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  <title>Why Some Platforms Thrive and Others Don't</title>
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  <namePart>Zhu, Feng</namePart>
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  <namePart>Lansiti, Marco</namePart>
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   <dateIssued>2109</dateIssued>
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  <extent>Hal. 119-125</extent>
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<note>In the digital economy, scale is no guarantee of continued success. After all, the same factors that help an online platform expand quickly--such as the low cost of adding new customers--work for challengers too. What, then, allows platforms to fight off rivals and grow profits? Their ability to manage five aspects of the networks they're embedded in: (1) Network effects, in which users attract more users; (2) Clustering, or fragmentation into many local markets; (3) The risk of disintermediation, wherein users bypass a hub and connect directly; (4) Vulnerability to multi-homing, which happens when users form ties with two or more competing platforms; (5) Network bridging, which allows platforms to leverage users and data from one network in another network. When entrepreneurs are evaluating a digital platform business, they should look at these dynamics--and the feasibility of improving them--to get a more realistic picture of its long-term prospects.</note>
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