From the authors of “The Second Machine Age”, which is a must-read-book for every CEO who truly wants to understand exponential and reinvention. It is one of our anchor books in most sessions we do with Bookbuzz clients.

High hopes

I had high hopes for their latest book. It is no “The Second Machine Age”. In some ways, it is a repetition of the theme. It is a version of “The Third Wave” or “Platform Revolution”.

The core message

AI is going faster than expected, machines are getting smarter and smarter, we are all connected, platforms are taking over, open innovation and co-creation are the names of the game, there is wisdom in the crowds and it will happen in your industry too. Using the usual examples (which is in itself is an indication that the platforms are taking over and winners take all) such as Airbnb, Facebook, Google, Uber, Alibaba, Amazon and Kickstarter.

Covering a lot of topics

Network effects, Polanyi’s Paradox (tacit learning), stage 1 and stage 2 thinking, neuroscience, HiPPO, experts, forecasting (they researched 82,000 expert forecasts, and found that they barely bests a chimp throwing darts), Moore’s law, iteration versus long range planning, reinforced learning, gaming (they teach AI to play games and use gaming as a way for AI to solve problems), big data, level 5 autonomy, deep Q network, “Cambrian Explosion” in robotics, 3D printing, dreaming androids, caveman principle (try to imagine an all-digital, artificially intelligent girls’ soccer coach), bundling and unbundling, friction, O2O (online to offline), reputation systems, noncredentialism, blockchain, DAO (a “Decentralized Autonomous Organisation”, read “Reinventing Organisations”), biomimicry, etc.


Biomimicry is particularly interesting (and a growing topic in business). As the book points out, bones, exoskeletons, and other structures in nature are the winning entries in evolution’s ancient, relentless competition, the outcomes of which are literally life and death. Evolution has resulted in marvellous designs.

So perhaps we should not be too surprised that when generative-design software is given the task of designing an optimal structure to satisfy a set of performance requirements, it comes up with something that looks as if it came from nature.

What can we learn from platforms in particular?

First, they have only been possible in the last ten years or less. Enabled by a mix of GPS, mobile and cloud.

Successful platforms put much emphasis on customer experience, customer support, removing friction, troubleshooting and problem resolution. They are all critical activities, not least because bad word of mouth spreads quickly. If that is of interest, read “X: The Experience When Business Meets Design” by Brian Solis. Experience as a strategy. Joe Pine would like that.

Other lessons:

  • They are early to the space.
  • They take advantage of the economics of complementary goods whenever possible, realising that low prices for one complement lead to increased demand for others.
  • They open up their platforms to a broad range of contributors and contributions.
  • While they maintain a broad rule of openness, they also curate their platforms

Platforms work in undifferentiated experience

Why have platforms deeply disrupted the business of travelling around cities, but not the business of staying in them? The reason is that getting a ride across town is a largely undifferentiated experience (going from A to B) staying overnight is definitely not. Read “Difference”.

Platforms are coming your way

Just because that large platforms are winning does NOT mean that large companies are safe. On the contrary. The message of the book is that these effects (machine, platform, crowds) will start happening in every sector, industry or market. There is an influx of young companies that bear little resemblance to the established incumbents in their industries, yet are deeply disrupting them. These upstarts are platforms, and they are fearsome competitors. Using the rookie advantage.

Your business is so proficient, knowledgeable, and caught up in the status quo that you are unable to see what’s coming. It is called status quo bias.

Which is why they are coming for you. They will fundamentally transform the world we live in. Science fiction is now next door. And yes, the best way to predict the future is to invent it.

You can do it

The good news is that human abilities, excellent goods and services, and strong organisational capabilities remain essential to business success. You just need to combine that with machines, platforms and crowds.

The questions to ask

The book explains AI, machines, platforms and crowds in detail and is in that way nearly (too) academic. The best part of the book is the questions it asks at the end of every chapter. Here are questions you should consider:

  • Are you tracking the performance over time of your decisions, judgements and forecasts by people and algorithms?
  • Is your organisation suffering fro the HiPPO syndrome?
  • What are your most important pattern-matching, diagnosis, classification, prediction, and recommendation activities?
  • Which key decisions or operations, if any, would you consider turning over entirely to artificial intelligence systems?
  • What would happen if your competitors start applying machine learning?
  • What aspects of your organisation’s work are most dull, dirty, dangerous, or dear? Have you looked recently at robots or other automation that can help with this task?
  • In your innovation and prototyping work, how are you taking advantage of the new technologies for making things?
  • How much boring, routine work do the most creative and innovative people in your organisation have to do?
  • Where would better human connections most help your performance and that of your organisation?
  • Of the tasks currently being done by humans in your organisation, which will be the hardest for computers to take over? Why do you believe this?
  • Looking at the existing tasks and processes in your job or organisation, what do you see as the ideal division of work between humans and machines?
  • Where are the next places in your business where you can apply free, perfect and instant?
  • What are the most important digital platforms in your industry today? What do you think they will be in three years?
  • Put yourself in the shoes of some of your archetypal customers. Compared to the status quo, what to them might be a more attractive bundling, unbundling, or re-bundling of your offerings together with others?
  • What are the possible complements for your offerings? How can you best use them to increase total demand?
  • Does it make more sense for you to try to build your own platform, or to participate in someone else’s?
  • What are your guiding principles for delivering a compelling user experience? Again, highly recommend you read “X: The Experience When Business Meets Design” by Brian Solis.
  • What’s your strategy for cooperating or competing with a platform that brings network effects and revenue management capabilities to your industry?
  • Compare the user interface and user experience of your online offerings to those of the dominant platform in your industry. How do they stack up?
  • Are you confident that you can continue to differentiate your offerings as platforms spread? If so, why? What are your sustainable sources of differentiation?
  • How and how often do you look outside your group of identified internal and external experts for help with your challenges and opportunities?
  • In the past five to ten years, have you expanded the number of people that you or your organisation regularly interact with?
  • How and how much are you using the crowd?
  • How might an open, transparent, global, flexible, immutable ledger be valuable to you?

Helping you to reinvent your business

Through the lens of machines, platforms and crowds, it covers business models, organisational design, technology, innovation, product, customer experience and marketing.

Maybe it is as good as “The Second Machine Age.”