(Book review published in Market Leader: September 2016)

Here are a few hours in the life of a modern everyman

I picked up my IPhone and Googled the location of my coffee meeting. Then I summoned an Uber and, on the way, planned my holiday on Airbnb. At our meeting we checked out a YouTube film and reviewed a Microsoft document. At the end of the meal I paid with my Visa card.

Matchmaking describes every brand mentioned above. Matchmakers (AKA multisided platforms) have integrated their way into every part of our lives. They connect members of one group (like people seeking a cab) with members of another (like taxi drivers looking for custom). Microsoft Windows connects app developers and end users. Visa connects merchants and customers. And so on.

It is not a new idea.

Women in ancient China connected potential brides and grooms, prefiguring the glut of online dating services today.  Bourses in the 18th century connected buyers and sellers of stocks and shares, just as E-bay today connects people with spare stuff with those who value it. The advent of the internet (along with faster processing speeds and high speed broadband on the move) that have turbocharged them, not least because matchmaker start-ups attract the big venture capitalists. Many of the high growth start-ups in the world are “Multi sided platforms” including Alibaba, Lending Club, Pinterest, Spotify and Tencent. The excitement about the sharing economy (and “unicorns”) is really the story of the march of the matchmakers.

A new book anatomises matchmakers– the circumstances in which they succeed and the new skills and capabilities needed to build and sustain a successful one. It’s packed with wisdom that you would not necessarily learn at business school. That’s why Matchmakers by David S Evan and Richard Schmalensee is a necessary read for anyone who wants to understand the future of the digital economy. Here are six pieces of wisdom and understanding I took away

  • Look for significant transaction costs that keep buyers and sellers apart and you have spotted the gap for a multisided platform. If it is time consuming or expensive or risky to find what you are looking for (house/holiday accommodation/partner in life/London Cab) then that is the space in which it a matchmaker can thrive.
  • Matchmakers are difficult to launch successfully because they have a chicken and egg problem. They need a critical mass on both sides of the platform to create value. It is not just about volume. The clue is in the original meaning of the word matchmaker. Amex’s launch succeeded because it connected enough successful people with the kinds of merchants that they like to use (High end shops, restaurant, airlines, hotels). When YouTube launched they needed “uploads” and “eyeballs” in sufficient volumes to become self- sustaining. Getting a platform to ignite into self-sustaining growth is the central challenge in the early years. YouTube’s founders had to work hard at encouraging people to upload and introduced design elements that made it easy to do. Platforms that fail to cross the critical mass frontier will fizzle out or run out of cash (See below)
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  • Both sides of the platform must have their interests looked after- getting the pricing right can be critical from the start. Often one side of platform does not pay at all as their presence in sufficient numbers is key to success. Searchers on Google do not pay just as women often do not have to pay to get into a nightclub.
  • Matchmakers end up as rule makers and have to worry about how users interact with each other. Uber drivers can rate their rides and vice versa. Airbnb have a very attentive customer service system to resolve disputes-for example when a renter has trashed the place. They have to be prepared to exclude bad eggs for the greater trust in the platform.
  • Matchmakers do not just launch tech platforms; they launch brands- a truly successful model for brand building that is not initially advertising led. Service experience and active communication to all sides are critical to building trust. Although investment in advertising is the servant of both growth and maintaining scale. EBay, Google and Airbnb all now use the classic advertising media.
  • Matchmakers thrive in a larger ecosystem. For example, Airbnb “sits on top of” Apples IOS operating system, which is also a matchmaker in the same way that Microsoft is. More broadly they sit within frameworks of regulation and other institutions such as trades unions and trade associations. Matchmakers disrupt (and thus come up against vested interests and opposition) which requires first class public relations.

“A multisided platform is one of the toughest business models to get right” say the authors.

It is surely, too, one of the most rewarding (if the venture capital they attract is a measure). Matchmakers is a 200-page handbook in how to do it.

The photographers gallery continues to be great value-For £3-00 you can see two great shows

  1. Make you look: Dandyism and black masculinity 

Joyful,liberating and gloriously subversive. People inventing and projecting their own style.Often if you have got less materially then you often end up wearing your wealth and projecting your own style.  Your art is your life- something that Oscar Wilde also understood. It is also by the way true of going out in Newcastle (rather than  London)- people dress up to the nines for a night out. Some of my favourite images


2) Terence Donovan – speed of light 

TD described what he did as “organised visual lying”. He was a great image maker. The people who sat for him enjoyed his company and relaxed. This shines through in many of the iconic image he created.

It is a nostalgic show – it reminded me of the 80s ad’ scene when consumerism boomed. TD got rich by providing images for both the ads and editorial during the golden age of glossy magazines-those vehicles of aspiration and desire- many of them no longer with us. Like Man about town- that became Town and then  disappeared IMG_7704.JPGan a

This film is worth a watch to show how WeChat-which started as a messaging app- is evolving into a one stop killer app for search,social and shopping. (And you thought Google and Facebook were too powerful.). It’s success is due not to Chinese govt support but innovation to make the user experience a) very easy b)integrated c) time saving.

You can be sure that Facebook and other are eyeing WeChat with envy and trying to emulate it

I expect the anti-trust authorities in Europe and USA to have a say on this trend

This is a (slightly extended version)of a book review I have just published in Market Leader (the Marketing Society’s quarterly journal :

It all started with such high ideals. The web was created as a kind of commons with the promise of a radical democratisation of power. As Rushkoff puts it – The distributed nature of the web, with its decentralised connectivity and ad hoc social activity seemed to augur an equally distributed marketplace. Markets were no longer going to be dominated by the best sellers and the big distributors. Instead an almost infinite market of makers would be able to find and sell to almost infinite market of buyers

This was the dream of “The Long Tail” set out by Chris Andersen in his book of the same name . The web would be essentially decentralising and empowering.

Rushkoff is vehemently against how it most of it turned out. Power Law dynamics took over. Tech start ups went public, went for growth to satisfy their shareholders, achieved positions of market power and decided to go into the advertising business big time. The Web turned out to be a winner takes all endgame fuelled by greed.  Californian Hippy idealism ran up against Madison Avenue and Wall Street.  As for the best sellers – well they remained the main sources of revenue on the likes of ITunes.

Rushkoff identifies are some honourable exceptions this trend – like eBay and  Etsy. These are examples of the many to many marketplace in action – what you might call genuine “digital bazaars”, which are essentially “anti-industrial”

Web idealism resurfaces in ideas like “the sharing economy” -but Rushkoff is dismissive: It’s not really sharing it’s selling…. encouraging people to engage in freelance versions of previously regulated industries. Technology is reducing the numbers of jobs and is now AI is hollowing out those of middle income folk. Left unchecked it will just make the rich few even richer. There will not be enough income around to buy the products of a consumer society. And that could lead to a big shock.

The solution? Rushkoff sees it as a kind of third way between unregulated markets and socialism. Called Digital Distributionism, it will have the following characteristics: Sustainable prosperity, platform cooperation, P2P and Bitcoin currency, crowdfunding, collaboration, communication via networks, land and resources held in common and value exchange. Government intervention will set wages and redistribute wealth to the underemployed.It sounds like Rushkoff has never really lost his idealism and is looking for get back to first principles and re-present them today.

Rushkoff addresses the increasingly apparent ills of our age-addiction to the mantra of growth, that depletes our resources, and the increasing evidence that Capital is doing much better than Labour. Is he hopeful? Not really. Digital Distributionism sounds at best difficult to implement and at worse very naïve. But, as the American elections show, disaffection produces surprises. When the middle classes are suffering there is trouble ahead and politicians will need to reach for new ideas. This book is packed full of them. Some of them might work.



Here is my short film that attempts to do this in just 7 minutes i made it  recently to explain some of the key ideas- it was commissioned by my client Danone Nutricia, who are happy for me to share it, bless ’em

Another excellent conference and excellent value

Here are  a few  things i took away

Steve Hilton may sound modern (took his shoes off in public/wore T-Shirt etc)  but his ideas are really a reworking of ideas launched by the levellers in the 16th Century, and developed by Romantics in the 19th century- he wants things on a human scale and thinks that big things (Govt /Big Business) are (mostly but not always) in opposition to this ie are dehumanising. Romantics said similar things about the factory system. Steve’s plea that we should turn offer our mobiles and get back to nature could have come out of the mouth of Wordsworth ( if mobiles had been around then). A man with interesting things to say but you would not want him running anything – much that makes modern life enjoyable and safe is the product of big business and big government. Steve may be right about back to nature- it’s just a really old idea. I notice that hipsters/visionary policy wonks rarely acknowledge the intellectual traditions that they draw on.

Baroness Susan Greenfield talked about the plasticity of our brains ( how each of us is encoded with memories from our individual experience ). Interesting bit for branding people is how different senses (sight,sound,touch,smell/taste) are processed in different parts of our brain. Sight ( ie reading and following narratives) in the front of our brains. Sound and smell in the deeper more primitive parts of our brain. A strong brand/category should try to encode memory through all the senses. That’s probably why we love coffee shops: they satisfy all of the senses from the story of the heritage, to the smell of the coffee, to the sound of the artfully chosen playlist coming out of the speakers. In Starbucks you can even feel the coffee beans

Richard Watson: the idea that AI can replace humans is largely fantasy as you can’t code a machine to learn  a combination of  unpredictability, individuality and imagination.The problem with self driving cars is not the tech but the unpredictability of the humans the cars might bump into.  A more likely future is the increasing use of AI tools to support human efforts. In fact we already do this when we search on Google or use face recognition on Facebook. Doctors will use AI to make better diagnoses. But a machine wont be able to read the will of a patient to get better. The film ‘Her” is worth seeing as a credible dystopia of a world in which we will be served by AI “personal assistants”. Some shopping/organising of our lives will be done for us by these in the future

Russell Davies: The problem with technology is not humans- we as individuals adopt and adapt all the time- it is organisations. Big ones are very bad at it ( hence all those failed Govt IT projects) and the ones that are good at it have tech in their culture.(Tesla, Google, Amazon etc)  Basically you can’t plug in new technology into an organisation led by people who just “don’t get it”. These are the types of people who (earnestly) go to a seminar about the impact of social media but have a Facebook account which they rarely bother to look at. They know they should know about it – but they don’t live it. This describes much senior management today