links shoppers and sellers. The spectacular growth of these businesses has been commonly explained by “network effects,” a common refrain among economists and academics. They argue that the value of a platform depends in large part on the number of users on either side of the exchange. The more users a platform has, the more attractive it becomes, leading even more people to use it. And once a platform reaches a certain size, the thinking goes, it becomes too dominant to unseat. For some Platforms, Network Effects are no match for local know-how. “As the world embraces digitalization in transportation, aviation, health care, and energy, it is increasingly unattainable to conquer international markets with the simple switch of an algorithm. It was possible for Facebook, Google, YouTube, and Twitter only because of the nature of their businesses, where digital bits are all they deliver. But for platforms that involve any physical offerings, the future is looking more traditional than the past.” Good insights from Wharton: Six questions that can help guide Digital Transformation. “I think “culture” is one great word that describes what has to happen within companies. They have to develop new ways of working, really taking evidence into account when making decisions. Another is really figuring out how to integrate the business. What customers are expecting is a seamless experience, and you really can’t deliver that in the long term without using technology to integrate silos so that you’re able to share across the business. Externally, boundaries are more porous and leaders have to think about how they’re going to use partners to add things that their company doesn’t have.” Is this the answer to Open Banking in Europe? The American way of Open Banking regulation. “US banks should recognize that open banking is being embraced in markets around the world and determine how they want to move forward.  A good first step to embracing open banking is to build APIs, developer portals and ecosystem platforms with intelligent revenue-sharing models. Banks could gain competitive advantage as a first mover and innovator in this space and play an important role in the new era of platform banking. Those banks who take the lead will be better placed to compete with the tech giants now entering the financial services space.” How bosses waste their employees’ time. “Employees who start big programs are often celebrated, but rarely those who end old, obsolete and ineffective programs and practices. And managers who lord over big teams and keep adding underlings are rewarded with prestigious titles and big raises—even when their ever-expanding army of bureaucrats adds unnecessary rules and procedures that sap time and energy from people who do the most important work.” What your Facebook Network reveals about how you use your brain. “The idea that social brain networks expand with use is an important insight to consider in educational and workplace contexts. These observations suggest that providing access to wider and more diverse networks of social ties may fundamentally change the way people use their brains when making day-to-day decisions.” And, in case you missed it: The COOPER Fraud Analyzer launched into Pilot Testing.