How Platform Businesses Work

UBER, Airbnb, Etsy, Alibaba, Medium, Kickstarter, eBay, Kaggle, Stackoverflow, News Deeply, etc. — they are all examples of successful internet platform-businesses most of you are familiar with. Today, however, I would like to introduce you to a less well-known organization and ‘platform business’ known as ‘The Good Judgement Open’ (GJOpen), and explain how it works. The reason why I chose GJOpen, is because it demonstrates best, on an operational level, how to orchestrate effectively collective human intelligence, inclusiveness, participation, engagement and empowerment through platform technology.

The GJOpen is basically an open online platform that harnesses the wisdom of the crowd to forecast world events. This community of amateur forecasters regularly outcompetes the US Intelligence Services (16 agencies, $50 billion annual budget) in competitions and forecasting events. It does so by leveraging the same design principles and building blocks of modern internet platform-businesses such as UBER, Airbnb or Alibaba. The core building blocks of The GJOpen are:

An open community/network of producers (amateur forecasters) and consumers (news agencies, government bodies, insurance companies, etc.) of information and forecasts. A set of tools and regulations that allow the community to effectively interact, create, share and exchange value (forecasts). Data to share and help match community members and interpret the quality of the value creations.

Anyone can join the platform, pick a forecast challenge and provide their best ‘bet’ on future events. The tools and features of the platform help you control your input, guide specific interactions and connect you with other community members for cross-pollination and inspiration. This community of amateur forecasters votes on and creates their own challenges and, quite often, special interest groups propose additional challenges to a large ambitious online community.

The US Intelligence Service essentially does the same thing — forecasting future events — with a key difference; value in form of insights gets created inside the constraints of their own walls, following a linear and cumbersome slow process. Network effects happen, but they are weak and short so important insights, reflections, and conclusions stay within secure meeting rooms, protected by a political elite and a group of well-paid civil servants.

So what makes internet platform-businesses so successful, compared to traditional business models and organizations, such as the US Intelligence Service?