Platform Strategies

As economic entities, platforms have been around for a long time. 

For example, a strip mall or shopping plaza is a multi-sided platform.  There is a platform owner (the developer/landlord).  There are a number of parties that must be brought together in a series of transactions in order for the platform value to be realized:  merchants, consumers, and a range of different suppliers and service providers (suppliers of goods, public utilities, financial service providers, workforce, etc). 

If  it’s done right, all parties will obtain a part of the economic benefit in different proportion.  If not–and in worse case, there are not enough or no relationships and transactions– the platform will have little or no value, despite the investment made in building the facility.  Fortunately, there are well established practices and knowledge that the would-be strip mall developer can draw upon (for example, make sure you secure an anchor tenant early in the planning process).

But while platforms, as economic entities, have been around for a long time, a number of things have been changing in the past couple of decades:

  • Information technology and trends toward “virtualization” across many dimensions (technology, interaction, services, etc.) have established new conditions that stimulate the spawning of platform entities (in technology, products, and businesses).
  • New types of platform entitities have begun to more commonly and frequently stare us in the face (businesses like Amazon, Google, or eBay to name just a few very prominent examples among thousands and thousands).
  • While not previously a sub-discipline in the economic sciences, over the past 20 years or so, there has been increasing attention to platforms as entities in technology, products, and businesses (though this sub-discipline is in its infancy, especially in terms of understanding modern platform businesses). ***

So certain conditions are now leading to an accelerating rate of platform business generation.  And new types of platform businesses are being spawned.  And, finally, the underlying conditions are continuing to change–including technology (like Cloud) and demographic-specific attitudes and behaviors (like the smart phone generation)–and the platform business models are continuing to morph. Consequently, there is a lot to learn about platform businesses, and from my perspective, it is clearly important to start learning it and applying it.

***  For one of the most recent collections of recent research perspectives, see Gawer http://www.amazon.com/Platforms-Markets-Innovation-Annabelle-Gawer/dp/1848447892

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