Platforms Are Not Created Equal: Harnessing the Full Potential of Platforms

HagelHere is a brief excerpt from an article by John Hagel for LinkedIn Pulse. To read the complete article and check out others, please click here.

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Platforms are becoming increasingly central to business value creation. Yet, not all platforms are created equal – some platforms have far more potential to trigger powerful forms of increasing returns that will ultimately marginalize other forms of platforms. In a rapidly evolving environment, it’s important to understand not just the structure, but the dynamics, of different kinds of platforms. I recently had an opportunity to step back and reflect on this issue as I prepared for a speaking engagement.

I had the good fortune of being invited to speak at the Platform Strategy Summit held at the MIT Media Lab a couple of weeks ago. This Summit was organized by Geoffrey Parker, Marshall Van Alstyne and Sangeet Choudary – three guys who have spent a lot of time studying and working with platform-based businesses. There were great speakers and, perhaps equally important, the audience included a lot of people who have been building platform-based businesses.

What is a platform?

So, what did I learn? Well, first of all, that platforms, at least as the organizers think of them, cover a broad range of institutional arrangements. It was clear that they didn’t simply view platforms as technology platforms. In fact, the definition they offer of business platforms is: “a nexus of rules and infrastructure that facilitate interactions among network users” or, alternatively, “a published standard, together with a governance model, that facilitates third party participation.”

Just to get the semantics aside, I tend to prefer the term “performance ecosystems” to describe this space rather than platforms simply because, to me, the term “platforms” creates an image of a much more tightly designed and specified environment than the term “performance ecosystems.” For the purpose of this posting, though, I’ll defer to my hosts and use the term “platform” since it’s clear from their definition that they are talking about roughly the same domains.

So, are all platforms created equal? I argued in my talk that they are not. To make my case, I distinguished four different categories of platforms that are becoming increasingly prominent in the business world (and elsewhere).

[John then discusses each before posing questions to be addressed.]

Four questions become central to harnessing the power of accelerating learning on platforms:

o What is the primary design objective of the platform today – aggregation, social, mobilization or learning?
o Where are there opportunities to accelerate learning (especially through new knowledge creation) among participants today?
o What features or design principles could we deploy to help tap into those learning opportunities today?
o What are the metrics that we could track to determine the rate of learning and how can we monitor those metrics on an ongoing basis to refine our initiatives and accelerate learning even more among participants?

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Here’s a direct link to the complete article.

John Hagel, director of Deloitte Consulting LLP, has nearly 30 years of experience as a management consultant, author, speaker and entrepreneur. John has helped companies improve their performance by effectively applying information technology to reshape business strategies.

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