Andrei hagiu, julian wright &
Learn how to rigorously evaluate the strength and defensibility of businesses built on network effects
Learn several methods for transforming regular products into platforms with network effects, as well as the pitfalls to avoid in such transformations
Content based on the cutting-edge research, consulting and angel investing experience of instructors.
Join a cohort of investors, start-up founders and executives in live interactive sessions
Professors at Boston university & National University of Singapore
5 x 2 hr live sessions
Price: $900 per seat
Full-time faculty with experience at leading universities
Andrei Hagiu and Julian Wright are leading experts on platform businesses and network effects, on which they have done research, consulting and investment work for over twenty years.
Together, they have published dozens of professional economics articles, nine Harvard Business Review articles, and a recently launched Substack newsletter, all focused on various aspects of platform strategy. They are also active angel investors in platform businesses, having invested in hundreds of startups and provided advice to many.
Andrei has taught MBA and executive education courses on platform strategy at HBS, MIT and Boston University for over 15 years. He has also consulted with ADP, Equifax, Hearst and Intuit – all on the topic of how to transform products into platforms.
Julian has taught executive courses on platform strategy and on winning with data at NUS and has consulted with Facebook, MasterCard and Visa.
with extensive experience investing in marketplace businesses
who have first-hand experience building platform businesses
who have experienced a successful product-to-platform journey
You will learn how to rigorously evaluate the defensibility of businesses built on network effects and how to transform regular products into platforms with network effects.
The instructors in this cohort have been doing research on platform businesses for over 20 years. They also have extensive experience consulting for and angel investing in platform businesses.
We don’t do prerecorded videos - you learn directly from the best in highly interactive sessions, so that you get a personalized learning experience.
Each cohort is a carefully curated group of executives, investors and startup founders.
Product, data and strategy specialists in businesses looking to leverage network effects when developing their platform strategy.
What leaders will learn:
Three methods businesses use to transform regular products into platforms with network effects
How to use data and design to prevent user leakage
Common pitfalls to avoid when attempting product-to-platform transformations
Entrepreneurs who face network effects in their start ups or have the potential to develop them by leveraging platform economics.
What founders will learn:
Effective launch strategies to overcome the chicken and egg problem
How to enhance network effects through product design
How to set prices in the presence of network effects
VCs and growth stage investors who are seeking to improve their ability to evaluate platforms, marketplaces and other businesses built on network effects.
What investors will learn:
Evaluate the strength and defensibility of different types of network effects
How data can compound competitive advantage and lead to winner-take-all markets
What sort of platforms produce the most attractive unit economics
Over the past twenty years, platform businesses built around network effects have become the most powerful businesses in the world. Indeed, today they include many of the world’s most valuable companies.
Not surprisingly, there are thousands of early-stage startups attempting to leverage network effects in order to become the next Airbnb, Facebook or Uber. And many established companies are also attempting to transform their products or services into platforms with network effects. Most of these projects will fail. Partly because of poor execution, and partly because of unrealistic claims and expectations about the defensibility that network effects can create for their specific businesses.
Participants in this course will learn how to rigorously evaluate business opportunities with network effects. We will apply this to both startups and large, established companies attempting product-to-platform transformations. In doing so, we will leverage economics concepts and frameworks that we have developed during our over 20 years of research on platform businesses, and that we use extensively in our consulting and angel investing activities.
Session 1 - Network Effects and Defensibility
Today, almost everyone knows that network effects, when present, can be a great source of defensibility and unfair competitive advantage. However, most investors, entrepreneurs and company executives don’t go beyond superficial statements such as “product X has compelling long-term defensibility via marketplace network effects”. This is a problem because there is huge variance in terms of how weak or how strong network effects are, and that ultimately determines whether or not they create defensibility and compounding competitive advantage. Accordingly, in the first session we will answer the following questions:
⋅ What are the various types of network effects?
⋅ What determines whether they are strong / weak and whether or not they create defensible moats?
⋅ What is the difference between network effects and virality?
⋅ How can network effects be enhanced by product design?
To address these questions, we will discuss a wide variety of startup examples from our experience as angel investors.
Session 2 - Data Network Effects
Similar confusions and hype abound about the role of data in creating sustainable competitive advantage. Accordingly, in the second session we will address the following questions:
⋅ What is data-enabled learning and what are the seven factors that determine the extent of compounding competitive advantage businesses can obtain from data?
⋅ What distinguishes data network effects from regular network effects and how do the two compare in terms of their ability to create a defensible moat?
⋅ What are effec tive launch strategies for products (platforms) with network effects (data or not) in order to overcome the cold-start (chicken-and-egg) problem?
Again, we will discuss a wide variety of startup examples from our experience as angel investors.
Session 3 - Transforming Products into Platforms (Part I)
In this session and the next we will analyze in-depth three methods that businesses can use to transform regular products or services into platforms with network effects:
⋅ Opening the door to third-parties
⋅ Connecting customers
⋅ Reaching out to customers’ customers.
This type of transformation is relevant for established (large) companies attempting to enhance the growth and defensibility of their products, for existing platform businesses that may be able to add another side to their platform, and for startups which are increasingly evaluated on their prospects of evolving into platforms with network effects after having reached product-market-fit. In fact, many successful platform businesses started off as product businesses before making the transition (e.g. Amazon Web Services, Apple’s iPhone, Intuit QuickBooks, Salesforce, Shopify, etc.).
Session 4 - Transforming Products into Platforms (Part II)
In this session we will discuss the pitfalls to avoid when attempting product-to-platform transformations using each of the three methods discussed in the previous session. And we will show to how to evaluate the key attributes that make some products more suitable than others for such transformations.
We will draw on many examples, both startups we have invested in and large companies we have consulted for on these issues (e.g. ADP, Equifax, Hearst, Intuit). And we will then apply the learnings to the participants’ own businesses.
Session 5 - Network Effects Aren’t Enough
In this session, we will discuss several other key strategic issues that we will not have covered in the previous sessions but that one needs to worry about when building or investing in network-effects businesses:
⋅ How to set prices in the presence of network effects?
⋅ How to prevent leakage, i.e. participants meeting on the platform but taking their transactions off the platform to avoid paying the platform its cut?
⋅ How much centralized control to exert on transactions between participants, which also determines how much responsibility the platform has when things go wrong?
⋅ How to deal with potential public policy concerns that are specific to digital platforms?
3 seats left! Enrollments to the program end on October 6!