Platform capitalism: The intermediation and capitalization of digital economic circulation

Langley, Paul; Leyshon, Andrew Article Platform capitalism: The intermediation and capitalization of digital economic circulation Finance and Society Provided in Cooperation with: Finance and Society Network (FSN) Suggested Citation: Langley, Paul; Leyshon, Andrew (2017) : Platform capitalism: The intermediation and capitalization of digital economic circulation, Finance and Society, ISSN 2059-5999, University of Edinburgh, Edinburgh, Vol. 3, Iss. 1, pp. 11-31, https://doi.org/10.2218/finsoc.v3i1.1936 This Version is available at: https://hdl.handle.net/10419/309337 Standard-Nutzungsbedingungen: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen. 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If the documents have been made available under an Open Content Licence (especially Creative Commons Licences), you may exercise further usage rights as specified in the indicated licence. https://creativecommons.org/licenses/by-nc-nd/4.0/ Platform capitalism: The intermediation and capitalisation of digital economic circulation Corresponding author: Paul Langley, Department of Geography, Durham University, Lower Mountjoy, South Road, Durham DH1 3LE, UK. Email: [email protected] Paul Langley Durham University, UK Andrew Leyshon University of Nottingham, UK Abstract A new form of digital economic circulation has emerged, wherein ideas, knowledge, labour and use rights for otherwise idle assets move between geographically distributed but connected and interactive online communities. Such circulation is apparent across a number of digital economic ecologies, including social media, online marketplaces, crowdsourcing, crowdfunding and other manifestations of the so-called ‘sharing economy’. Prevailing accounts deploy concepts such as ‘co-production’, ‘prosumption’ and ‘peer-to-peer’ to explain digital economic circulation as networked exchange relations characterised by their disintermediated, collaborative and democratising qualities. Building from the neologism of platform capitalism, we place ‘the platform' — understood as a distinct mode of socio-technical intermediary and business arrangement that is incorporated into wider processes of capitalisation — at the centre of the critical analysis of digital economic circulation. To create multi-sided markets and coordinate network effects, platforms enrol users through a participatory economic culture and mobilise code and data analytics to compose immanent infrastructures. Platform intermediation is also nested in the ex-post construction of a replicable business model. Prioritising rapid up-scaling and extracting revenues from circulations and associated data trails, the model performs the structure of venture capital investment which capitalises on the potential of platforms to realise monopoly rents. Keywords Digital economy, platform business model, intermediation, capitalisation, venture capital Finance and Society 2017, 3(1): 11-31 © The Author(s) 10.2218/finsoc.v3i1.1936 Article 12 Finance and Society 3(1) Introduction: White Label At a small-scale academic-practitioner conference held in London in the middle of 2015 devoted to the United Kingdom’s rapidly growing crowdfunding economy, a debate took hold about the recent proliferation of crowdfunding platforms. Discussion amongst conference participants stressed that this economy had initially been dependent upon the emergence of pioneering platforms that were created by the ingenuity of their founders in bringing together financial and technological expertise. Zopa, for instance, opened for business in 2005 and quickly emerged as a global leader in peer-to-peer (P2P) unsecured lending to household borrowers. The first-ever equity crowdfunding platform, Crowd Cube, was launched in the UK in 2011, the same year as Abundance Generation, the first platform to arrange the issue of fixedinterest bonds. The crux of the conference debate came to centre on how to interpret the large number of crowdfunding platforms presently operating in the UK. Growth has been rapid and continues apace: by 2016, over 40 platforms were members of the UK Crowdfunding Association,1while a further eight were members of the Peer-to-Peer Finance Association.2 The prevailing view expressed at the conference was that, although there would likely be bankruptcies which could cause a ‘correction’ to the pace of growth, an increasing number of platforms with relatively distinct market niches was an indicator of the continuing expansion of the crowdfunding economy and of the UK’s position as a world leader in this sector. Albeit from a low base, crowdfunding in the UK expanded much faster than the rest of the financial sector in recent years. By 2015, the volume of funds raised through crowdfunding reached £3.2 billion, compared to £666 million in 2013 and £1.74 billion in 2014, an increase of over 300% in two years. It has been estimated that crowdfunding accounted for over 3% of gross lending to UK small- and medium-sized enterprises (SMEs) in 2015, and was responsible for the equivalent of 14% of new bank loans to small businesses (Zhang et al., 2016). One practitioner in the conference audience intervened in the debate, drawing attention to White Label Crowdfunding, a company that offers an ‘off-the-shelf’ platform building tool for would-be crowdfunding enterprises. White Label promote themselves as providers of “marketleading technology and support”, enabling firms to “enter the alternative finance market quickly”.3As the examples on White Label’s website attest, the design, build and maintenance of a crowdfunding platform is an expert service that the company has provided to a number of new market entrants. Most are start-up firms, but Invest and Borrow, for example, is a crowdfunding spin-off by the pay-day-lender, Wonga. By drawing attention to White Label, the conference delegate wanted to illustrate that a crowdfunding platform could be assembled with relative ease and at much reduced cost than was once the case. Indeed, the platforms assembled by White Label and other similar platform builders (e.g. Sharetribe, Near Me) are an amalgam of widely available generic plug-and-play extensions for core platform competencies, such as electronic payments and content management, as well as bespoke code (Choudary, 2015). The proliferation of crowdfunding platforms in the UK is, therefore, not merely an indicator of the on-going expansion of the crowdfunding economy. Rather, it is also constituent of the maturity and ubiquity of multi-sided platforms as enterprises and sociotechnical systems in an emergent digital economy which includes, but stretches well beyond, crowdfunding. This fieldwork vignette takes us to the problematic that we address here. Whether emphasising pioneering crowdfunding platforms or drawing attention to the consolidation of the platform business model, the conference debate foregrounded multi-sided platforms in the emergence and expansion of the new digital economy. Yet, this platform-focused interpretation jars disconcertingly with received understandings of the novel form of digital economic 13 Langley and Leyshon circulation of which crowdfunding is but part. Emerging over the last decade and now apparent across a number of digital economic ecologies – including social media, online marketplaces, crowdfunding, crowdsourcing, and the sharing economy more broadly – such circulations carry ideas, knowledge, labour and use rights for otherwise idle assets between geographically distributed but connected and interactive online communities. Prevailing explanations cast digital economic circulations as horizontal, networked exchange relations between users which are new and different because of their disintermediated, collaborative, and even democratising qualities. Deploying concepts such as ‘co-production’ (e.g. Prahalad and Ramaswamy, 2004; Thomke, 2003), ‘prosumption’ (e.g. Ritzer and Jurgensen, 2010), ‘productive publics’ (Arvidsson and Peitersen, 2013), and ‘peer-to-peer’ (Oram, 2001), established accounts are problematic, in short, because they render platforms largely invisible in the understandings that they offer of the digital economy. In this article, by contrast, we want to develop an analysis provoked by ‘platform capitalism’, a neologism that can be traced to a critique of the sharing economy offered by the German blogger, Sascha Lobo (2014). Under the rubric of platform capitalism, we aim to place ‘the platform’ at the centre of critical understandings of digital economic circulation. For us, platform capitalism is a useful signifier for naming an analytical focus on ‘the platform’ which, following José van Dijck (2013), can be thought of as a discrete and dynamic arrangement defined by a particular combination of socio-technical and capitalist business practices. Over time, we would hope that the neologism of platform capitalism will provoke further research dedicated to detailing how this particular coming together of socio-technical and business practices manifests itself in concrete terms for specific enterprises. Here, however, we take the first steps toward centring critical understandings of digital economic circulation on the platform by opening up key conceptual and analytical concerns. By building on but departing from van Dijck’s (2013) prescient work on social media platforms, we argue that the generative force of the platform in digital economic circulation turns, in different ways, on practices of intermediation and processes of capitalisation. Although the platforms operating in each domain of digital circulation are somewhat different – we will offer a typology below – they nonetheless share a distinctive logic and set of socio-technical practices of intermediation. Integral to framing ‘marketisation’ and, in particular, to structuring ‘market encounters’ in digital space (Çalişkan and Callon, 2010: 14- 16), platform intermediation is distinctive because it attempts both to make the ‘connections’ of multi-sided markets and to coordinate the network effects of ‘connectivity’ (van Dijck, 2013). The business of intermediating digital circulation is also increasingly the enactment of a unique platform business model. Performing the structure of the venture capital investment which also backs it, the platform business model prescribes a novel enterprise form that is crucial to the valuation and ‘capitalisation’ processes which leverage debt against future revenue prospects from digital economic circulation (see Doganova and Muniesa, 2015; Leyshon and Thrift, 2007). Our intervention differs from previous critical research that, confronting the problematic understanding of digital economic circulations as networked exchange relations, also relates the new digital economy to capitalism. We do not contribute here to the debate over the capitalist/post-capitalist character of digital economic circulation that typically collapses into ‘the users-versus-owners standoff’ (van Dijck, 2013: 18; see, for example, Kostakis and Bauwens, 2014; Mason, 2015). Nor do we begin by placing the new digital economy in the context of the apparent contradictions, limits, and transformations of the capitalist mode of production, or insist that the cutting edge of value creation is based upon the ‘enclosure’ of ‘the commons’ and the exploitation of ‘immaterial’ and ‘affective labour’ (e.g. Boutang, 2012; 14 Finance and Society 3(1) Greene and Joseph, 2015; Hardt and Negri, 2009; Terranova, 2004). For us, such considerations of property relations and value are folded into an explicit concern with the practical accomplishment of ‘the platform’ as a distinct mode of socio-technical intermediary and business arrangement that is incorporated into wider processes of capitalisation. We acknowledge that, despite the rhetoric around the ‘disruption’ of intensified market competition, platforms conduct digital turf wars. We will highlight, however, that the ‘winner takes all’ objective of platforms (Kenney and Zysman, 2016) is grounded in an intermediary logic and business model that hinges on cornering market-making and the coordination of network effects in particular niche domains of digital circulation. Similarly, we recognise that value capture from connectivity by platforms relies upon harnessing the affordances and fragilities of immaterial labour (Friedman, 2014; Hill, 2015; Leyshon et al., 2016). However, we want to stress the future-facing processes of valuation and capitalisation (see Helgesson and Muniesa, 2013; Muniesa, 2012), and we will show how, for the present at least, such processes are also highly significant to sustaining the platform. Our method throughout the paper is to interrogate the burgeoning coverage of digital economy platforms in the media and popular literature, especially the ‘how to’ and ‘secrets of my success’ guides offered by pioneers who provide personal accounts of their own platform start-ups (e.g. Chase, 2015; Stephany, 2015). We also engage with the dedicated body of expert academic-practitioner business knowledge that coalesces around the ex-post rationalisation of the new digital economy as a ‘platform economy’ (e.g. Choudary, 2015; Parker et al., 2016; Kenney and Zysman, 2016; Zysman and Kenney, 2014). The following section elaborates upon the distinctive intermediary logic of the platform, which is to make multi-sided markets and coordinate network effects, and provides a typology of the domains of circulation and corresponding platform types that can be categorised under the rubric of platform capitalism. The third section elucidates the socio-technical practices of platform intermediation which proceed by enrolling users through a participatory economic culture, and by mobilising an array of codes and data analytics to construct the infrastructures which are immanent to digital economic circulation. Section four considers how platform intermediation is now nested in a business model that targets scale economies and seeks to extract rents from circulations and associated data trails. The business model is also shown to perform the structure of venture capital investment funds that capitalise on the potential of platforms to realise monopoly rents. In conclusion, we highlight the issues of platform capitalism that require the most urgent attention: the role of platforms in the degradation of work, and the sustainability of platforms that are now highly valued and heavily capitalised as a consequence of venture capital investment. The intermediary logic of the platform For Sascha Lobo and likeminded critics, the neologism of ‘platform capitalism’ is a necessary counterweight to a narrative building around the sharing economy which depicts it as diverse and redistributive, made possible by new kinds of networked exchange. Summarising Lobo’s position, fellow blogger Sebastian Olma (2014) argues that the platform has emerged as “a generic ‘ecosystem’ able to link potential customers to anything and anyone, from private individuals to multinational corporations” (Section 3, Paragraph 1). This means that “[e]very one can become a supplier for all sorts of products and services at the click of a button”, which “is the real innovation that companies of the platform capitalism variety have introduced” (ibid.). Rene Ridgway (2015) broadens this definition when she suggests that, in 15 Langley and Leyshon donation and rewards crowdfunding, it is platform capitalism that ‘conditions’ how networks come together. Meanwhile, Kostakis and Bauwens (2014) suggest that the digital economy is characterised by a tension between two organisational modes of control over online infrastructures: first, what they call “distributed capitalism”, in which “infrastructure is primarily distributed with the promise to make everyone a small capitalist” (p. 71), and second, what they call “netarchical capitalism”, where infrastructure is “in the hands of centralized privately owned platforms” (p. 71). These various observations about platform capitalism all point towards the intermediary logic of the connective ecologies and infrastructures of the platform. The underlying intermediary logic of the platform is that it solves coordination problems in market exchange by extending the distance-shrinking networking capacities of the internet first identified during the 1990s (e.g. Evans and Wurster, 1999; Liebowitz, 2002). In particular, the advent of the internet created new opportunities to solve the problem of two-sided or multisided markets, where economic agents need to find each other to transact. Evans (2011) provides four exemplars of intermediation within two- or multi-sided markets. A traditional example is a physical place-based exchange, like a stock or commodities exchange, which hosts buyers and sellers (for a fee). Other exemplars include advertising-supported media, which provide content of various kinds to attract audiences that are delivered to advertisers (who are charged for access); and transaction systems such as credit and debit cards, that act as a form of payment between buyer and vendor (with an interchange fee charged to vendors). Evans’ fourth exemplar – software platforms – explains in part why the intermediation of multisided exchange in digital space is increasingly regarded as the preserve of the platform. Here code, in the form of an operating system, becomes the medium for connecting disparate actors (for example, through its Windows platform, Microsoft co-ordinates a three-sided market that connects computer users, applications developers and hardware manufacturers). In contrast, Microsoft’s main rival, Apple, runs a two-sided market which connects users and application developers through its iOS platform, but maintains a monopoly over the manufacture of its hardware. The smartphone industry similarly divides into two-sided (e.g. Apple iPhone) and multi-sided platforms (e.g. Google Android), while in the computer game industry two-sided console platforms (e.g. Sony Playstation, Nintendo, Microsoft, Sega) match game developers with users.4 Emerging from these software-based industries and refracted through neo-classical assumptions about market exchange, platform intermediation has rapidly expanded since the mid-2000s to encompass a wider set of multi-sided markets. Table 1 below provides a typology of the primary domains and platform types that can be categorised as comprising the new digital economic circulations of platform capitalism, and identifies examples of the main platforms that we have in our analytical sights. What our typology recognises, moreover, is that the intermediary logic shared by all platform types is distinctive in crucial respects: it goes beyond the making of multi-sided markets through software code to also include the creation and coordination of network effects. Platform intermediation thus frames the “market encounters” of marketisation processes in ways that are significantly different to the typical mediation of market exchange (Çalişkan and Callon, 2010: 14-16). What is distinctive is not so much the role of the platform as a “non-human mediator” of market encounters that mobilises the distance-shrinking network powers of the internet (Çalişkan and Callon, 2010: 15), but that platform intermediation targets the ostensible opportunities offered by network effects and the so-called ‘co-creation’ of value between users. In van Dijck’s (2013) succinct terms, platforms are not simply in the business of intermediating connections, but of actively curating connectivity. 16 Finance and Society 3(1) Table 1. Platform capitalism: Domains of circulation and platform types. Source: Authors' own. An appreciation of the distinct intermediary logic of the platform thus leads us to include social media within our typology, as one of the most prominent domains of the new form of digital economic circulation. This is because, since the mid-2000s in particular, the type of platform operating in this field has been at the forefront of the intermediation of networked connectivity, relying on the input and creativity of their interactive users – from posting updates to uploading new content – in order to generate audiences that can be sold to advertisers as consumers (van Dijck, 2013; Mangold and Faulds, 2009). Indeed, social media platforms have been particularly successful at not only attracting large audiences but, by subjecting their data to close analytical scrutiny, offering advertisers and their clients more forensic and targeted consumer marketing campaigns. It is the distinctive intermediary platform logic that also leads us to exclude from our typology those websites that attract consumers through aggregator interfaces which provide price-based comparisons (e.g. Money Supermarket), or user-generated reviews (e.g. Trip Advisor). Price-comparison and review-based websites are fee-earning digital economy intermediaries but, unlike platforms, they do not seek to facilitate and capture value from the interactions and circulations of Web 2.0. Our demarcation of domains of circulation and platform types also excludes what might be described as ‘mainstream’ e-commerce which arrived with much fanfare during the ‘new economy’ or ‘dot-com’ boom of the late 1990s 17 Langley and Leyshon (Feng et al., 2001; Thrift, 2001; Zook, 2005). There are important continuities from ecommerce into platform capitalism, including an intermediary logic, the catalytic role of venture capital in funding new start-ups, and the urgent need to quickly ‘scale-up’ operations to make a business viable (see below and, for e-commerce, Daniels, et al., 2007). But, for the most part, the web sites and mobile apps of e-commerce typically intermediate exchange in two-sided markets – either business-to-consumer (B2C) or business-to-business (B2B) – and provide an additional ‘channel’ (alongside ‘bricks and mortar’ retail outlets and telesales) through which established firms market their products and services. Digital economies are highly dynamic, however, and some e-commerce firms have extended their operations to become platforms that intermediate network effects. In order to do so, a critical decision for e-commerce firms is whether to open up their application program interface (API), which specifies how software components in its systems should interact. Firms that have open APIs enable software developers to build applications that can be added to the platform. This model of interaction was successfully developed in the open source software community of the 1990s (von Hippel, 2005; Weber, 2004), and is a way of fast-tracking innovation by drawing on a distributed community of knowledge. The incentive for developers is to write applications that are attractive to users, and that might generate extra revenue for platforms for which developers are rewarded with commissions. For example, it was the adoption of this approach that, following the dot-com boom, gradually transformed Amazon from an e-commerce retailer that mainly challenged incumbent bookshops into a platformintermediated, wide-spectrum online marketplace (Simon, 2011). By opening up its API, a host of new applications and revenue streams were attached to the platform. For example, individuals with their own web sites were encouraged to become Amazon associates, taking commission when users are directed to Amazon to make a purchase. It also developed a multisided marketplace where both individuals and retailers can offer their own products for sale, with Amazon taking a commission on all sales. Participatory culture and infrastructural intermediation The distinctive intermediary logic of the platform materialises through a particular configuration of socio-technical practices. For one of the leading gurus of the platform economy, Paul Choudary (2015: loc 868), for example, platform intermediation combines three distinct operational “layers” which will vary in “thickness” and importance according to market context and competitive strategy. These layers are: first, a network or community layer, which consists of platform participants and the relationships between them; second, an infrastructure layer, which is made up of software tools, rules and services; and third, a data layer, which allows the platform to attempt to match supply with demand. The webpages and marketing pitches of platforms are crucial to the first of these ‘layers’, and typically produce a participatory economic culture that plays to the broader and deeper cultural rhetoric about the inclusive and democratising qualities of the internet (van Dijck, 2013: 9-10). To a greater-or- lesser extent, different platform types attempt to enrol participants who are figured not as ‘consumers’ but as ‘users’ who ‘co-create value’. In Choudary’s (2015: 43) terms, “platforms must invest in behavior design”, eliciting “new behaviors that had never existed in the past” and ensuring that “users stick around of their own accord” (emphasis in original). Put differently, and in the more critical terms of Lovink and Tkacz (2015: 14), the intermediation of networked economic connectivity features the summoning-up of the popular passions and interests of what they call the “platformed masses”. 18 Finance and Society 3(1) For UK equity crowdfunding platforms, for example, what they offer is a prospect that is explicitly entrepreneurial – “a chance to be part of the next big thing”, a “revolutionary opportunity” which “enables anyone to invest in British businesses alongside professional investors and VCs” (venture capitalists).5Reward and donation modes of crowdfunding will not typically involve venture capitalists or invoke venture capitalism. Nonetheless, the funding campaigns run by various kinds of artists or innovation-based companies attempt to draw those who donate money into the entrepreneurial trajectories of their projects, both by providing regular updates on progress (often by vlogs and ‘microfilms’ in ways that mimic other social media platforms) and by offering early access to the product, service or creative output. Meanwhile, sharing economy platforms like Uber and Airbnb offer users the prospect of gaining access to services – taxis, short-term rented accommodation, and so on – that are generally cheaper and possess different qualities and features to those offered by traditional providers. Users enrolled in the sharing economy thus appear as a networked consumerentrepreneur, a kind of digital amalgam of the canny consumer of exchange markets and the entrepreneurial owner of an asset portfolio. In particular, sharing economy platforms promise a “seemingly flatter and more participatory model, whereby customers engage directly with each other” (Morozov, 2015: n.p.), an appeal to ostensible disintermediation that is also found on the webpages of platforms that specialise in the P2P lending mode of crowdfunding. Moreover, thanks to the always-on and mobile connectivity provided by smartphones, it seems that users in the sharing economy “can suddenly do things that previously required an array of institutions” (ibid.). Buyers and sellers also meet as ostensible near equivalents in such transactions; whereas in the past such exchanges were characterised by information asymmetries, platforms such as Uber and Airbnb provide information on the reputation of buyers and sellers that can inform both sides in deciding whether an exchange should take place. Tarleton Gillespie’s (2010) account of the diverse etymological origins of the term ‘platform’ provides for a particularly insightful vantage point from which to consider their positioning as enablers of the ‘co-creation of value’. They are “platforms of opportunity” which are ostensibly “flat, featureless and open to all”, and capable of “lifting us all up, evenly” (Gillespie, 2010: 347, 350, 352). Gillespie finds the origins of ‘platform’ to be simultaneously computational (as in a software code, discussed above), architectural (as in a raised surface), figurative (as a grounding for an action), and political (as in a political position or base). The conflation of these different meanings results in what Gillespie calls a “discursive positioning” of the platform which brings together: … terms and ideas that are specific enough to mean something, and vague enough to work across multiple venues for multiple audiences. To call one’s online service a platform is not a meaningless claim, nor is it a simple one. (Gillespie, 2010: 349) The use of the term platform has computational and coding roots, but the other architectural, figurative, and political understandings are bundled in and create “broad connotations” that platforms are “open, neutral, egalitarian and progressive” (p. 352). This appeal to openness and participation means “it should come as no surprise … that the term would … gain traction around user-generated content, streaming media, blogging and social computing” (p. 351). And, we would add, it is equally no surprise that the category of ‘platform’ has largely replaced ‘domain’ and become ubiquitous across digital economic spaces that are typically held to be marked by the creative and collaborative character of networked exchange. 25 Langley and Leyshon infrastructure, at the expense of others who are therefore destined to ‘fail’. Platforms seek to extract rents from their network which are, in essence, monopoly rents. Failure for start-ups in this context needs be qualified, however, as success for venture capital may not only equate with achieving an IPO. Consider, for example, how publicly-quoted platforms seek to defend their dominant market share and expand in new directions by buying up smaller rivals, and how additional rounds of investment in privately-owned platforms is often for the dedicated purpose of strengthening their market position, such that platforms targeting monopoly rents are currently a very strong presence amongst so-called ‘unicorns’ (privately-owned firms valued at over $1 billion) (Kenney and Zysman, 2016). For instance, following the 2005 purchase of YouTube noted above, publicly-quoted Google has since made in excess of fifteen acquisitions of firms that variously specialised in advertising technologies and interfaces, email security, video compression, and mobile phone platforms (see Rosoff, 2011). Thus, if platform start-ups achieve sufficient prominence and promise and are bought out by a more dominant platform seeking or defending a monopoly position, then this equates to a viable and successful strategy: it does not result in an IPO, but nonetheless performs the temporal structure of venture capital funds because it permits investors to cash out. Concluding remarks By singling-out the digital economic circulations of platform capitalism for attention, we do not wish to downplay the significance of e-commerce platforms, cloud computing, and software code more broadly in the organisation of contemporary socio-economic life (Thrift, 2005; Amoore, 2016). Such digital technologies can be said, for example, to be contributing to a transformation of both the processes and end products of manufacturing enterprises (Zysman and Kenney, 2014). Rather, by invoking the rubric of platform capitalism, our purpose in this article has been to draw critical attention to a novel form of digital economic circulation, and to a typically overlooked feature of this new ‘new economy’ that is hiding in plain sight: the platform. When placing the platform at the centre of critical understandings of digital economic circulation, moreover, we have suggested that the platform is not merely a manifestation of wider transformations in the relations and structures of contemporary capitalism. For us, analytical attention should be given to the contingent configuration and consequences of the platform as a discrete mode of socio-technical intermediary and capitalist business arrangement. This led us to stress both the distinctive marketising intermediation of digital economic circulation by platforms, and the incorporation of platform-intermediated circulation into wider processes of capitalisation. To make multi-sided markets and coordinate network effects, platforms enrol users through a participatory economic culture and mobilise code and data analytics to compose immanent infrastructures. And, nested in an emergent platform business model that also performs the structure of venture capital fund investment and valorises potential for monopoly rents, platforms prioritise up-scaling and the direct and/or indirect extraction of rent from circulations and accompanying data trails. Given that the platform is likely to become a durable feature of the global economic landscape for some time to come, we close by highlighting two features of platform capitalism that require more immediate attention. First, platforms have been subject to considerable critical comment for their perceived role in degrading conditions of work. For Friedman (2014), for example, platforms usher in a ‘gig economy’ which has been a feature of employment growth in the US economy since 2001, and is dominated by short-term or casual contacts. While this could be argued to be advantageous for those with highly valued skills and 26 Finance and Society 3(1) competencies – such as, for example, software developers who are able to write code to create applications for platforms – it remains the case that, for many, what Calloway (2016) dubs ‘apploitation’ is precarious employment at best, and is certainly not accompanied by the kinds of benefits (e.g. health insurance, pensions) which normally accompany permanent employment. Thus, crowdsourcing platforms like TaskRabbit and Handy enable people to bid for often-mundane jobs that the better remunerated do not have either the time or inclination to undertake for themselves. And, when bidding for work via platforms, individuals may find themselves in a race to the bottom and, if successful, will do so as self-employed contractors. The degradation of conditions of work that may accompany the rise of the platform is perhaps best illustrated by the rise of the sharing economy platform Uber, which describes itself as a ‘transport connection company’ that unites ‘riders’ with (self-employed) ‘drivers’. As an intermediary, Uber takes its cut from the fares earned by drivers. Uber’s appearance in the taxi markets of cities has mainly been met with hostility from incumbent, licensed taxi companies who are subject to city-based regulations designed to calibrate demand with driver numbers and to protect health and safety. Uber’s approach to these regulations is typically to ignore all but those regulations that render specific activities illegal (McNeill, 2016), thereby increasing supply, threatening the livelihoods of career taxi drivers, and provoking protests and industrial action (Topham, 2016). However, for those previously excluded from licensed taxi driving on the basis of race or class (Chassany, 2016), the disruptive capacity of Uber may create employment opportunities that might not have previously existed. Second, attention needs to be given most urgently to the ways in which, by performing the temporal and portfolio structure of venture capital funds, the platform business model has become closely implicated in the present cycle of the venture capital industry. As Feng et al. (2001: 498) argue, in “macro-economic terms”, “venture capital is not a system” composed of separate investment funds, “but a cycle”. After the best part of a decade in which aggregate venture capital disbursements in platform businesses has increased and accelerated, the platform business model is pivotal to the outcome of the current cycle of venture capital investment. In mid-April 2016, for example, a lead story in The Wall Street Journal reported that, in the first quarter of the year, the major venture capital firms such as Accel Partners and Founders Fund had attracted £13 billion worth of investments from pension funds and endowments into new funds, the largest quarterly total since the height of the dot-com boom in 2000 (Winkler, 2016). While a portion of this investment is flowing to new start-ups, the article holds that growth is symptomatic of the willingness of venture capitalists and other private investors to continue to write ‘bigger checks’ in further rounds of funding for existing companies which are encouraged ‘to spend to battle for market supremacy’. It also suggests, moreover, that the cause of the ballooning investment requirements of unicorns and other privately-owned ‘tech start-ups’ is their ‘burn rate’ – i.e., their investment costs are much greater than present revenues. For such firms, this also makes an IPO unlikely, as there is little sign that stock market investors are willing to suspend their scrutiny of revenue growth and cost-recovery, as was the case during the wave of dot-com IPOs at the turn of the millennium. Indeed, in the first quarter of 2016, there were no tech-firm IPOs in the US – the first time that this has been the case during a four-month period since the depths of the global financial crisis in 2009 (Farrell, 2016). With an increasing volume of venture capital being staked on the prospect that a limited number of platforms will eventually be ‘home runs’ – producing the monopolistic, oligopolistic, and oligopsonist market outcomes that are necessary for user and revenue growth and thus cost recovery for investors – it also becomes increasingly unlikely that the failures and 27 Langley and Leyshon bankruptcies of platforms will simply produce a ‘correction’ to present market optimism. As concerns emerge about the valuation of specific privately-owned platforms – Uber, for example, was valued at a staggering $50 billion for a round of capitalisation in July 2015, despite recorded annual revenues in 2014 of just $400 million (MacMillan and Demos, 2015) – they encourage doubts and anxieties about the sustainability of the platform business model in general and its capacity to deliver revenues and returns on investment. There are concerns, for example, that the proliferation of heavily capitalised platforms which are all seeking to monopolise market niches is undermining both the willingness of firms to provide unconstrained platforms with advertising income and the extant strategies of fee-earning constrained platforms (Morozov, 2016). Not only is the business proposition of unconstrained platforms troubled – it is based on the capitalisation of revenues from the collection, analysis and sale of data to advertisers – but a round of destructive competition amongst constrained platforms becomes necessary to their prospects for revenue growth. What needs to be subjected to further and urgent scrutiny, then, is whether investors and fund managers will continue to write ‘bigger checks’ for platforms with high ‘burn rates’ and thereby continue to sustain the present landscape of platform capitalism. Notes 1. <http://www.ukcfa.org.uk/members/> 2. <http://p2pfa.info/p2pfa-members/> 3. <http://www.whitelabelcrowd.fund/> 4. The computer game industry has generated its own field of research described as ‘platform studies’ (Apperley and Parikka, 2015). While this may hold useful pointers for subsequent studies of platform capitalism, it is not our focus here. 5. See, respectively, <https://www.seedrs.com/invest/why_invest_in_startups#invest/>, and <http://www.crowdcube.com/pg/investing-your-money-1513/>. 6. See, for example, the discussion on this subject in The Economist’s Free Exchange blog: <http://www.economist.com/news/finance-and-economics/21705831-new-technologies-will- make-society-richer-cultivating-trust-believing-seeing/>. 7. <https://www.skillshare.com/teach?via=homepage/> 8. <http://us.spindices.com/indices/equity/sp-500/> 9. 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