In my previous post, What to consider when designing your platform ecosystem strategy, I talked about the concept of a platform ecosystem business model, and it’s worth recapping here: a platform ecosystem business model is a business model that helps facilitate interactions across many participants to achieve a shared goal or serve a common customer. In addition, “[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.)
In the context of B2B SaaS vendors specifically, one of the major benefits of following a platform ecosystem business model is that it enables you to leverage the services, skills, and products of your network of partners to deliver collaborative, end-to-end solutions to your common customers.
To be clear, it isn’t necessary to become a ‘pure platform company’ to enjoy the advantages of a platform ecosystem business model. “You do not have to become a platform in order to enjoy ecosystem platform benefits,” says Allan Adler of Digital Bridge Partners. “If you platform any aspect of your offering, that is, that you allow others to co-innovate on that platform, you are essentially engaging in a platform business model.”
How does supply and demand flow in your ecosystem?
Adler recommends taking cognisance of how supply and demand flows in your particular ecosystem. Most often, your partners represent supply and your customers represent demand, but Adler points out that not every ecosystem functions in this way. For example, data platforms consist of a range of companies that supply data and a range of companies that consume data; and sometimes, customers are the data suppliers while partners are the data consumers.
Five major platform models exist, but many successful companies embrace hybrid models.
Adler goes on to provide useful explanations of five platform ecosystem business models:
· Innovation Platforms allow individuals and companies to build applications, typically on a PaaS;
· Process & UX Platforms allow people to work together to accomplish something beyond the capabilities of any individual participant vis a vis APIs and integrations;
· Data Platforms aggregate, share, and provide analytics and insight, generating data through usage of the platform service;
· Transaction Platforms manage and facilitate commercial relationships and create network effects between producers (sellers) and consumers (buyers);
· Infrastructure Platforms monetize by selling their services to developers, often invisible to end users.
Note that you don’t have to choose just one platform model for your organization. In fact, companies like Apple, Google, and Microsoft thrive by adopting hybrid models that include the functionality of two or more of the models listed above.
Learn from the experiences and insights of successful ecosystem leaders.
When the World Economic Forum and Deloitte interviewed the top brass of 15 leading digital platform and ecosystem firms in both the B2B and B2C spheres, a few core lessons emerged. When building your platform business, keep the following insights in mind:
· Define your platform’s value proposition by clearly defining the gap in the market that your offering fills.
· Scalable tech is key to ecosystem growth; ensure that your platform and infrastructure can manage future complexity.
· Focus on ensuring a balance between supply and demand by meeting the needs of your customers while nurturing your relationships with your partners.
· Build on your existing core competencies by identifying skill sets that need to be brought into the company or outsourced.
· Stay agile and prioritize culture change. Embracing a platform ecosystem business model requires establishing a new way of thinking that is shared by the entire company and outside players. Continue experimenting and focus on educating all stakeholders to move the ecosystem forward as a whole.