Why Platform Disruption Is So Much Bigger than Product Disruption

hbr.org

New products change what we buy, but new platforms have much broader effects.


"Product-based disruptions have a strong “within the industry” effect; after all, being a serious threat or replacing the incumbent is a big deal. But platform-based disruptions have effects not only inside the industry but also well beyond industry boundaries. They can create strange competitive bedfellows as companies in different industries are affected, which is the case for many marketplaces such as Amazon or Alibaba, where competitors act as buyers and sellers at the same time. They can even cause industries to collapse, as in the notorious case of Craigslist and the newspaper industry. And they can enable massive numbers of people and businesses to make money from excess capacity (like a guest bedroom that you never use or a passenger seat that often sits empty), ideally reducing waste and increasing people’s incomes at the same time."

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