Machine, Platform, Crowd: Harnessing Our Digital Future

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The authors of Machine, Platform, Crowd, Eric Brynjolfsson (left) and Andrew McAfee.

Summary:

Andrew (“Andy”) McAfee and Erik Brynjolfsson’s Machine, Platform, Crowd: Harnessing Our Digital Future is a fascinating commentary on the direction in which the world is moving. The authors immediately dive into three brilliant encompassments of the title’s three topics. From describing a machine that can reliably defeat the world’s champions of the Chinese game “Go”, to delving into the world of companies defying the need for physical assets, to documenting the interaction of the general public in large corporations, the authors waste no time. McAfee and Brynjolfsson use the opening chapters of their book to explain how modern society has grown and adapted to accept the interweaving of technology into everyday lives. They explain the different “machine ages” wherein the first occurred in the late 19th or early 20th century, and the second began around the 1990s. The second machine age can be split into two parts, with the first being recognized as when machines began to productively take over routine work—the mid-1990s. The latter phase of the second machine age is happening now; technology is straying from routine, programmed tasks and learning how to solve problems on their own. The rest of the novel delves mainly into phase two of the second machine age, breaking down the core aspects of progress and analyzing how to maintain and enhance the success the modern world has enjoyed over the past few decades.

The authors begin their analysis of this inevitable progression of the technological age and the ever-tightening union of digitization and human innovation by discussing the merging of the “mind and machine.” As the book is divided into three parts, the first analyzes this interweaving, from the beginning of the second machine age through the most recent periods of advancement, to what may happen in the coming years. Machine learning has lately been shown to allow robots and programs to start solving problems on their own. Instead of merely following a set algorithm, technology has begun to adapt to gathered data—it can respond to situations more creatively than ever before, coming up with some solutions that a human may take much longer to realize. Machines are approaching a similar ability to people in decision making—the earliest example being creditworthiness—and Andy and Erik predict that machines are on their way to making more complex, involved (and possibly more accurate than human) decisions.

 

The discussion transfers to a secondary analysis of the notion of products and platforms. The past few years have seen an incredible transformation wherein some companies have realized the possibility of creating something out of no physical thing. For example, this second portion of the books considers companies like Uber and Airbnb. Neither company owns either physical vehicles or actual real estate, respectively. However, both have seen immense success in their fields because of the utilization of platforms. The authors identify platforms as a digital culmination of a near-zero marginal cost of access, reproduction, and distribution. These platforms also take advantage of the idea that digital goods have free, perfect, and instant economics. In other words, it costs next to nothing to reproduce a digital good, the reproduction of a digital good is essentially perfect, and transfer of these goods is possible at any time, between countless locations, and happens in an instant. McAfee and Brynjolfsson also consider concepts like combinatorial innovation, Moore’s law, and network effects, just to name a few. They explain the impressive growth of apps thanks to platform economics (explained through concepts like complements and substitutes), and analyze the various efforts of smartphone companies to succeed in the previously untapped market.

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In addition to the plethora of in-depth information provided, the novel also describes the incumbent “core” versus the ever-advancing impact of the “crowd.” The authors explain the core to be the previous, long-standing, centralized controllers of information and influence. The crowd is–ideally–everyone. A tangible example of this concept is seen in crowd-funding: people ask the community for donations towards a certain cause. The crowd serves to provide financial, intellectual, social, etc. resources to those searching for outside assistance, oftentimes in hopes of receiving something in return. McAfee and Brynjolfsson demonstrate these concepts in the development of Wikipedia, the largest and most popular general reference work on the web, Linux, the biggest and most professional operating system in the world, and through Bitcoin, among other things. The idea is that none of these incredibly transformative developments would’ve seen nearly as much success in such a minute measure of time (or would’ve come into existence at all) if not for the billions of minds in the world contributing to a greater purpose. The key to bringing this crowd together entails several principles such as openness to ideas, non-credentialism, and clear outcomes–just to name a few. The authors emphasize the importance of different perspectives and the willingness to consider new, even outrageous, thoughts in order to see the greatest possible progress.

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Machine, Platform, Crowd includes an immense variety of examples, anecdotes, and concepts. Throughout, it also provides thoughtful questions to help the reader consider how to apply said concepts in their own companies. McAfee and Brynjolfsson navigate the overwhelming amount of information relevant to these theories, analyzing much more information than can be tackled in a short book review. However, they naturally weave everything together under the consideration that technology has made spectacular breakthroughs in the past decades and refuses to slow down. This novel develops all of these ideas while simultaneously focusing on how those in the business world can maneuver the coming, inevitable disruptions.

In-Depth Topic

The habits of successful platforms described by McAfee and Brynjolfsson are particularly interesting and very likely relevant to many companies we’ll be visiting in NYC. I’ve always wondered what characteristics that platforms like Alibaba and Airbnb share that enable them to continue to dominate their spaces. They’re usually early to the space (a fact that did not surprise me), but don’t always have to be first. Android is a great example of being able to be one of the firsts on the scene, even though they emerged a considerable amount of time after their competitors. Further, the utilization of the economics of complements actually did interest me. After taking quite a few economics courses, it was interesting to see complementary goods being applied to real-life technological companies as opposed to considering the economic impact of the price of peanut butter rising. A third characteristic shared by many is the concept of multiple contributors and how the rise of contributions could be applied to economic topics. Lastly, they described the importance of developing a specialized balance between being open to contributions and curating the content to improve the user experience. I’m excited to meet with the companies in NYC and not only see how they’ve utilized these concepts but also find out the different strategies they’ve found helpful to become successful in their space.

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Personal Recommendation

Personally, I thought this book was incredibly informative and interesting. It was well written, with occasional light-hearted witty comments that kept it fun to read. The book begins by giving the reader a solid foundation on which to lay the rest of their concepts. In describing the pathway technology has taken to get to where it is today, the reader has a good baseline of the true development of machines, platforms, and the crowd. McAfee and Brynjolfsson, instead of just focusing on one well-known company, person, or idea, chose to expose their audience to many, opening their eyes to different approaches and stimulating their minds to think in a different way. It’s a very applicable book to endless conversations and I would highly recommend it.

3 thoughts on “Machine, Platform, Crowd: Harnessing Our Digital Future

  1. Nice post. As we discussed, it will be improved once you add some multimedia (no hurry). I think this book is a really nice overview of exactly what we’re covering in this class. I’ve almost made it required reading, but decided to go with articles/ TED talks instead.

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  2. Great summary. I can tell this book is extremely informative. It’s very inspiring to know that researchers try to make AIs think out of their algorithms. This makes me think about the TV show I watched during the summer – West World. The show talks about what will happen when robots have their own awareness.

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  3. Great in-depth analysis! The ideas put forth by McAfee and Brynjolfsson will undoubtedly enhance our study of the startups we will visit and will be great resources to keep in mind in NYC! I haven’t read this book yet and hadn’t thought of the economic impact of technological complements — but it was fascinating reading your thoughts!

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