Platform means different interpretations in different contexts. Adding the digital context is part of addressing the questions that arise on what platforms mean for businesses. While beginning to figure out what platforms mean in the context of the business, several challenges arise. Practitioners come up with at least a couple of perspectives for drafting platform strategy for business – A business model perspective and technology infrastructure perspective.
News on platforms goes with mega-success stories and impact at the global level. Such stories inspire aspiring business professionals to take on the journey in whatever capacity they think feasible. The impact of the rapid development of technologies that support the platforms dreams increases the tendencies to have ambitious goals around the new approaches to growth, achieve scale, and find new avenues for value creation.
In established businesses, the challenges are two-fold to the professionals involved in making a plan for embarking the platform journey. First, the leaders may not be well prepared to lead people with the initial plethora of questions that arise. For this, the leaders must understand that expertise and research in this area is evolving. There are many experimental approaches which can prove a success/ failure in their specific context. Second, the challenge for the aspiring professional is not to be overwhelmed on the abundant success stories as well as the lack of models to fit their business context.
Look for unifying frameworks while paying attention to the glaring and subtle differences. Get a grasp on the fit for the context. A social platform can be a Facebook as well as YouTube or Twitter – completely different business models. A development platform like Android operating system, Salesforce along with its market place is quite different with its traditional counterparts of open-source Linux or Windows Operating systems. Both Uber and Airbnb are market place platforms bringing new options to consumers affecting their day to day lifestyles, but their community-building approaches are totally different. What is common among these is all these platforms have an “Interaction first” theme around their design. They are connecting producers and consumers in new ways using digital capabilities with little initial investment. They are plug and play business models with highly modular artifacts enabling the quick evolution and scale with less hierarchical intervention.
In Sangeet Choudary’s platform stack , there are three layers to explain platform – the infrastructure, market place, and data. Each of the platforms we hear about has invested in at least one of these layers differentiating themselves with new and often disruptive designs to create value. Some practitioners explain platforms around their journey towards building platforms from their current business models and content distribution mechanisms. This approach is more common with the incumbents who are facing the trends of platform businesses.
The disruption is clear when we hear the need for regulation when the impact is on the health of the societies. Caution with governance mechanisms is required to avoid competitor’s exploitation in the name of competitive advantage. Governance and regulation must be meaningful for the platforms. Platform designs take advantage of the presence of competition. There are several instances of how traditional boundaries are crossed in the virtual, digital world of platforms – often discovering traps and pitfalls leading to better orchestration of the boundary resources as a remedial strategy.
Significant academic and market research contributed to design choices and frameworks around the basic questions on design and strategies for platforms. The fundamentals of design frameworks include topics about architecture, value creation, governance mechanisms, and competition. For starters, read here. The authors bring to the table several easily available resources, mostly research articles to chart out the design issues around an established design framework. A crucial requirement is to get the sponsorship preparing for distributed leadership. Everything on the web is public and open, backed with steps toward building trust and reliability in the digital networks. What works on the ground is traditional. Much needs to be thought ahead on reputation building on the web.
There are a few significant principles around networks that successful platform makers achieve. These principles are the DNA of the platform makers themes in everything they do whether it is carefully evolving the designs or preparing for the emergence of their platforms. For thinking in networks, read Linked carefully. On the author’s website, there are downloadable chapters too. This book helps understand how to envision the seemingly random phenomena around major events that happen due to the nature of the web-based frameworks. The impact of web-based networks is borderless, spread across societies and businesses. Complexity leading to chaos is an inherent property of large networks if not managed and strategized well. For many professionals, careers and contributions seem to take the “red queen effect”. To avoid stagnation and cautiously embark the journey, the new rules of the business games can be understood with an eye on the happenings on networks around.
Platforms and ecosystems are often associated with the digitization initiatives in the company. The Digital is often associated with all the newly evolving technologies in the Internet era and also their convergence – Social, mobile, cloud models built around networks using big data, AI, machine learning, collaborative applications. Disruption and transformation are the big themes around digital. Going Digital includes preparation and building capabilities for the internet age. incumbent businesses must be clear about the impact of the newly evolving technologies and business models on their business value proposition to make the right decisions at every step of the journey.
Finding a place in the more complete ecosystem dynamics is associated with their business models and several early decisions. We will discuss a few fundamentals about ecosystems in the write up on Ecosystems
Suggested Online Readings:
https://platformed.info/platform-stack/
Books:
Network related fundamentals:
Linked (for downloadable content check out: http://barabasi.com/book/linked).
Business Related fundamentals:
Match Makers: The new economics of multi-sided platforms
by David S Evans & Richard Schmalensee
(https://matchmakereconomics.com)
Platform Revolution: How networked markets are transforming the economy and how to make them work for you
by Geoffrey D. Parker, Marshall W. Van Alstyne, Sangeet Paul Chaudary
EdX course: Platform Strategy for Business is based on the Platform Revolution book.
https://www.edx.org/course/platform-strategy-for-business-2
