A Deloitte article I read the other day ended with this emphatic message: “a platform business is not [an] opportunity, it is an imperative!”
I couldn’t have put it better myself.
The reality is that B2B tech vendors can’t go it alone anymore. Modern customers don’t want to deal with an ungainly set of fragmented apps and systems, they want one holistic solution that seamlessly fits into their workflows to deliver real results. That’s why firmly embedding your product or solution in your customers’ tech stack requires connecting with other tech companies and related service providers to collectively solve for the customer.
What is a ‘platform business’?
Before we go on, let’s make sure that we’re on the same page terminology-wise. As the Deloitte article explains, a ‘platform business’ in the sense we’re using it, is a business model – not a technology framework – that helps facilitate interactions across many participants to achieve a shared goal or serve a common customer. “The role of the platform business is to provide a governance structure and a set of standards and protocols that facilitate interactions at scale so that network effects can be unleashed.” (Deloitte.)
For a B2B SaaS vendor, embracing a platform ecosystem strategy allows you to leverage the skills, products, expertise, and services of your network of partners to deliver powerful, collaborative, end-to-end solutions designed to supercharge your customers’ business outcomes.
Begin conceptualizing your platform ecosystem strategy by asking three important questions.
HubSpot’s Avanish Sahai recommends asking yourself three key questions in the initial stages of formulating your platform ecosystem strategy:
· Am I making it easy for my customers to do something important?
In other words, how can you make your customers’ lives easier by moving to a platform business model? Sahai gives the example of Stripe streamlining online payments by providing API access.
· Do I have a lot of valuable data to share with partners?
Having a lot of valuable data to share puts you in a strong position to attract and help partners.
· Can I automate a broader process and, by doing so, significantly drive more value?
“You are building and automating a business process by connecting various apps to a core,” says Sahai. This speaks to the point I mentioned earlier, that modern B2B customers want holistic solutions that seamlessly fit into their daily workflows by integrating with other apps and systems.
Create a strategy that encompasses the entire business mindset, not just the tech.
Transitioning to a platform business model requires more than just developing a core piece of tech that partners can build integrations for. Mika Ruokonen of Futurice warns that many companies stumble when designing a platform ecosystem strategy because they focus too much on the tech and not enough on vital business aspects like customer acquisition, customer value creation, business concept development and validation, and culture and mindset changes. To succeed as a platform business, you need to instill an ecosystem-first mindset in every department in your organization.
Read my previous post, The importance of partnership co-design in your ecosystem strategy, for insights into designing an ecosystem strategy that takes the behavior and needs of all stakeholders into account.
Create a partner program that puts your partners first.
Of course, there can be no ecosystem without partners. Your partner program is an essential part of your platform ecosystem strategy, and needs to make it clear what partners stand to gain from partnering with you, as well as what you expect to gain from any partnership. Read my other articles, Key considerations when building a channel partner loyalty program and Three ways to strengthen your SaaS partner program for insights into building a successful partner program.