Chenyi Shi

But at the same time, the third-party transactions are a nature of network economies.

Now, some question we may have to analyze there is, is this platform really stable?

Which means, is there a really high cost of being attached to this platform?

Can you multi-home, et cetera?

We have to go into that.

Right, so maybe they're just the one.

So that's why you would observe economic structure of both scale economies and network economies.

Now there's a deeper question there, which I don't even have an answer to.

Is one of them the cause and the other the effect?

Or are both of them causes for power?

I'll give you an example of intertwined real life, which is we all know Amazon in retail has gigantic scale advantage in the infrastructure, right?

Just all the warehouse and distribution centers they've built.

But at the same time, you observe what you will call flywheels on the retail, right?

The more buyers, more sellers, and the loop goes on.

And this is what I call the mixing of reality between cause and effect.

Because without a really strong distribution infrastructure, which gives them the cost advantage and faster delivery and prime and all of those benefits, there really isn't anything that makes their marketplace sticky among either side.

So the so-called network effect you observe is actually an effect of the power in scale of the infrastructure underneath.

But you would just observe economic structure of both because platform just kind of mix them all together.

Yeah, it doesn't help when the theory is never done.

You know, like it's funny, I think David, you mentioned last time we talked about platforms, it doesn't feel completed.