How platforms die: the decay of a unique value proposition

How do platforms die? That’s what journalist, activist and sci-fi author Cory Doctorow explores in a provocative article. A must read for anyone in digital marketing and technology to think about.

Here is how platforms die: first, they are good to their users; then they abuse their users to make things better for their business customers; finally, they abuse those business customers to claw back all the value for themselves. Then, they die.

Firstly, surpluses are “directed to users; then, once they’re locked in, surpluses go to suppliers; then once they’re locked in, the surplus is handed to shareholders and the platform becomes […] useless”.

This process, when pushed to its limits, leads to the erosion of the unique value proposition. For marketplaces, this process of exhaustion happens to both users and brands: they become victims of a form of “coercion” and monopoly.

Doctorow cites Amazon, Facebook, and (now) TikTok as examples of platforms that are currently undermining their unique value proposition and keeping their platforms alive through locked-in techniques.

But there is a downside to this strategy. As Doctorow notes, “[e]ven the most locked-in user eventually reaches a breaking point and walks away, or gets pushed. “

This is what we are beginning to see with Facebook. According to Forbes, the platform is experiencing a decline in daily active users.

And you, how do you feel as a user of these platforms?