Businesses, irrespective of its size, are going digital and that’s the trend that tends to stay and stay for long. Most enterprises are rapidly adopting and integrating digital platforms to bolster overall productivity and deliverable efficiency. The most successful platforms connect two or more types of users—buyers and sellers on a shopping portal, travelers and hotel operators on a booking service and so on so forth. Internet changed the ability to scale such business, turning them more lucrative.
According to a report by MIT; 14 out of top 30 global brands, by market capitalization, were platform-driven companies. Remarkable success of a few of the businesses who integrated digital platforms, both B2B and B2C, has resulted into many more entrepreneurs and business leaders embracing this “holy grail of growth”.
Digital Platforms; the past and present
EBay is believed to be one of the earliest (and successful) cyber platforms, which played a very instrumental role in bringing together several private & commercial retailers and buyers to sell/purchase new & used products. And with this expanding cyber space, platform based companies see the opportunity and feel that they can create new markets which are less expensive to operate. With emerging technologies delivering advanced Enterprise solutions and Mobile/Application development benefits, it seems digital platforms are about to digitize the buyer seller relationship to a great extent.
Several other businesses have followed the footsteps of eBay. Uber is a classic example of the same. The transportation network, mainly successful due to their mobile app, is considered as one of the most successful B2C digital platforms, at present. Uber successfully caters to drivers and riders, alike. Drivers can earn some quick cash using their own cars and riders can enjoy a structured and cost-effective cab-hailing system.
Digital Platforms moving beyond B2C
While focus is always on several B2C platforms like Uber, Airbnb, Lyft, etc., there are plenty of growth opportunities for the B2B enterprises as well. Some old and well-established enterprises are adopting various innovative methods to integrate digital platforms into their business. For example, Akamai, a B2B content delivery network service provider, hosts a platform for web developers and users. Using this platform, they interact, and earn profits by selling their products. Several industry gurus believe that “lot more value can be created within the traditional B2B circuits” by introducing advanced digital platforms.
Integrating Digital Platforms Into your Business – Is it a great idea?
Though, finding the right method to attract appropriate first group of customers is a crucial success factor, leaders considering implementing a digital platform need to understand several aspects of this business model.
- The pricing structure though important – is complex, and must take into account the inclination of the different participants.
- Enterprises must forego profits and not be concerned only about “building a monetization model into the DNA of the platform.”
- One more critical decision that needs to be made is to whether tie customers to a proprietary platform or creating an open network.
- How many sides do you intend to include in a platform. The tendency to perform better changes from business to business. Some businesses may function better as a two-party platform, alike Apple (users and app developers) – whereas some may reap benefits as three- or more-party platforms, as in the case of LinkedIn (job seekers, recruiters and advertisers).
What has been observed of this evolution of digital platforms is that businesses focus mainly on obtaining customers. However; once these customers begin to have less than satisfactory interactions, businesses again start building up the ‘core’ of the platform to secure its reputation and its customers reputation as well. EBay in its early days was a case of caveat emptor, but since then the company has evolved to ensure that user feedback systems are robust and have extensive measures to protect both – buyers and sellers.
Overall, implementing and running a successful platform business requires developing right techniques and technologies to ensure that interactions across the platform are smooth.
As with the case of several business models where it has proved its value, multi-sided cyber platforms will continue to evolve, since businesses are innovating new ways to bring different parties together to share and earn profits. It is up to the leaders to direct these to long-term success.