Alex Moazed and Nicholas L. Johnson, Modern Monopolies: What it Takes to Dominate the 21st Century Economy

Abstract

Modern Monopolies is an interesting narrative about a new business model platform. The book is written with the aim to spread the knowledge about this new model among the entrepreneurs and prepare them to capitalise the enormous opportunities this business model generates. The write-up in the book revolves around platforms as the prime business model in the era of digitalisation. It discusses what platforms are, how they work and why they are important. It also suggests the ideas to make platform business model a successful business venture. The book elaborates the success and failure of platform business model with the help of examples of such businesses active across the world since their inception. The book is jointly written by Alex Moazed and Nicholas L. Johnson. Though it is the first book of both the authors, it is a good treat for the readers. Alex Moazed is the Founder and CEO of Applico. He has the experience of working directly with management and board members of Fortune 500 companies to help them build or buy their own platform businesses. Nicholas L. Johnson is the Head of Platform at Applico, where he oversees the company's research into how platforms work. He works with clients on business model design and bringing pioneering platforms to market. The authors' vast practical exposure helped them to compile a lot of real-world examples which makes the book an interesting read. At the same time, it also makes it easy to understand how the concept of platform business model actually works. Throughout the text, it has been explained how modern monopolies are created and why platforms are reinventing the economy today. The book is broadly divided into two parts: The first half discusses what a platform business model is and the second half expounds how the platform business model work. In Part I, a platform business model has been defined as the one which creates value by facilitating an exchange between two or more persons or group of persons. So, rather than producing things, they simply connect people. Exemplary performances of platform business models described in the book are Google, Snapchat, Tinder, Amazon, Uber among others. This new business model has quietly become a game changer and provides enormous opportunities of growth to its founders. The authors have discussed some frameworks in detail which they use to assist their clients. The book also discusses how platform business is quickly overtaking linear business models. Initially, the authors described the difference between the two models of business with the help of opinions of various experts and examples to support those opinions. Somehow, they settle on the idea that concepts like value chain, economies of scale and linear business models are old now and provide gradual returns/benefits in the business. On the contrary, the effect of platforms is massive and immediate. By quoting the idea of Peter Thiel (PayPal founder and former CEO), it is stated that capitalism and competition are opposite. Today companies which drive the economies ...