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Jonathan Knee has written a iconoclastic yet worthwhile book debunking modern-day business myths about network effects, platforms, and technology companies in the brave new digital world. Knee explains why not all digital businesses are made equal even though they may appear to enjoy very similar business models — for example, AirBnB and Uber. Or, how businesses that appear to be in the same market, such as travel (Priceline and Expedia), are in fact very different. He also debunks the fear that because some companies are integrating backwards, into their suppliers (e.g., Netflix producing its own content), it doesn’t mean they are improving their business models; in some cases, they are weakening them. He casts doubt on the long term value of some of the most powerful digital businesses, even as he lavishes praise on a few, such as Google.
Knee focuses on the fundamentals of what makes great businesses: competitive advantage, first articulated by Michael Porter in the late 1970’s. He fine tunes Porter’s principles for application to modern digital businesses to show that tried-and-true strategies are not altered by the internet. In fact, his book at times reads like a paean to Porter!
The Digital Platform Delusion
Knee throws down the gauntlet at the outset: the extent of a business’ platform-ness…