Sep 5, 2020
(Free) Digital platforms: Who is your customer?
Peter Drucker, the father of management once said, “Answering the question ‘Who is your customer?’ provides the basis for determining what customers value, defining your results, and developing the plan.” This sounds rather simple for direct to consumer industrial businesses but the modern technologies have dramatically changed the landscape of business-to-customer environment.
In the era of “software eats the world”, never seen before businesses have been introduced starting with the App Store launch on January 2011. Since then, we have seen the rise of platforms, ecosystems, and sharing economy businesses that continue to revolutionise how we think about customers.
In the platform world, one-dimensional customer concept is no longer valid. The customer base is multi-dimensional where “partners of the platform” are as equally important as your end consumers. In the case of Xpersity, the knowledge/insight seekers could be considered end consumers but they are not necessarily the only customer. Total participants of the platform, both advice seekers and experts alike, are customers of Xpersity and sometimes this relationship may shift over time.
What does it mean to have a variable customer definition? In the software world where products can quickly grow or pivot, the customer can always change depending on where you are in the development cycle. In Xpersity’s case, the experts are essentially the producers of the platform. They are the most important customer during the ecosystem growth phase. The quality of the experts is non-negotiable and this is where we spend the most time to ensure the on-boarding experience of the experts is frictionless. But we must delicately control this process, as we cannot make it so easy for anyone to join given the other end of the customer spectrum are the advice seekers (consumers).
Xpersity’s multi-dimensional customer base
Such is the case for freelancer platforms like Upwork. The clients range from small businesses to Fortune 500 companies but their registered freelancers make up as many as 3 million people. While paying clients may be more important for Upwork’s revenue stream, without the quality control of the freelancers there would be no paying clients. This need for careful balance makes the operations extremely difficult for Upwork, who recently purged 1.8 million — or 68% of its user count to control the quality and narrow the skills gap.
In summary, as much as knowing your customer is the basis for everything in business, this doesn’t mean your customer definition must be fixed. In the modern business world with unlimited possibilities, the customer is everywhere, multi-dimensional, and variable over time. Sometimes the customers are non-paying — if you consider UBER drivers or AirBnB hosts (they are in fact the most important “customers” of these companies).
Your customer definition has just gotten a lot more complex and it’s time for us to reflect on what customer really means.
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#platform #ecosystem #freelancer #customer
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