Why platform businesses are worth it

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Why platform businesses are worth it

We’re moving into a new age of business – the platform age. The likes of Uber, Airbnb, Alibaba and Apple are prime examples of platform businesses – but it’s not just for the big guys. Becoming a platform business is about changing the way you think and embracing a new style of business.

What is a ‘platform business’?

A business platform is an ecosystem, and it’s worth noting that platforms are not new. One of the oldest platform industries is print, where newspapers and magazines connect their advertisers with readers. A newspaper is a product in its own right, but it also creates an ecosystem of readers, reporters, advertisers and other ‘sister publications’ (weekend editions, colour supplements and the like) that exchange and deliver far more information than ‘just’ the newspaper itself. An online platform is similar to this model.

Incorporating a platform into your business, rather than necessarily transforming your entire business into a platform, could be the key to survival and growth in the modern marketplace.

By incorporating ‘digital’ into their offerings, organisations make it easier for customers to connect with them and foster a climate of co-creation. The classic example is adding an online store to a physical distribution network. This provides new ways for customers and stakeholders to interact and creates possibilities for new products, services and revenue streams.

Transforming a traditional offering – whether products, services or a combination of both – into a platform might seem like an epic task, but with the right technology partners, it is completely achievable.

Self-knowledge is the key

Begin by clearly defining your organisation’s current business model, and identifying some key factors:

  • What is the experience you provide your customers?
  • What part of that experience is unique to your organisation?
  • What parts of that experience could other organisations provider more efficiently?

The goal isn’t to reduce your business’s scope but rather to focus on the things you do best. By adding digital capabilities and partners you can, for example, add recommendation engines, suggest value-adds and further service opportunities and so on.

This means you’ll be able to provide your customers and stakeholders with a richer and more complete experience, building their loyalty and creating lasting relationships with you and your partners.

The platform model won’t be for every organisation, and not all product types or services are suitable. But if you’ve been feeling that your business has unrealised potential, that the audience for your product could be larger, it could be a gamechanger.

Re-platforming takes time, planning, and careful development and testing – but it could just catapult your business to the next level.

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