Pipeline businesses are typically better than platform businesses at incorporating user feedback and taking advantage of network effects.

Question

Quizplus · Accepted Answer

Platform businesses help facilitate exchanges between producers and consumers, and this position allows them to gather data from both sides of the interaction. In contrast, pipelines tend to be inefficient in managing the flow of information from producer to consumer. Feedback loops from consumers back to the producers allow platforms to fine-tune their offerings and to benefit from big data analytics. These feedback loops also facilitate network effects, in which improved products or services based on user feedback lead to more customers, allowing the firm to continue improving its offerings.

Pipeline Businesses Are Typically Better Than Platform Businesses at Incorporating