While several emerging technologies such as AI, IoT, blockchain, and others enable significant economic changes, the time is ripe to make transformative changes. Hence the business as a platform!
When engineering and electronics giant Siemens wanted to launch hearing aids for kids, they faced an interesting challenge. Leadership was contemplating, “How do you market hearing aids to kids?” Despite being a necessity, how do you make them attractive? How do you make them look cool and not weird?
Now for all their experience and technical expertise, these questions were far out of their comfort zone. Their history, their strategy, their culture had never encountered a challenge of marketing technology to kids.
The first question they asked was, “Which of our full-time employees can take this assignment?” Unfortunately, the answer turned out to be, “No one.”
Then the leadership team reframed the question and asked, “Who gets kids to do this job better in the world?” This time, the answer was obvious, “Disney.”
Eventually, Siemens and Disney collaborated for a longer term. Siemens essentially borrowed Disney employees’ services for this work.
This is a classic example of how building your business as a platform can expand the gamut of your offerings and take your business to a whole new level.
Collaboration is the best choice when you’re faced with challenging work out of your comfort zone.
Building your business as a platform
Every time I strike a conversation talking about business as a platform, people often misunderstand the context. They think that I am talking about typical digital platforms with which most of us are familiar.
However, these digital platforms mainly act as broker services in the B2C sector. Whether it is Uber, YouTube, Amazon, or Airbnb, and some others. They enable smaller companies or individuals to sell products and services to consumers. They connect buyers to sellers and vice-versa.
These businesses do not necessarily create content, produce any product directly, or own any core assets. Instead, in most (or all) cases, their value comes from facilitating the business, data, and analytics.
On the contrary, a traditional business model centres around a core process. And business manages and executes this core process in-house. It, however, often creates bottlenecks and increases dependencies on external factors. But more importantly, it poses an adaptability problem as customer demands change rapidly.
While several emerging technologies such as AI, IoT, blockchain, and others enable significant economic changes, the time is ripe to make transformative changes. Hence the business as a platform!
The main idea
A typical platform business model suggests you become a facilitator of exchange between producers and consumers. So, by that definition, this model heavily relies on other entities in the ecosystem to make this model work. However, there is also a common expectation and understanding that platform businesses need not own any production assets.
However, business as a platform is a different paradigm. In this case, if your business owns production assets, you do not need to relinquish them. Instead, you must think of repurposing and augmenting them differently.
Take an example of Microsoft or AWS, for that matter. They use a similar business model for their operations. They use their business assets in two ways. First, to run their own business, and second, to lease them to others.
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