Will everything become a platform?
Recently, I read some interesting articles on the power of digital platforms and my curiosity led to this post.
In a nutshell, platforms are created to solve problems that would traditionally be solved by a manufacturer or a service provider in a value chain. Platforms enable the creation and exchange of value between users with the firm, most of the time, a startup, acting as an infrastructure enabling users to interact.
So far, the rise of digital platforms has been driven by the nexus of forces: social, mobile, information (analytics) and cloud computing.
Social convergence connects people globally on digital platforms such as Facebook, Instagram, and Twitter, Snapchat. These days, you can upload information to all of these platforms at the same time.
Mobile allows connection to a worldwide integrated web of fixed and mobile networks and enables amazing opportunities in emerging economies. A good example is the impact of Mobile Money in Kenya.
Big data analytics has enhanced the ability to analyze a mix of structured, semi-structured and unstructured data in search of valuable business information and insights. Modern marketers daily review information such as social media postings, digital clicking behavior, time spent on various platforms etc to understand customer’s personal preferences.
The Cloud offers a global infrastructure that has enabled the democratization of content creation globally today on platforms such as Airbnb.
As a result of all of these forces, digital platforms enable access to a variety of services, skilled workers, consumers, entrepreneurs, startups, content creators and global brands that were once inaccessible to the everyday person.
Today, there are digital platforms that provide access to on-demand services and build Eco-systems across different industries such as media, hospitality, Information technology, arts, health, you name it.
Analyzing these various platforms show four (4) common elements.
1) The users create content
Social media platforms, such as Twitter and Facebook, have given its users the platform to report live events in their own words. Wikipedia crowd sources content from independent creators and attracts people who consume that information. YouTube, with its disruptive approach to driving the adoption of new consumer behavior, enables its users to create and share video content on an unprecedented scale.
2) The users make up an ecosystem separate from the company
Reddit, an entertainment, social networking and news platform, is known for its diverse and opinionated user community. Its user community showed its strength and influence with the recent protest activities to remove the erstwhile CEO Ellen Pao following the recent firing of one of its popular administrators, Victoria Taylor.
In this situation, the users have a strong ecosystem and they passionately protect their interests by exerting their influence on some of its major decisions.
3) Value is created and captured when users interact as creators and consumers
Macro and micro free lancing platforms such as e-lance, Upwork, Fiverr and Guru daily empower the entrepreneur or side hustler and enable access to on-demand services. On these platforms, users create and exchange value for services as diverse as building mobile applications to writing business plans
Quirky, a reward-based platform, encourages innovative entrepreneurship. Users are incentivized to come up with innovative products which are, if selected, created in scale and retailed at top retail stores.
4) Social curation is a key feature
Content curation describes the use of a combination of moderation, algorithms and social tools for activities such as voting, rating, reporting etc. Voting on YouTube is an example of a social curation tool. Forums like Reddit and Quora use social curation as a professional editorial tool.
Recently, while trying to think up some platform ideas myself, I pondered on how the platform model can be effectively replicated in different industries when I came across this quote by Sanjeet Paul Choudary,
“In any industry, new platform opportunities will emerge every time a function in the value chain can be better performed by an ecosystem of external users”
Basically, that means anytime a service or skill can be provided or open sourced, there lies the opportunity for a platform.
Airbnb has disrupted the hospitality industry by providing a platform for everyday people to lease out room space. Amazon. IPhone App store. EBay. Uber. All of these platforms have disrupted the traditional value chains in their respective industries.
Can this disruption be extended or replicated in other traditional industries like agriculture, engineering, architecture and automobile?
What use cases exist in these industries that can be better served, made more efficient and less costly by the platform architecture? For instance, can a car design be crowd sourced before it is manufactured? Can the supply chain of the agricultural industries be disrupted by leveraging on the power of the platform model?
The health industry, for instance, has seen quite a number of strides in the advancement of the provision of healthcare services and healthcare research. Some health insurance companies are currently employ sensors that are carried by their patients to monitor their stats real time. This has increased the chances of identifying the tell-tale signs of health incidents, preventing them and thereby reducing future insurance claims by healthcare providers. The same sort of data collected from these platforms is also being utilized as input data in medical research which ordinarily would have taken lots of time to gather and even then, not be nearly as accurate.
In Nigeria, we do have some semblance of digital platforms in Dealdey, Nairaland, OLX, Vconnect, Lyf, Hellofood, Checki etc. However some these platforms do not currently fully exploit all the core elements of a platform.
The absence of social curation on OLX is probably the reason why fraudulent transactions occur quite frequently on the site. I personally saw an advert to rent a house which was quite suspicious, however, I couldn’t make a comment on the advert to alert other users to my confirmed suspicions. This is a gap competition should explore.
So, back to the question, will everything become a platform? May be not.
However, I strongly believe that in any industry where consumer behavior can be changed and new markets created through the efficient use of the core elements of a platform, there, a platform can win.
Originally published at tomiebalogun.com on July 20, 2015.