Platforms As Governments

My partner Brad wrote a very interesting essay on the USV blog this week that I'm not sure got enough attention. In it he asserts that we should be looking at big tech platforms like Apple, Facebook, Twitter, and Craigslist as governments. He says:

A lot of people have begun using the term ecosystem to describe these
big platforms. That captures their decentralized, emergent character,
but ecosystems do not have a central point of control. Apple decided to
eliminate third party analytics between one release and the next. That
doesn't happen in an ecosystem. The right analogy is a government.

And then Brad goes on to describe what kinds of governments he thinks Apple, Facebook, and Twitter are like. He ends with a look at Craigslist and how we can all learn from the approach they have taken.

It's a really interesting post. I'd encourage everyone to go give it a read.


Comments (Archived):

  1. Harry DeMott

    Thanks for the link to Brad’s piece. Very interesting stuff. I put up a few comments. I’ve never really gotten the idea of people expecting the data they provide to be theirs exclusively. If you want exclusivity – don’t post it online – and then see if there is real value for you insights and personal lifestream. Unless you can get reality show contract – my guess is that the internet has taken data that has heretofore had little value – and by aggregating it and distributing it to the people for whom it does have some meaning – has created a ton of value. Whether some of that value is captured by the platforms is almost irrelevant to my way of thinking – I am providing value – and am receiving value – and I can opt out at any time. A pretty fair trade in my opinion.

    1. Stephanie

      But the platforms as they are configured today are the sole financial beneficiaries of my “property”, namely my profile. Are you comfortable with that? I’m not! And my new company is doing something about that!

      1. Harry DeMott

        If you can find a way to benefit from your property – that’s fantastic.That said – I have no problem with any of the platforms benefiting financially from my profile – because I feel that I am getting something out of it as well. It’s not cash – but it is the service. It is kind of like a traditional media business. TV companies show us Lost and 24 and benefit from selling advertising against out “property” which is out time and attention. I’m okay with this trade-off – but I can see why people might not want to be because in the online world – particularly with social media – what you are contributing to Facebook – or any other service is so overt – as opposed to something intangible like your time or attention.

  2. MattCope

    If only real governments showed such restraint in spending as Craigslist…

    1. Fred T

      Let’s just say Craigslist is a self-sustaining autonomous government in itself.

  3. CJ

    Government is a monopoly on the use of force.Companies may (and do) lobby to influence how that force is used (mostly against their competitors, or any new upstarts) but they do not wield the club themselves.So there’s a BIG difference between a company and government.The only exception is when a company is granted a special monopolistic license by the government (like the post office). In that case, the platform is like a government since all competition is banned by law.

  4. Nick Giglia

    Really interesting analogy…These companies are free to provide their platform in any way they choose, and people working with them have to abide by the regulations. It’s very much like a government…thanks for bringing this to our attention, Fred.

  5. kidmercury

    boy, i’m telling you, you guys are on the brink of going completely and utterly kook. when you start talking platform = government….i mean, it’s time to start investing in 9/11 truth shirts and tin foil hats at that point.i always knew you guys had it in you, that’s why i been bullish on USV all these years. it was great to get the confirmation though.of course always remember why i’ve made it my life purpose to ruin everyone’s mood with bad news: without the consciousness shift to the post nation-state mentality, we will not be able to create the new world order of internet governments. put more simply, we won’t get the good stuff (internet economies) without creating a global governance system that ensures world peace (the consciousness shift). IMHO the easiest way for internet folks to do their part in creating world peace is to work to recreate global monetary policy via virtual currencies and virtual governments, and to manage monetary policy in a way that will make war impossible to finance. as war is an economic negative (meaning it destroys value) it can only be financed by widespread theft — this is most easily obtained when the money supply can be infinitely expanded and thus theft by inflation is always an virtual currencies become a bigger part of monetizing virtual communities/governments, it will become increasingly important for us internet folks to be wary of the threat that “real world” government (i.e. the people who lie to you all the time) poses to regulate this opportunity out of existence. there are a variety of ways to defend against legislation risk:1. federated models; this allows for greater distribution/decentralization. greater decentralization will IMHO require greater decentralization of profits — this is where current many investment models are unfeasible, and where the disruptive strength of the ycombinator model may become more visible.2. understanding that the federal reserve system is unconstitutional, and understanding all the current laws about money and monetary policy. the truth of this matter can be very psychologically challenging. i don’t know what to tell you folks. only the truth can set you free.9/11 was an inside job,kid mercury

  6. Bob Warfield

    It’s a good article. I’ve been writing about analyzing platforms as governments for years. The best platforms behave like Switzerland:http://smoothspan.wordpress…Cheers,BW

    1. David Semeria

      Being Swiss is easy. Anyone can do it. Just focus on ‘us’ and forget about ‘them’Switzerland is the country that kept its nose clean and never got involved.If your best mate is Switzerland, and the shit hits the fan, you’re totally farked.

    2. Dan Ramsden

      I am reminded of the Orson Wells character in The Third Man, regarding Switzerland. 500 years of peace, love, and understanding, and what do they have to show for it: the cuckoo clock. It was a very famous line in the movie. Come to think of it, may have some analogy in Brad’s article.

  7. Phanio

    Very interesting read comparing these businesses to government. In the end it is all about control – who will come out on top. I just hope that they also realize that new companies are/will be bitting at there heels – overcoming the control issues that these firms are starting to exert – just like they did when they first got started.I like the craigslist example the best – let the people (user) decide what is best for them and how they want to use the service.

  8. Mark Essel

    It was instapapered on my to read list when getting back. Glad I visited it today, interesting way of viewing the role of platforms as governments but not much attention paid to the rights of the user/content creator. Very interested in platforms that encourage app creation and ownership. Many devs look to be new mini platforms over service providers on another platform if for nothing else than control of their own fate.Great comments.

  9. Dan Sweet

    Interesting thoughts, I especially liked the link to the video of Jobs acting crazy.I find it ironic that a VC’s conclusion would be operate like Craigslist. From what I’ve seen, nothing venture-backed gets run like Craigslist much beyond the seed stage.

    1. fredwilson

      we’ve written this a bunch on our blogscraigslist is an inspiration for us at USVwe’ve learned so much from that business

      1. Dan Sweet

        did a quick “craigslist” searchmust have missed this one during one of my google reader amnesty moments:…i def remember this one one though – an all time favorite:…i see elements of the thinking in the execution of as well. interesting.

  10. vruz

    let it be noted – before people overreact – that Brad’s is an *analogy*.he’s not suggesting Apple, Facebook or Twitter should govern us.this is helpful because it’s important to tell what is your role in an ecosystem.are you building a platform? are you running a shop on top of a platform?is the monarch your best friend, or counterproductive to your own platform?ask the right questions and you may get some answers.

  11. Evan

    It’s a provoking post, but do I think that Brad’s view of FB, Apple and Twitter was determined by his web-services-as-govts analogy or do I think Brad used his analogy to explain his pre-existing thoughts about FB, Apple, and Twitter?Put me down as the latter.

  12. Anthony Ortenzi

    I’m sure some might rightly consider Apple’s app store stranglehold like the Great Firewall of China. I thought Steve wanted a different kind of cultural revolution.

  13. Eric Alterman

    Great post.

  14. Taylor Jacobson

    Recent policy decision by Steve Jobs to ban porn apps seems to support this argument: http://humantrafficking.cha

  15. kidmercury

    indeed! if any fredlanders would like to purchase my labor, it is for sale. copywriting, project management, photoshopping, online forum management, sell you some gold (always a favorite of mine), are among the many options. of course, my true passion is the business plan that saves the world, so if i can be closer to that, that would be preferred.folks can visit me at www [dot] informedtrades [dot] com for my “real world” identity.thanks for the setup charlie!

  16. ShanaC

    make that two charlie – I just graduated. Time to be an adult now.