Platformit — Part Six — Platform Value Propositions

In part five, we dove into the platform’s narrative, and we explored how the platform’s architecture must empower the core interactions on top of the platform through a narrative lens.

In this part (part six), I want to invite you to explore another dimension of platform thinking and design: the juicy part.

In the previous parts of this story-telling white paper, we discussed how investment banks (in the GCC) shrunk their time horizon to quarterly intervals barely to survive. And we also covered how regulators sharpened their claws to discipline the wrongdoers to fix the unfixable. Unfortunately, the investors who technically suffered the most (wealth destructions), were not taken as a true partner in the recovery process. As such, the investment banking industry didn’t recover from its illness. For example, if you ask a bank about their investors’ journey, you will get a rosy story; on the other hand, if you ask investors, you will get a totally different story.

So, to change the above reality, we must introduce design thinking into the game — not merely shouldering everything’s on best practices or regulatory initiatives. Accordingly, we envisioned the implementation of an industry-wide platform model.

In this part, I will be introducing a new tool that can help us understand how a platform-based business models can amplify the value creation chain: A tool can give equal weight to all stakeholders (banks, regulators as well as investors) in the value creation process. A tool can assist us in visualizing the unseen, by going beyond the narrative of finding a problem and trying to solve it (product-market fit) to a more profound narrative that can unlock hidden potentials (platform-ecosystem potentials). An excellent read on this topic can be found here by Simone Cicero.

So, let us unpack the ideologies behind this tool: The Platform Value Proposition Canvas “PVPC.”

First, we need to accept that the conventional economic concepts underpinning value chains are no longer able to meet our exponential demands. Moreover, within the platform universe, we don’t own the means of productions (resources, assets, human capital, etc.). Our competitive advantage as platforms rests in our ability to orchestrate efficient, scalable, and repeatable core interactions between supply and demand.

With such new dynamics, we need a tool to help us visualize how interactions can take place within multiple layers.

Phase one: Inspired by Alex Value Proposition Canvas

Based on the above paragraph, my starting point was to merge the circle with the square in the Value Proposition Canvas (bringing demand and supply face-to-face). This is an indication that value creation within the platform universe is shifting from being linear (i.e., from point A to point B) to multi-directional.

The platform competitive advantage is in being a genuine derivative of the best interactions that can bring the right demand to the right supply.

Phase Two: Inspired by Sangeet’s Platform Architecture

For such a tool to generate the envisioned ripples, I needed a V12 engine to generate enough power to unlock hidden potentials. Fortunately, I know the mastermind (Sangeet Paul Choudary) behind such an engine. As such, Sangeet’s platform architecture has been placed in the heart of PVPC.

Phase Three: Inspired by Simone Cicero’s Ecosystem Thinking

Inspired by Simone’s Ecosystem Entity Portrait, which designed to unlock potentials within the platform’s ecosystem, I added three layers of value creation to the PVPC as well, with an aspiration to penetrate the ecosystem frontier.

Phase Four: Infusion of Profound Ideologies (Christensen & Hagel)

The PVPC can help us to visualize how the platform architecture can enrich the core value proposition, by enabling multi-core interactions to take place within different layers — where each layer operates under a unique ideology and mindset.

The first layer, “J2bD,” is built around the ideology of Clayton Christensen: “Jobs to be done.” This is a foundational layer. This layer is why your platform exists: to enable an efficient interaction between supply and demand so that they can solve each other’s problems. This layer is about addressing the immediate needs of the consumers of value on the platform — identifying a pain point and alleviating it. This layer is leaning more toward a scalable efficiency mindset. In a Blue Ocean Shift’s language, this layer equates to “offering a breakthrough solution for an existing industry problem.”

The second layer, “C2bS,” is built around John Hagel’s “Contextual Age” theory. This layer manifests a huge shift from scalable efficiency mindset to scalable learning mindset. This layer focus on using the platform’s architecture, infrastructure, network and richness of its data to learn more about its users, as well as to empower the users to gain more within their specific contexts.

The third layer, “C2bE” or “creation to be empowered,” is my humble vision: potentials that are yet to be discovered within ecosystems (potentials, resting within ‘ecosystem of ecosystems’). Such potential cannot be attained by the platform and/or its users on their own. This layer harnesses scalable learning to tap into untapped opportunities outside the domain of the platform’s ecosystem. Imagine a platform that can enable a plug-and-play concept as advocated by Sangeet, but this time on the ecosystems level. I elaborated on how this might be possible here. In a Blue Ocean Shift’s language, this layer equates to “Identifying and solving a brand-new problem or seizing a brand-new opportunity.”

So, let’s see how the PVPC fits into our story-telling white paper.

Consumers of Value — Investors

With the PVPC, the platform can empower investors, to extract richer layers of values from the entire investment process and not just the anticipated financial return. We saw in part five how a simple feature (i.e., socio-investment conversations) can enrich and unlock new investment opportunities.

Producers of Value — Investment Banks

The layers of the PVPC can provide investment banks with a deeper understanding of their investors’ needs, appetites, and aspirations. Banks will be better positioned to test and gauge the market sentiment with live and reliable aggregated data. Such industry-wide platform can enable banks to access a wide range of investors base beyond their current capability and reach with a minimal marginal cost towards investors acquisitions.

Such industry-wide platform can provide a transparent channel for investment banks to collaborate with other financial institutions and stakeholders. In fact, it can stand as an innovative channel towards helping banks in exiting some of their legacy investments: maybe the banking industry can learn something from marketplaces, such as eBay-bank (auction-based-investment-exit: process to exit problematic assets, driven by sound economic propositions).

Influencer — Regulatory Body

The regulator will have unprecedented oversight and monitoring capabilities, which supersedes the current regulatory tools, by allowing it to part of the vibrant and live discussions between the supply and demand. Such expanded values will allow the regulator to anticipate in advance and with a higher level of accuracy any emerging trends that might require regulatory intervention in a proactive manner rather than a reactive mode.

The regulator can tap into a pool of skilled approved professionals outside its employment base: by appointing third-party professionals on a task-specific basis to complete ad-hoc assignments.

Value Propositions beyond the Platform’s Ecosystem

If you are using a tool that is designed to find a single problem, you will end up by creating a single value to fix such a problem. But if you are using a tool (which encapsulates different concepts, theories, and ideologies) that can help you to visualize the creation of multiple layers of values, you may end up fixing much audacious challenges, which goes beyond the platform and its ecosystem’s domain.

Embracing such an expanded way of thinking about value creation can help an industry within a country to extend its hands to help the country to think as a platform — a concept theorized by Sangeet.

As we can see from the PVPC, the ripple effects of the cumulative live and aggregated data and experiences nurtured within such an industry-wide platform can provide the economy of a country a competitive edge over other jurisdictions. First, it can make an economy more resilient in the face of disruptive forces. Second, it can make an economy more adaptive to technological development.

On a macro-level, such richness of data nurtured within the industry-wide platform will embody within it a huge level of credibility by international players as well as other governments. Let’s take a hypothetical scenario to better understand this point.

Let’s assume that several banks in the Kingdom of Bahrain are testing investors’ appetite in the GCC to invest in the Australian (private equity) market via investment teasers, with a total value of $10 billion (USD) worth of private equities deals.

With such rich, reliable, and aggregated live stream of data along with a robust forecast of investors sentiment generated by the envisioned industry-wide platform, the relevant government authority in the Kingdom of Bahrain can reliably use such information to strengthen the Kingdom’s economic ties with Australia by easing and facilitating lengthy administrative procedures. Having a wealth of reliable economic information can even strengthen political negotiation capabilities toward further enhancing the economic welfare of the Kingdom.

On a micro-level, such an industry-wide platform can amplify the employment opportunities by retaining the Kingdom’s finest brains. A vast array of approved highly qualified professionals (e.g., CPA, CFA, ACCA, PRM, CIPA, CSAA, etc.) can provide their services as freelancers on the platform with a high level of autonomy.

The platform can provide Bahraini professionals with unprecedented opportunities to work directly with all key players in a highly secure environment. For some professionals, being on the platform can be their full-time job, and for others, it may be a transitioning period until they get a full-time job. When a bank, due to financial difficulties, decides to downsize its operations, this would mean that a pool of highly talented professionals will be made redundant. Such a platform can bridge such a temporary gap. You may want to visit part four on this point.

Approved third-party professionals can evolve within the second layer and third layers (C2bS) and (C2bE) to an elevated status. They can become trusted advisors in their relationship with investors. They can move from knowledge transfer to knowledge creation. Refer to part five for a visual representation of this.

Such trusted advisors can be a vibrant link between investors and banks, in exploring new opportunities, observing new trends within the industry and beyond, as well as seeing patterns between multiple sectors as well as across industries.

Between the micro-level and macro-level resides vast arrays of values. The PVPC can help uncover them. Moreover, the PVPC can show us how such an industry-wide platform can be considered as the Kingdom’ unified voice “one voice representing the Investment Banking Industry,” as well as it can be the Kingdom’s investment gateway. Anyone interested in investing in or from the Kingdom must pass through this gateway.

The illustration below can ignite our curiosity to envision countless interactions between different stakeholders:

• The Fintech community can be integrated into the platform’s ecosystem as a viable value proposition (i.e., allowing fintech to provide its ancillary services to investors) to enhance the core value proposition.
• The private sector’s interest can be aligned with the potentials that is resting within the ecosystem. Universities can align their educational program with the richness of the ecosystem’s expertise.
• Investment firms can greatly benefit from such wealth of opportunities by collaborating with investment banks.
• Retail banks can also play an integral role as a growth engine. Further details on this point will be provided in the upcoming parts.

Ok, let us stop here. I hope I managed to convince you that using such a tool (PVPC) can expand your horizon from fixing a single problem to be courageous to change an industry or even an entire economy.

See you soon in part Seven. Till then you can do something useful with your hands. Fifty (50) CLAPS will make me happy and will make you feel warm in this cold winter.

You are most welcome to connect via https://twitter.com/KhalidiAlmadani or https://www.linkedin.com/in/khalid-al-madani-2009a1160/