Most business strategies are built on a linear way of creating value: the company has a resource of some sort, a process for refining and distributing it, and then they sell it for a profit.
A platform strategy, on the other hand, is built on the company creating a space for others to meet and buy and sell their resources, products, or services.
A platform strategy is when the company connects producers and customers (or other groups of stakeholders) and provides an ecosystem of services where they can come together to create synergies and value.
Many successful companies have built their businesses on a platform strategy. Commonly used examples are: Airbnb – a hotel chain without a single hotel; Uber – a taxi company not owning a single car; and Apple’s App Store – a platform where other companies can sell their apps to Apple’s consumers.
According to Anders, this is the most interesting business model to explore if you have the opportunity. Why? Because every dollar succeeded in growing your platform has the potential of getting exponential value back.
What you are investing in is the opportunity for others to help you. When you invest in scaling and improving your platform, you have the opportunity to add more producers or more consumers who are going to invest their blood, sweat, and money into creating value together. And therein lies the potential for exponential growth.
Sounds great, right? Why would anyone not want to find a business model with a platform strategy? Well, according to Vadim, you need to be amongst the top three in your industry to attract people to your platform. And since most companies with a platform strategy usually bleed for several years before becoming profitable, you also need to have a lot of money.
If that didn’t scare you off, we suggest listening to the whole talk where Vadim goes on to tell you what you need to succeed with your platform strategy, and Jimmy shares a few creative business ideas involving platform strategy that were co-created as a fun task in another session at myConf.
PS. This presentation was put together with very short notice when one of the scheduled speakers had to cancel due to illness.