10. Platforms

Question 1

Why do we even care about platforms?

Answer 1

Because they highly representative among the top 10 when it comes to profitable companies and most valuable companies in the world. Ex Apple, Google, Amazon etc.

Question 2

There are two types of evolution of platforms, which?

Answer 2

1. Technical evolution

2. Supply/demand evolution

Question 3

How does the technical evolution of platforms look like?

Answer 3

We have a technical evolution that drives the evolution of platforms and makes them larger and more common.
1. First platform was around mainframes and mini computers. We hade million of users and thousands of apps.
2. Then client/server and LAN/internet came and increased the number of users and apps.
3. Now in the third platform era, we have mobile, big data, social interactions and clouds that have led us to billions of users and millions of apps.
The largest step from 2-3 is the social activities that are integrated now.

Question 4

Give example of platforms and years of the different platform eras:

Answer 4

1. Mainframe computers. Starting in early 1950s. Then in 1980 we had millions of users booking flights for example in Apollo Travel Services etc.
2. In the mid 90s, WLAN/Internet had its breakthrough and now we started using platforms for ERP systems like SAP.
3. Then from 2000s until now, cloud computing have led to platforms being “social” like Facebook and Snapchat.

Question 5

Demand side evolution of platforms, how could it work?

Answer 5

Companies can nurture their users’ enthusiasm and support them through 3 stages:

1. Structuring an external product “love group”.
2. Transforming the love group into earl platform adopters.
3. Leveraging early adopters to accelerate platform adoptions.

It’s all about attracting users so that the positive cross-group network effects kick in. But the chicken-and-egg problem is hard to overcome.

Question 6

Supply side evolution of platforms, how could it work?

Answer 6

Here you still need to listen to customers, but it’s not the focus. More process-oriented and focus on optimisation of processes.
Three different ways:
1. Internal Product R&D and external complementary (need complementing products to increase compatibility, and reduce competitors).
2. Internal product R&D and blended complementary and community management.
3. Hybrid business model management.

Question 7

What is the difference between product based disruption vs platform-based disruptions, when it comes to the effects on the market?

Answer 7

The difference is that product based disruptions have a strong within-industry effect. Ex the battle for the best mobile phone, iPhone vs Samsung.

But platform-based disruptions have effect not only inside the industry but also well beyond industry boundaries. And can even make industries collapse.

Question 8

If a platform idea does not reach the market, is it the end?

Answer 8

No just look at Napster which had a great idea but did not really make it right/profitable –> soon after the idea was copied and they were able to do the idea legally correct: iTunes and Spotify!

Question 9

High-end disruption =

Answer 9

Entering a market with a product/platform which is superior to incumbents - a high end disruption is expensive and challenging. Tesla is an example.

Question 10

Low-end disruption =

Answer 10

This is more common, linked to frugal innovation. Like cheap mobile phones. Making a product less expensive or small improvements.

Question 11

New market disruption =

Answer 11

Emerges from non consumers and creates new categories - ex how Apple with its iTunes changed the music industry completely.

Question 12

Low vs high-end disruption with platforms: comment on their prevalence

Answer 12

High-end platform disruptions are very uncommon and are often derived from open innovation initiatives.
Low-end is making things cheaper, like lending-platforms where people can lend things to each other. ex car-sharing.

Question 13

What are the keys for success with a platform?

Answer 13

• To have a defined and clear product that is great (cannot even think about a platform if there is ambiguity around the product)
• Attract a critical mass
• The product is defensible
• Establish a positive feedback loop (make it attractive for others to join the platform)

Question 14

Hybrid model with both a focus on product AND platform, how?

Answer 14

Focus on creating and sharing values. Create value by connecting users, facilitating interactions. But first of all, be clear about the product offer and how it matches the customer needs.
So you can make money both on the products and the value you create through facilitating interactions.

Question 15

How can you drive rapid conversations to the new platform? 3 things

Answer 15

1. Provide high value
2. Stay consistent with your brand
3. Involve users in improvements.

Question 16

What is one of the hardest challenge for platforms?

Answer 16

To identify and act on opportunities to deter competitive imitation. The core question is: what can we as a firm control ourselves in our ecosystem?

Question 17

4 best practices for establishing a platform and help ensure success:

Answer 17

1. Defendable product and critical mass of users.
2. Hybrid business model focused on creating and sharing new value
3. Drive rapid conversation
4. Identify and act on opportunities to beat competition.