Two Step: max value for entire ecosystem created by platform -> max value extracted for platform.
Besides using pricing as a way to regulate and influence platform participants, platform owners have a range of non-pricing tools.
1. Increase/decrease affiliation barriers (entry barriers)
a. Restrict participant access [promote growth, reduce negative externalities to find the “right” type of affiliates]
i. Pricing (set a fee)
ii. Non-pricing (group, industry, category, invite-only)
b. Improve documentation and usability
i. Additional information
ii. Easy to navigate [Website refresh]
c. Define competition among affiliates
i. Winner-take all approach [market concentration of winner or only-one policy]
1. Funding awards
a. Ex-ante (participants submit an idea, the best idea get’s funding)
b. Ex post (participants all work on the same idea, the best execution get’s the funding)
2. Certification programs
3. Certification applications
4. Information share:
a. Ranking of developers [based on number of applications, number of kudos drive incentives on how they work]
b. Ranking of best application
5. Setting rules for facilitating interaction between affiliates (seller/seller, buyer/buyer, and seller/buyer)
d. Limit/Encourage interaction between participants [smaller network groups]
i. Community events
ii. Platform specific benefits for affiliates [differentiation from stand along channel where seller affiliates interacts directly with buyer affiliates]
iii. Encourage exploration rather than find and go [Where to implement this in a developer community]
e. Management of reputation and former affiliates
Developer motivations [Thus a cash prize may only affect on aspect] Thus need to non-pecuniary incentives.
• Intrinsic
• Learning from work
• Career concerns
• Status
• Community recognition
• Community affiliation
Extreme competition is itself a great motivator for developers.
Source. Platform Rules: Multi-sided Platforms as Regulators Kevin Boudreau and Andrei Hagiu.
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