How to spot platform opportunities — Step 3— Ideation
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This blog post continues our series about the Discovery & Design phase of the Platform Innovation Process. It outlines step three as we enter the solution stage, called Ideation, where you build a portfolio of new opportunities. To support this step, the PIK provides two tools: the Platform Opportunity Canvas and Pattern Cards. In the following post you will learn how to use both of these tools and you can also download our Discovery Guide.
From problems to solutions
In step three of the Discovery Phase we now verge into the solutions space, where are focus is on conceptualising solutions, for the identified problems, inefficiencies and trends. With the insights we generated in step one to two, we now have a good enough understanding of the market and ecosystem to start thinking about solutions.
This step is about thinking without limitations — important especially for traditional companies, because they very often limit themselves to focus only on the current value chain they operate in, or on specific assets they own. As mentioned before, the era of platformisation[1] / ecosystemisation requires a shift in user behaviour/ expectations.
The goal of this step is to create a portfolio of platform opportunities which can be prioritised in step four later on.
Five basic patterns of platforms & ecosystems
Practitioners of business model innovation will be familiar with Prof. Oliver Gasmann, author of the Business Model Navigator, in which he describes 55 patterns common to general business models. With his groundbreaking research, he laid the foundations for a better ideation process than ever before. The human brain loves patterns and we always seek patterns to support solution-finding processes. For example: When something has worked before, we assume that it can be applied elsewhere.
So patterns help us to transfer insight/ know-how to other areas, with the aim of reducing your learning curve.
Sangeet Choudary, Geoff Parker, and Marshal van Alstyme describe three major patterns for platforms in their book — Platform Revolution, which help us understand the concept of platforms, with real-life examples.
In our work with the Platform Innovation Kit (PIK) we combine both concepts. The general concept of using patterns, plus the specific patterns discovered by experts in the field.
Based on our own research and experience we went one step further:
- We observe five basic patterns of platforms & ecosystems
- We link them to the discovery phase and value chain analysis to make them easier to apply
- We have created cards which you can use in workshops to support ideation sessions
The five platform & ecosystem patterns
As you can see above, we have five major patterns. We grouped them as either horizontal or vertical applications on the value chain. Using the Ecosystem Exploration Map (step two) you can map out the value chain of a specific ecosystem space. Horizontal patterns are best for inefficiencies plotted on the x-axes. Vertical patterns are better for a vertical integration along the value chain or to connect multiple ecosystem spaces as a broader experience.
I strongly recommend reading the previous post about ecosystem exploration to learn more about the concept.
Here is a brief description of the different patterns:
- Aggregation
- The most common understanding of a platform — a simple marketplace
- The platform aggregates demand side and supply side and allows efficient matchmaking
Examples:
- B2C: Amazon, eBay
- B2B: XOM by Klöckner
2. Reintermediation
- Remove inefficiencies by pulling data from different sources and share insights
- Provide additional insights on top (own services)
- Typical for search engines
- Important: this pattern differs from marketplaces, because they not only provide simple matchmaking, but also generate insights based on the data they gathered.
Examples:
- B2C: Tripadvisor, Swodoo
- B2B: HRS
3. Delink assets from the value
- Another perfect example of the power of platforms where you provide a solution for inefficiencies in the value chain
- Identify free capacity and share it with others
- The overcapacity is then delinked from the resource itself (e.g. machinery)
- Leads to higher utilisation
Examples:
- B2C: UBER, AirBnB
- B2B: Amazon AWS
4. Bundle Experience
- Combine & bundle different products / services into one broader end-to-end experience
- Goal: Remove the need for multi-homing
- Classic strategy to build broader ecosystems around your platform
Examples:
- B2C: Nest
- B2B: Mobility as a Service, Salesforce
5. Peer-to-Peer
- This refers to a major trend of decentralised platforms / ecosystems
- Facilitate peer-to-peer exchange & communication
- Remove industry barriers
- Provide additional services on top for the consumers
Examples:
- B2C: Naspers
- B2B: Data Intelligence Hub
I’m sure there are more patterns, but these are the basic patterns we experienced as the most relevant. You also see that there is a kind of overlap between the patterns, so it is always helpful to focus on the core principles behind the pattern.
Important: Use the pattern as inspiration, not as the definitive solution and apply the concept behind it, but always adapt and adjust it to the specific needs of the market. Maybe one day your platform will define a new standard pattern ☺
How to run an ideation session
Ideation and finding new solutions always requires an iterative process with major iterations to validate assumptions, and micro iterations inside single workshop sessions, to get into the mood of ideation.
That’s why we organise workshops with at least 3 micro-iterations of ideation to build a broader portfolio of business models — goal is to have 20–30 ideas on the table. One iteration takes about 45–60 minutes.
In the first iteration, the participants will have 15 minutes to describe one idea they have in mind using the Platform Idea Canvas. The canvas is easy to use, because it focuses on the core components of a business model, which are as follows:
- Who are the stakeholders and what are their biggest needs/problems
- What is the core value proposition of the platform
- How do you earn money and how big is the market
- What are your major contributions/value adding services
After the 15 minutes are up, participants have to present their idea to the audience. This creates a shared understanding among the participants, in how the other team were thinking. The ideas/opportunity canvases will then be hung on the wall.
In the next iteration, the participants will be tasked with writing down an opportunity. Here you can support them with the pattern cards or other restrictions for example, by stating that the platform is free of charge for the consumers or producers.
At the end of this iteration, you will have a wall full of ideas/opportunities and you can begin to cluster them.
The value
- You identify multiple opportunities
- Aligned thinking among the participants
- You create an atmosphere where everybody feels that he can contribute and influence the direction
In the next step you will then prioritise and select the most promising ideas. How this is done I will explain in my next blog post.
Summary
In brief, throughout step three of the discovery process, you will focus on identifying platform opportunities by using patterns and the PIK Pattern Cards to speed up the process and help participants understand how platform can reshape the value chain/ecosystems. The Platform Opportunit[1] y Canvas will help you to draft ideas quickly and build a portfolio of opportunities, within two to three hours of micro iterations.
Acknowledgement: Thanks to Sangeet Choudary, Geoff Parker and Marshal van Alstyme who laid out the foundation for the patterns in their book “Platform Revolution”. We applied them in our client workshops and learned about how participants understood the concept and we discovered two more patterns. Thanks also to Oliver Gassman of University of St. Gallen, who originally came up with business model patterns in his book: Business Model Navigator, in which he describes 55 patterns of general business models. Here we also learned about the magic triangle to describe in a crisp and short way — business models. The Platform Opportunity Canvas is based on some of the principles of the magic triangle.
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Want to start your own discovery process? We from FACTOR10 offer support for single workshops and a full evaluation process to identify and select platform opportunities.
