Platform Success Is Key to Today's Market
In today's technology market, there's a paradigm shift away from the product and towards the platform, according to ORBIT+Co's Mark Bonchek and Singapore entrepreneuer Sangeet Paul Choudary. But, with the swift advent of the technology platform, from web services to social networking, creating a platform that's both engaging and useful seems like an increasingly difficult feat.
Well, Boncheck and Choudary set out to find the integral elements to a successful platform in their latest blog. And, as companies move away from exhausting their energies in a product – and increasing focus on the services of said product, the ability to implement these elements with success will be a crucial competitive moment for these companies.
What's atop Boncheck and Choudary's checklist? A platform has to make it easy for consumers to 'plug in' to its capabilities – and with ease, it has to foster co-creation, and equally important, a platform must allow for participation on both the production and consumer side.
As for goals that a platform should strive to achieve, Boncheck and Choudary lay out three main ones:
The Toolbox creates connection by making it easy for others to plug into the platform. This infrastructure enables interactions between participants. For example, Apple provides developers with the OS and underlying code libraries; YouTube provides hosting infrastructure to creators; Wikipedia provides writers with the tools to collaborate on an article; and JC Penney provides stores to its boutique partners.
The Magnet creates pull that attracts participants to the platform with a kind of social gravity. For transaction platforms, both producers and consumers must be present to achieve critical mass. Apple needed to attract both developers and users. Similarly, eBay needed both buyers and sellers. Platform builders must pay attention to the design of incentives, reputation systems, and pricing models. They must also leverage social media to harness the network effect for rapid growth.
The Matchmaker fosters the flow of value by making connections between producers and consumers. Data is at the heart of successful matchmaking, and distinguishes platforms from other business models. The Matchmaker captures rich data about the participants and leverages that data to facilitate connections between producers and consumers. For example, Google matches the supply and demand of online content, while marketplaces like eBay match buyers to relevant products.
"Every business today is faced with the fundamental question that underlies Platform Thinking: How do I enable others to create value?" Boncheck and Choudary said. "Building a better mousetrap still might not have the world beat a path to your door. But the right platform might just do the trick."