The Sacred Myths Of The Platform Economy
How do you “Earn Your Place In The Platform Economy?” The short answer is: Start with a real customer problem, not ecosystem envy. Forget everything you know about platform businesses . . . most of it is a myth. And it’s a terrible recipe for building one.
- Myth #1: Every platform business is a marketplace. Reality: Every platform business starts with a killer app for customers. Some earn marketplace status. (See below figure.)
- Myth #2: There are only two or three platform business models. Reality: There are as many platform business models as there are actual business models.
- Myth #3: Platform economies are always winner-takes-all. Reality: In most industries, platform businesses will fight for share in different parts of the value chain: distribution, production, supply.
- Myth #4: If you build a platform, developers and customers will come. Reality: Every day, you must earn the trust and investment of customers and developers by solving their immediate problems.
Ping me if you want to learn more. Nigel Fenwick and I have identified three practices you need to build a successful platform business, together with the blueprint for using them:
- Integrate forward to embed services into your customer’s world.
- Maintain a clearheaded commitment to commercialize services via APIs.
- Embrace the stepwise approach pioneered by the software industry.