And although you can find your true love on Yahoo Personals, you still might prefer chatting up strangers on a Sunday walk in the Boston Public Garden.
When American Express decided to break into the business in 1958, it didn’t have the luxury of ramping up slowly.
So it built both sides of the platform by piecing together some small existing card programs, such as one operated by magazine.
Frank Mc Namara started a different kind of club in 1950: He invented the credit card. Without enough cardholders, merchants wouldn’t participate, and without enough merchants on board, customers wouldn’t bother to obtain a card.
A “member” of the Diners Club could charge meals at restaurants and pay the card company at the end of the month. Merchants were equivalent to the men in the dating club, and the cardholders were like the women, so Mr. American Express Company adopted this pricing model a few years later, and made a fortune. provides proprietary financial data via an electronic network.
Although pricing is important, it is only one element in the design and implementation of a platform strategy.
Apple Computer Inc., for example, lost its commanding lead in user-friendly computer operating systems because it picked the wrong platform model.
To see how complex and unintuitive optimal pricing in a platform business can be, imagine creating a mobile phone platform that you hope to scale up by offering third-generation (3G) broadband content to subscribers.
Should you price low to lure phone subscribers and rely more on the revenue from charging the content providers for access to your millions of customers?
We already know enough, however, to recognize that you’ll poke yourself in the eye if you apply the rules of thumb about traditional markets learned by every MBA candidate in the land.