The ‘platform paradox’ refers to the dilemma faced by digital platforms, which increase in value as more users join, but also become harder to manage and risk losing their core functionality. This tension between scale and value is a central challenge for platform businesses, such as Uber or Airbnb. While these companies have seen tremendous growth, they have also faced issues relating to quality control, regulatory compliance, and user satisfaction.
One solution is to maintain a balance between openness and control. Platforms need to be open to attract a large user base, but they also need to exert some control to ensure quality and compliance. This can be achieved through rating systems, community standards, and other forms of user feedback.
Another strategy is to focus on core functionalities and resist the temptation to expand into too many areas. Platforms that try to do everything often end up doing nothing well. Instead, they should concentrate on what they do best and continually improve it.
Finally, platforms must recognise that they are not just tech companies, but also social systems. They need to understand the social dynamics of their user base and design their platform to facilitate positive interactions. This requires a deep understanding of behavioural economics and social psychology.
In conclusion, the platform paradox can be managed, but it requires careful balancing of scale, value, and social dynamics.
Go to source article: http://techcrunch.com/2015/11/28/the-platform-paradox/