Platforms are eating the world! While not every business is becoming a platform business in the strictest sense, every company needs to re-examine its business model and consider adopting platform elements if they are to survive in the new ecosystem oriented economy.
Geoff Parker is a professor of engineering at Dartmouth College, as well as a visiting scholar and research fellow at MIT. He is also the coauthor of “Platform Revolution: How Networked Markets Are Transforming the Economy and How to Make Them Work for You.”
Greg and Geoff cover thinking of companies as pipelines, the case of McCormick Spices, pitfalls companies make when trying to launch platforms, and governance issues.
Episode Quotes:
Platform governance issues:
Geoff: So the way that I think about platform governance is, do they have rules essentially to ensure fair treatment of users?
Greg: This is like, it's almost like due process.
Geoff: Exactly Is there due process and do they have the ability to actually credibly deliver that? So if you have a dispute, is there a resolution mechanism? If they said they're going to charge 10% or whatever, did they or did they charge 50%? If they said they weren't going to basically replicate your technology and, sort of destroying your particular app or business, did they adhere to that in a credible way?
How do you retroactively take something that was built in a more appliance like format converted into a modular system?:
Some things actually just need to do a single thing and do it really well. And then other things can be built in this more modular format. So I think it's being intentional about where you need to be delivering basic electricity and just do it at scale, basic compute, do it at scale. Versus, okay, now I've got to have this mix and match or usability, and that's where I'm going to invest in making that possible.
What are some pitfalls people make when trying to launch platforms:
The ones that I think are really deadly are where they try to capture value before they create it for users. That's a cautionary tale, I think, especially for incumbents who are pipeline firms. Then they analyze, they dream up some total addressable market and they get starry-eyed and get all excited about that.
How do you first brainstorm a platform idea for an existing company:
So, essentially I think the way to think about it is how do I find different sources of value that my users, and the users can be on the supply side or on the demand side, can take advantage of that will make it stickier.
Show Links:
Guest Profile:
His work:
Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.
