David B. Yoffie

The Business of Platforms is an in-depth look at platform strategy and digital innovation.  In this book, we explore how a small number of companies have come to exert extraordinary influence over every dimension of our personal, professional and political lives.  We also question whether there are limits to the market dominance and expansion of these digital juggernauts.  Finally, we discuss the role governments should play in rethinking data privacy laws, antitrust laws, and other regulations that could rein in abuses.

The goal of the book is to help managers and entrepreneurs build platform businesses that can stand the test of time and win their share of battles with both digital and conventional competitors.  We argue that platforms can produce the fastest growing and highest profits companies in the world; and they can also become a formula for losing a fortune while threaten democracy and political stability.

We have five major themes in the book:

1)      The world’s most valuable companies are all platforms, in part because platforms have network effects, with the potential for a winner-take-all or winner-take-most outcome.

2)      Platforms come in 3 flavors:  innovation platforms, transaction platforms and hybrid platforms. We suggest that the world is moving towards more and more hybrids, and we identify the key steps in building a successful platform.

3)      Failure is more likely than winner-take-all: mispricing, mistrust, mistiming, and hubris lead to hundreds of failures compared to relatively few successes.

4)      Old ‘dogs’ can learn new tricks:  conventional companies can adapt to a platform world with a buy, build, or belong strategy.

5)      Platforms are a double-edge sword:  abuse of power, bullying poor labor practices and bad actors can undermine even the most successful platforms.

The book concludes with an exploration of platform battles of the future, including voice wars (Alexa vs. Hey Google vs. Siri), ridesharing and autonomous car platforms, quantum computing, and CRISPR. 

How does an entrepreneur, aspiring manager, or CEO become a master of strategy? In this book, we argue that everyone can learn from three of the greatest strategist of modern time, Bill Gates, Andy Grove and Steve Jobs, who also built three of the most valuable companies in the world. As individual personalities, they could not have been more different. Yet despite their differences, they shared a common strategic framework, which we distill into five rules and 20 principles that any ambitious leader can learn:

1)      Look Forward, Reason Back

2)      Make Big Bets, Without Betting the Company

3)      Build Platforms AND Ecosystems – Not Just Products

4)      Exploit Leverage AND Power – Play Judo AND Sumo

5)      Shape the Organization around Your Personal Anchor

Getting to the core of Apple:  In 1991 the computer industry had just experienced its worst year in history.  Although Apple had continued to outperform its competitors, the intense competition was putting acute pressure on its margins.  This case examines Apple's need to retain its profitability as the structure of the industry deteriorated.  Apple's CEO asked his staff key questions:  Could Apple change the structure of the industry, and if so how?  And what were the alternatives?

Why do some companies succeed in defeating stronger rivals, while others fail? This is a question that, sooner or later, all ambitious competitors must face. Whether you’re a tiny start-up taking on industry giants or a giant moving into markets dominated by powerful incumbents, the basic problem remains the same: How do you compete with opponents who have size, strength, and history on their side?

The answer lies in a simple but powerful lesson: rather than oppose strength to strength, successful challengers use their opponents’ size and power to bring them down.  This message is at the heart of Judo Strategy. Based on extensive research by Harvard Business School professor David Yoffie and research associate Mary Kwak, Judo Strategy introduces a ground-breaking approach to competition that shows companies how to win against imposing odds.

Using vivid examples from companies ranging from Wal-mart and Charles Schwab to Juniper Networks and CNET, the authors demonstrate how managers can translate the core principles of judo-a martial art that prizes skill not size-into a winning business strategy. By mastering movement, managers learn to seize the lead and make the most of their initial advantage. By maintaining balance, they can successfully engage with opponents and respond to rivals’ attacks. And finally, by exploiting leverage, managers can transform their competitors’ strengths into strategic liabilities.

Professor Yoffie’s research examines different aspects of strategy and technology. His most recent research has focused on three areas. The first research topic looks at the dynamics of cooperation and competition among “complements.” In a number of articles and cases, this project has looked at how companies such as Microsoft and Intel work together as well compete to grow the economic pie as well as divide industry profits. This research has been conducted with HBS Professor Ramon Casadesus-Masanell and Professor Barry Nalebuff from the Yale School of Management. Working with HBS Associate Professor Andrei Hagiu, a second stream of work is focused on multi-sided platforms (such as Google, which connects consumers to advertisers). A third stream, also with Professor Hagiu, is examining intermediation in intellectual property. This research explores why two-sided platforms have failed to gain traction in the intellectual property market, while new intermediaries, which we call “super aggregators” and “defensive aggregators,” are reshaping the market for I.P.

Over the last two decades, Professor Yoffie has written numerous cases on Intel, Microsoft, and Apple. In a new research project with Professor Michael Cusumano of MIT, the authors are examining what made Andy Grove of Intel, Bill Gates of Microsoft, and Steve Jobs of Apple three of the greatest strategists of modern times. This book-length project will explore the characteristics of great strategists, their common pitfalls, and generalize broader lessons for CEOs in any industry.

This course explores the unique aspects of creating effective management and investment strategies for technology-intensive businesses. What strategies can win in markets with strong network effects? How can firms leverage technology to build multi-sided platforms? How can firms create and capture value from intellectual property? What are the unique challenges of governing technology-intensive firms? And how can firms build and sustain competitive advantage in new, emerging technologies with high degrees of uncertainty?