The latest buzzword for the past decade has been Platform . Some best examples of platforms are Google, Uber, Airbnb, Facebook, Youtube,Alibaba ,Paypal. When compared to Platforms , products seem like an outdated concept. But in reality is one better than the other? Lets Explore what the hype is about….
Platforms facilitate network behavior
Platforms promote interactions between individuals X, Y , Z irrespective of professional and cultural background . The allow people to express their opinions on virtual walls, thereby broadcasting messages in form or another. They also lure potential customers, since existing ones serve as advocates for the platform Ex: Facebook
Platforms offer a Two-sided market
Acts as a stage for various kinds of stakeholders to come together and carry out their businesses. The host/producer uploads their spare resources and the guest/consumer avails the same, hence profiting both sides of the market. The supply, demand and value are controlled by the platform. An example of the same is Airbnb
Platforms serve as Innovation catalysts
Since they serve as a means or base for collaboration and interaction , they also facilitate innovation. They are easily scalable and expandable to any other horizon. Due to the close collaboration involved, new ideas could arise which would benefit both sides of the market. Ex SAP community
Platforms generate multiple revenue streams
Unlike products, which rely on single revenue streams, platforms can serve multiple purposes. An existing platform can be expanded into other revenue generating streams. For ex Linkedin which was a platform for professionals to network, also introduced LinkedIn Learning, which offers numerous courses for professionals, thereby generating revenue for the platform
Platforms thrive on the concept of ‘Emergence’
The value derived from a platform could be unexpected and an emergence of its inherent products. The main reason for the emergence being network effects and opening the platform for 3rd party collaboration. One of the best examples where this can be observed is Amazon, which started out as a website to sell books and today it has entered all possible markets with its subsidiaries and products such as Amazon Fresh, Amazon Prime Video, Amazon Kindle, Amazon Audible, Amazon Web services, Alexa etc
In conclusion, as it can be seen by the above points and examples, the power of a platform is much higher than the product itself.