Information Systems Test 2
Platform businesses don't own the '______ ___ __________' instead, they own the '______ __ ___________'
'means of production', 'means of connection'
If a '_______' model can be derived (maybe, maybe not), it can be put into use (deployed) to generate a ________ of the output variable (Y), given new sets of input data (X)
'quality', prediction
Hybrid impact
(switching between positive & negative): • Massive multiplayer online games » positive network effects when congestion is low (no lag) » negative if a tipping point is reached and more users lead to a slower system response (Gallaugher calls: congestion effect)
T/F network effects always have a positive impact
False: sometimes more users is worse - value depletion. - eBay (more sellers may lead to smaller margins)
The most common algorithm is called the _________.
apriori algorithm
Collaborative Filtering is also a technique to identify __________
associations
Lift
controls for the support (frequency) of the consequent. Lift of an association rule is the ratio of observed support compared to that expected if X & Y were independent.
In a Tippy market, the firm that reaches a ...
critical mass of users (or complementors) first (a tipping point) will likely win the entire market - "winner takes all" - especially when the growth in network effects is exponential.
The internet is a ______
network of networks, connecting many private, business, academic, and government computers worldwide
fabricated content
new content that is 100% false, designed to deceive and do harm
In unsupervised learning input data (x) is available but
no corresponding output data (Y) -- so, no known outcomes. So, developing a mapping function is not feasible
Misinformation:
False information that is held or spread, regardless of intent
Disinformation:
False information that is spread with the intent to mislead.
T/F: Association Rules Mining determines causation
False: it only traces evidence of association
T/F: every company posseses data about social graphs
True
Network effects are sometimes called: "_________"; or "____________"
"network externality", "demand-side economies of scale"
Collective Intelligence:
- Intellectual potential of a large group of individuals to make better, more informed decisions and choices than individual experts
User-curated shopping (The Fancy, Lyst)
- Users create and share lists of products and services for others to shop from
What is the chicken-and-egg problem?
-Cold-start problem. • A new platform doesn't initially create enough value to attract new users. It's not economical for consumers to join the platform when there are no producers and vice versa
-__________ might show that users had 2,000 sessions in the past 30 days. -_________ could show how many sessions occurred on iPhones in GA. -_________could reveal that that sessions on iPhones were 20% less likely to buy
-Data -Analytics -Insights
In a MSP the focus of strategy shifts from:
-From controlling resources to orchestrating resources -From optimizing internal processes to facilitating external interactions -From increasing customer value to maximize ecosystem value
Is hype news misinformation?
-Hype news is information that is taken out of context, exaggerated, and overgeneralized to attract public attention. -Hype news can be more insidious because it is based on a grain of truth, and its deletion raises the specter of censorship. To that extent, hype news is a pernicious form of information distortion that cannot be easily eliminated - Distinct from "fake news," which is "fabricated information that mimics news media content in form but not in organizational process or intent"
Quickbooks started moving towards a platform by:
-P2P (peer to peer) platform for interactions - account holders can invoice each other within Quickbooks for rendered services -Platform for third party developers to build complementary and compatible solutions to be offered to QuickBooks customers (potentially to extend functionality and to ensure proper integration) - API, SDK, Sandbox, App store
Negative (Balancing) Feedback Loop is a...
-Self-diminishing (weakening ---) trend -Negative feedback keeps a positive effect/externality from growing indefinitely, pulling a system back towards an equilibrium (ex body temp) (i.e., reducing fluctuations in the output). • Important in nature! • Negative does not necessarily mean 'bad'
lift roughly = 1
-indicates almost no association - the events seem independent.
Lowering costs - Economies of scale def
-product becomes cheaper to produce as business increase size and output, increasing scale leads to lower cost per unit of output( cost per unit decreases as fixed costs are spread out over more units)
Increasing value - network effects def
-product becomes more valuable as more users use it (ie as more users demand to use it (bc "demand side")) -Network effects help build a moat - leading to high/repeat rates of engagement, higher margins
2 main types of network effects:
-same side -cross-side
2 sided markets can exhibit both same-side & cross-side networks, Xbox example of same-side and cross-side
-same-side: if there are more Xbox owners, each player can play against more owners and each owner benefits more from their console -cross-side: if there are more console game developers, then owners derive more value from their devices by having a larger selection of games
Positive Feedback Loop is a ...
-self-reinforcing (strengthening) trend -a company gains customers which in turn, attracts more customers -Or A company loses customers, which in turn, leads to other customers leaving -"positive" does not necessarily mean "good"
Insights are:
-value obtained through analytics. Output -novel and actionable
What is a social graph?
A Social Graph is "a mapping of everyone and how they are related." • From an individual perspective: A map of all relevant links or connections for one member of a social network. • May also include things, organizations, products, etc. • Conceptually, it can be thought of as a network of things and connections between them
classification supervision learning problem:
A classification problem is when the output variable (Y) is a category, such as "red" or "blue" or "disease" and "no disease"
clustering unsupervised learning problem:
A clustering problem is where you want to discover the inherent groupings in the data, such as attempting to group customers on attribute sets, such as purchasing behavior & level of loyalty
Regression supervision learning problem:
A regression problem is when the output variable (Y) is a value, such as "dollars" or "weight"
Crowdsourcing
A sourcing model in which individuals or organizations obtain goods and services, including ideas and finances, from a large, relatively open and often rapidly-evolving group of internet users; it divides work between participants to achieve a cumulative result, younger term with more emphasis on technology as an enabler
association unsupervised learning problem:
An association rule learning problem is where you want to discover rules that describe large portions of your data, such as people that buy X also tend to buy Y.
How can a social graph be commercialized?
By using the connection information in the Social Graph to make advertising more effective (precise targeting
_____________ (partners, developers) support the growth of the business ecosystem, and increase users' switching costs to another ecosystem
Complementors
The three main components of the 'Digital Economy' concept are?
E-business infrastructure, E-business, E-commerce
Can we "engineer" network effects through product design?
Deffinitely, Location tracking (via GPS or via cell towers) capabilities in smartphones - enable location-based services (Uber, etc.), Collaboration tools in MS Word - in addition to being able to share .doc and .docx files with other users - now we have a more efficient way of co-editing documents (more value from collaboration)
Move early in the market to...
Establish networks before competitors can
Confidence
Given X has been seen, what is the probability of also seeing Y (Assume 1000 transactions See A 100 times. Of those 100 times you see A, you also see B 75 times The confidence that A implies B is 75%)
Support
How often do all the items featured in a rule co-occur within the dataset. i.e., the percentage frequency of occurrence. (Assume 1000 transactions See A 100 times Support is 10%)
Social Network analysis helps:
Identify and understand groups that have formed • Around actions such as discussing topics • Around personal characteristics such as location or interests Understand who the important people are in these groups • People that hold groups together • People that connect different groups • People "having a favored position" • People with "more opportunities" and "fewer constraints?"
Data Mining Objective:
Identify hard-to-spot meaningful (interesting) patterns in large datasets
Peer-to-peer sales platforms (eBay, Etsy, Amazon)
In these websites, users can directly communicate and sell products to other users
Discovered rules are expressed in this form:
LHS -> RHS (X -> Y)
Section 230
No provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider
What is social computing?
Social computing combines social behavior and digital technologies (information systems) to create value
Insights into social networks (identification of social structures) can be used for:
Targeted marketing & advertising • Fraud detection • Social-based recommendation systems • Security & intelligence
churn rate
The rate at which customers leave a product or service.
Social Influence:
User-generated content can impact consumer behavior (lead to social influence) and change opinion
Group buying (Groupon, LivingSocial)
Users can buy products or services at a lower price when enough users agree to make this purchase
Peer recommendations & reviews (Amazon, Yelp, Bazaarvoice)
Users can see recommendations and reviews from other users
Sharing Economy
Using and sharing products/services between two or more individuals. • No material compensation; and usually no transfer of ownership (unless in form of giving).
Collaborative Economy (Collaborative Consumption)
Using and sharing products/services between: - a platform provider - peer service provider, & - a customer (user) - i.e., triadic exchange.
Socially Intelligent Computing
Ways in which systems of human intelligence across the globe and social networks can work together
What do we NOT do once a model has been proposed: -Set aside some of the records with known outcomes to test the proposed model -Use these testing records in creating the proposed model -Use the test dataset to when testing the developed model
We do not use the testing records in creating the proposed model ((or you will be just validating signal that has already been factored into the model)
Web 1.0 vs Web 2.0
Web 1.0 before 2005 was menu based and top-down with a one way communication model, Web 2.0 was interactive and more personalized with the rise of facebook, twitter, youtube etc...
Tipping:
When an industry starts with multiple MSPs but ends with a single dominant platform (i.e., concentrated market)
MSPs provide...
an open participative infrastructure for interactions
Multi-sided platform (MSP):
an organization that creates value primarily by enabling direct interactions between two (or more) distinct types of affiliated customers. -The MSP hosts the market -2 sided market
What is a Network?
a group or system of interconnected people or things
Pipeline businesses produce value through...
a linear set of well-defined activities.
A software platform model consists of two major elements:
a platform and complementary apps
Data network effects occur when...
a product, generally powered by machine learning, becomes smarter as it gets more data from users - which then attracts more users.
In a pipeline business model, inputs at one end of the chain (say, materials from suppliers) undergo...
a series of steps that transform them into an output that's worth more: the finished product
QuickBooks is an ___________ _________ _________ developed and marketed by Intuit, originally it was a pipe
accounting software package
The success of a platform increasingly depends on ______ _____________ who develop ___________ complementary goods to stimulate user demand for the platform. These complementors become MSP value-creation partners (extend the MSP's value proposition)
active complementors, innovative
Social networking refers to...
activities performed using social media tools (e.g., Twitter) to interact with other users or to find people with similar interests to oneself
In data mining, the _______ "learns" from the _________ __________ by iteratively making 'practice' predictions using the predictors and adjusting for the degree of error in its practice prediction (based on comparing the 'practice' prediction to the known outcome Y).
algorithm, training dataset
Digital Economy refers to?
an economy that is based on digital technologies, although we increasingly perceive this as conducting business through markets based on the internet & the World Wide Web
A same-side network effect is when ...
an increase in usage and/or users leads to a direct increase in the product or service's value for other users within a group, leading to the network itself growing (ex: facebook, zelle, dropbox, skype)
Ensure ________ _________ when new generations of the product/service are rolled out (Capitalize on the network effects created by older generations)
backward compatibility
A cross-side network effect is when...
both buyer and seller increase the value of a service for each other, like in a marketplace, leading to the network itself growing. (i.e., the value of the service to a user on one side of the market depends on the uptake on the other side of the market) (ex: ebay, app store, google play, apple pay)
Association rules need _____________
categorical data
What contain codes or text values to denote distinct classes?
categorical variables ( ie gender would have male or female)
In an MSP the network of producers and consumers is the...
chief asset
A platform is a...
collection of essential components that brings together a variety of complementary components or goods and allows them to function together
A business ecosystem is a...
community of organizations and individuals, stronger together than individually, that co-work and co-evolve toward fulfilling a shared purpose through both collaboration and competition interactions
Encourage the development of _________ _________ (use is directly related to the use of another base or associated product such that a surge in demand for one product results in an increase in demand for the other)
complementary goods
A data network effect is a...
network effect that results from data
Primary production factors of a Digital Economy?
data & digital technology
Market basket analysis:
determining what products tend to go together in shopping carts at a retailer
Platform businesses enable _________ between two or more customer or participant groups (they do not buy-then-sell, but directly connect buyers and sellers)
direct interactions
If entering a market, embrace the ______ _______ in that class to leverage existing network effects ( ie. Samsung embracing Android mobile OS for smartphones)
dominant technology
The ______ nature of networks (over time) may impact the strength, impact, timing & nature of network effects.
dynamic
Complementors are...
e independent third parties that 'complement (add) value' extending the platform's core functionality by offering complementary goods and services (innovations) which enhance the attractiveness of the focal product or service, such as add-ons, extensions, or modules
Establish ____________ - move towards __________
ecosystems, platforms
Platform businesses usually solve a ______ ___________ problem (e.g., Uber's surge pricing mechanism)
hard coordination
What is E-business infrastructure?
hardware, software, telecom, networks, human capital, etc
What is E-business?
how business is conducted, any process that an organization conducts over computer-mediated networks
congestion effect
if a tipping point is reached and more users lead to a slower system response ie: for uber a greater number of riders means a higher price point or a higher wait time per ride. The same is true for drivers - more Uber drivers mean more competition for other drivers
Social commerce:
inclusive term for the use of social computing in business
if a product or service has a network effect, its value and utility ___________ as its user base grows (which reflects the increased opportunity for participants to inter-network)
increase
lift <1
indicates negative association - actions in opposite directions - co-occurrence is less likely than chance - customers who buy one item (or a given itemset) are less likely (than average) to purchase the other
lift > 1
indicates positive association - co-occurrence is more likely than chance.
An MSP creates value as an _________ by __________ & ___________ affiliated groups of users
intermediary, connecting, coordinating
Networks are especially important in the ________
internet age, bc has increased possible connections making them easier
Social commerce is a subset of electronic commerce that...
involves social media and online media that supports social interaction, and user contributions to assist online buying and selling of products/services
What is the MSP's value proposition?
it mediates (coordinates, governs, & enables) the interactions between the transacting parties, acting as a hub.
Markets are _____ likely to be tippy if customer demands are ________ because that creates opportunities to profit by focusing on competing within market ______
less, heterogenous, niches
there is a _____ flow of value (through creation & distribution of value), much like water flowing through a pipe
linear
When there is enough heterogeneity in demand, identify ______ _______that are different enough and big enough to sustain the firm
lucrative niches
Focuses on the ____________ ___ ____________ _______, which can be "exponential" - not controlling or owning traditional physical assets (the means of production)
maximization of ecosystem value
Misleading content:
misleading use of information to frame an issue or individual
Using an 'acceptable' model is called
model deployment
The goal in unsupervised learning is to:
model the underlying structure or distribution reflected in the data, to gain possible insights
Pipeline business are:
old school - dominant throughout history, e.g., all traditional manufacturing businesses, media companies, and even education systems. • own their inventory, which is reported on their balance sheets.
When a market for a homogeneous product is subject to strong ______feedback effects, it might be a ______ market
positive, tippy
A feedback loop is a ....
process that "loops" the outputs of a system back in as inputs.
A software (digital) platform is a...
product or service that allows for the development and integration of software products and other complementary goods
Expand by Redefining the Market:
redesign/reinvent the product to appeal to customers who never considered the product before (Nintendo designed Wii console to appeal to families)
Social Network Analysis (Social Analytics) is a...
set of business analytics techniques (algorithms) that can be applied to datasets of recorded social interactions to identify patterns of social relationships (i.e., emergent social structures) reflected in communication networks
A social network is a ______ ________ composed of individuals, groups, or organizations ________ __ _____________, such as shared values, visions, ideas, interests, financial exchange, friendship, kinship, conflict, or trade
social structure, linked by relationships
Creator Economy (influencer economy) is a...
software-facilitated economy that allows creators and influencers to earn revenue from their creations. • Software platforms: YouTube, TikTok, Instagram etc...
What does Metcalfe's law state?
that the value of a telecommunications network is proportional to the square of the number of connected users of the system (n^2) - i.e., exponential growth
Social media refers to...
the tools, services, and environments that facilitate (enable) interactions among people leading to the creation, sharing, and/or exchange of information, content, and ideas in virtual (online) communities and networks
A Social Graph will not only include who is connected, but also:
the type of connections between people, such as work, friendship, interests, and location
In suprivised data mining, the data used in developing the model is called the
training dataset.
What is E-commerce?
transfer of goods, for example when a book is sold online
What is an envelopment attack?
when a large MSP (Platform B) enters an adjacent (target) market (perhaps dominated by smaller MSPs - e.g., Platform A) in which the larger MSP's user base are either existing or potential consumers. The attacking MSP will leverage the network effects associated with its existing user base and existing capabilities to compete against incumbents within the target market
false context
when genuine content is shared with false contextual information
manipulated content
when genuine information or imagery is manipulated to deceive
Imposter content
when genuine sources are impersonated
false connection
when headlines, visuals or captions don't support the content
What is a network effect?
when new, additional users signing up for a product or service increases its value and utility for current & future users
Business Intelligence (BI)
• Advanced reporting & dashboards • Not statistical in nature (does not include statistical modeling) • Tools such as Tableau, Power BI (MS's product)
Business Analytics is a broad term covering:
• Business Intelligence (BI) • Statistical Analysis - hypothesis testing • Data Mining
Association rules:
• Determine which behaviors/outcomes go (tend to occur) together • The world is full of associations - some pattern of regularity - co-occurrence of events
MSP Characteristics
• Large number of participants - an ecosystem (network) of partners • Complementary markets (products and services) • Enabled by the Internet • May have its own product but understands participants also care about interactions with each other. • First-mover advantage, and high barriers to entry (if it achieves scale) • Network effects (same-side & cross-side)
Subsidize early adoption examples:
• Sony PS3 was sold at a loss in the beginning • Freemium business model: Offer simple and basic services for free for the user to try and more advanced or additional features at a premium. A common practice with many software companies including game companies.
Ideally, we want to identify association rules that have:
• high support • high confidence • have lift
Pipeline businesses aim to compete by:
• producing products at scale • owning and controlling large assets (factories, distribution networks) • being efficient
