Session 5 - Digital Platforms Flashcards
When is a system called a platform?
Platforms orchestrate the flow of money and goods between the different sides of the network. They unlock new value from spare resources and user generated content. The system must provide useful function/ service and allow 3rd party access. Products have features vs platforms have communities. Some examples:
1. iTunes: get music onto iPad
2. SAP: execute ERP systems
3. Facebook: connect family, friends and acquaintances
What are the properties of a platform?
A platform is…
… a nexus of rules and architecture
… open (or closed), allowing regulated participation
… actively promotes (positive) interactions among different partners in a multi-sided market
… scales much faster than pipeline business because it does not necessarily bear the costs of external productions
… no cost to grow their market share and requires little to no investment
Examples of product-based businesses: Kruidvat, L’Oréal, Coca Cola —> linear value chain
Examples of platform-based businesses: Facebook, Google, Spotify
