Being Platformed

13 March 2018
Cleve Gibbon
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Platform businesses are on the rise.  Spotify, AirBnB, Uber, Netflix and Amazon continue to reap the benefits of “being platformed”. And the next generation of first follower digital leaders are hot on their heels, mobilising their growth agenda around the idea that business scale requires business platforms.

 

However, “being platformed” requires a fundamental shift in mindset from individual benefits to shared success across the business. As we’ll see, a great platform lifts all participants within the digital ecosystem it underpins.  Those companies that have successfully made the shift to being platformed have looked outside first and are now transforming inside.


I’ll be talking at MarTech 2018 in San Jose in April on the importance of "being platformed". My session, ‘Get Platformed or Die Trying’ will explore what I think are the 4 imperatives of becoming a kick ass platformed business.

 

1. Consumer behaviour has changed forever - deal with it!

We have changed as consumers forever. We are hopping into strangers’ cars (Lyft, Sidecar, Uber), welcoming them into our spare rooms (Airbnb), dropping our dogs off at their houses (DogVacay, Rover) and eating food in their dining rooms (Feastly). We are letting them rent our cars (RelayRides, Getaround), our boats (Boatbound), our houses (HomeAway), and our power tools (Zilok).


“We are entrusting complete strangers with our most valuable possessions, our personal experiences - and our very lives” - Jason Tanz (Wired, 2014).


The consumer behaviour bar has been reset. What was once unthinkable is now part of our everyday lives. And if the latest tail wind of digital trends are to be believed, in the next few years, we will be taken to work in driverless cars,  robots will look after our children, we’ll 3D print products in our homes and artificial intelligence will educate us because, in just over ten years, they will be smarter than us.  Not only will they educate us, they’ll operate on us. In China, robots are already performing dental operations to cope with the enormous demand.


What is even more interesting is that consumers are adapting to these changes in different and unforeseen ways.  Alexa seems to be popular with Generation X because they are comfortable with radio as a channel. So Alexa presents a small transformational shift for Generation X because they like to talk. However, for Millennials that talk less and text more, Alexa is proving harder to adopt.

 

The scale of this fundamental change in human behaviour, enabled by technology, is massive. Companies must continually invest to understand and stay ahead of these ever changing consumer behaviours.  You can no longer pay lip service to knowing your consumer.

 

2. Enable producers and democratise value creation

In the traditional business model, companies create products that represent value for the customer. As the producer, the company pushes that value along the pipe for consumption by its customers. It’s simple and effective.  Producers create goods and services for consumers.


Digital has enabled companies to completely disrupt the traditional pipe model.  The rise of platform businesses is largely down to the competitive advantage afforded by creating and supporting multiple producers.  Platform businesses nurture a well-mannered ecosystem of producers and consumers that co-create and exchange value. Instead of doubling down on creating value themselves, owning all intellectual property, and squeezing incremental efficiency gains through the pipe; platform businesses embrace the benefits of network effects within an ecosystem of engaged producers and consumers.


This shift to enabling producers has massive ramifications on the business.  It’s where the successful platform businesses have placed their bets and won big time.

3. Establish what it takes to be a platform business

I’m going to show my age here.  When I was at University, booking a holiday meant a visit to your local travel agency and STA Travel were the go-to.  They were the bricks and mortar middleman you visited to match travellers with hotels.

 

Then booking.com  arrived and became the new digital middleman.  They replaced the human element of the high street travel agency with a digital version. However, the approach was largely the same, just digitised.

 

Now contrast this with Airbnb who have gone all in, placing their bets with platform thinking.  They had a clearer model for what travellers need and responded more proactively to their changing behaviours.  AirBnb embraced multiple producers (hosts) and established an ecosystem that focuses on creating and exchanging value at scale.


“(Platform) business scale is powered by the ability to leverage and orchestrate a global connected ecosystem of producers and consumers toward efficient value creation and exchange.” – Sangeet Paul Choudary.


Take a look at Spotify that has over 70 million paying subscribers. That’s nearly 3 times more than it had a couple years ago.  Growth is rampant at Spotify. Like Airbnb, Spotify has a deep understanding of its artists (producers) and listeners (consumers) shifting behaviours because they are proactively listening to them. Platform businesses continually invest in pulling more producers into the ecosystem and matching them with consumers to co-create value.

 

The first generation of platform businesses led the way, but the second generation are hot on their heels.  So once you’ve established what it takes to be a platform business, how do you go about rolling your own platform?

 

4. Roll your own business platform

Being platformed is more than a technology play. It’s about fundamentally understanding why you exist as a business, how best to serve your customers and - only then - underpinning it with a platform to execute against that agenda.

 

Platforms play a critical role in digital transformation today.  The reality is that the marketing technology landscape has moved past a single platform, beyond a single stack of platforms, and towards the platform ecosystem; a platform of platforms.  Platforms need to be connected to incorporate search, mobile, commerce, content, deep learning, audiences, data, social and the list goes on. The proliferation of these platforms is constantly evolving and vendors are continually rationalising, consolidating and re-packaging their offerings into integrated solution suites.  However, know that this is a necessary evil and something you should welcome, stay ahead of, and embrace the changes.


In order to create your own bespoke business platform, you have to let strategy dictate the technology decisions, not be defined by them. This requires a lot of hard work upfront to:

 

Get your head around the ask.  Who are the producers and consumers in your digital ecosystem and what are the meaningful interactions that are going to create and exchange value?

• Define the future operating model.  How is the enterprise going to organise itself and its agencies, partners and vendors to support the new digital ecosystem?

Establish a business platform to execute.  Map out the platform ecosystem as a set of capabilities to enable the operating model and ensure its adopted by the business.

 

So those are my 4 imperatives, briefly summarised but please, come and hear more. MarTech is a tech conference for marketers and a marketing conference for technologists.  I’ll be walking through concrete examples of what being platformed means in the experience age and share war stories and success criteria for delivering digital transformation, pre-dominantly in the area of an owned media platforms for marketing.


I’ll be speaking at 1.30pm local time on Tuesday 24th April. Hope to see you there!