Airbnb, Uber, and Google are some of the best examples of successful companies that are using a platform business model. Such a model holds big promises, but a lot also have reservations on adopting such. In the rest of this post, learn about some of the basics of a platform business and how to make it work to your advantage.
It is Never Easy
This is perhaps the first thing that you should know. A platform may look straightforward in paper, but in reality, it is challenging. This is especially true for novices who do not have the knowledge in such field. Success can be elusive if you do not get started on the right foot. Fortunately, there are companies like Vivaldi Group with a team of professionals who can extend the assistance that you need. With their expertise, it will be easier for you to understand how platforms work, and consequently, how you can succeed.
Interaction Over Production
One of the key differences between a platform and a traditional business is the fact that the former is built on interaction, not production. According to Harvard Business Review, a platform brings together producers and consumers to make high-value exchanges. Interaction and information are two of the most important things that will make the business successful. This is as opposed to traditional models wherein there is a production necessary. With a platform, the more interactions are present, the more valuable a business becomes.
It is All Because of the Internet
Platforms would not have risen to fame if there is no internet. This business model is technology-driven, taking advantage of the internet to create interactions between its users. The creation and consumption of value are done online. To improve customer experience in a platform business, you need to provide a website or a mobile application that can deliver the highest level of satisfaction. Uber, for instance, has created an app that allows users to easily book for services provided online. The same thing is true for Airbnb, making it effortless to connect property owners to potential renters. More so, since it is done through the internet, security is also one of the main concerns amongst businesses.
Elements of Success
A successful platform business strategy will require three things: connection, gravity, and flow. Connection refers to the convenience of connecting and sharing for the best experience amongst users. Meanwhile, gravity is concerned about the attraction participants, which will include both producers and consumers. Lastly, flow refers how well the platform can trigger exchanges for the creation of better value. All of these elements must be present for the platform business to achieve success.
In sum, a platform business model is all about creating value through interaction and exchanges. It is a model wherein the internet provides the tool for producers and consumers to connect. It holds a lot of promise, but you are doomed to fail if it is not done with caution.