Platforms & More…

It has been time since I shared any thoughts. Have been irregular for sames reasons always .. caught in web of work and finding time for everything ! I tend to forget always that “yes I can do anything but I cannot do everything !” . Enough of self-infliction , will try to get back into groove and be honest to myself to do things which I like doing !

I am an avid read of Founding Fuel(who have the vision of creating  playbook of entrepreneurship through multi-channel knowledge sharing using their esteemed network of thought leaders) . While reading one of their articles from last week , I found it interesting enough for sharing it as blog post with some personal retrospection on it.

Read On…

Roughly last week on Founding Fuel an article was published about how much control is too much control for a platform. This article talks about some interesting history in early 1930s of how one the Bell Lab engineers Clarence Hickman developed a working model of answering machine but the underlying technology around magnetic storage and the research around it was shutdown by Bell Labs due to reasons related to people’s perception in relation to its usage and ramifications thereof on Bell Labs future ( Remember that Bell Labs remains most prolific entity in world that would have produced most Nobel laureates outside university / academia infrastructure as private company !) ( refer Tim Wu On the Master Switch )

Another powerful example is related to guiding principles of TCP/IP by Vint Cerf and Robert Kahn aimed at interconnecting computers. It had no central control and does not offer any specific optimization for an application. an extreme end of platform design

Above and many other examples mentioned in the article relate to following facts:

  • Businesses heavily control platform strategy
  • Controls are often misguided with too much or / less making a platform subservient to stakeholders or / negative usage
  • Enterprises struggle with definition of platform success
  • Enterprises struggle to see if the platform is balancing act for every stakeholder
  • & Platform itself does not know when it has failed on above parameters!

Now-a-days technology has made it possible to create a platform vision as a foundation to any business idea , but its economic model definition remains conflicting and suited to business itself on how it sees or visualizes the same but it is important to keep referring to core definitions of a platform business.

A platform is a business model that

  • Creates value by facilitating exchanges between interdependent groups. To make these exchanges happen, platforms harness and create scalable networks or users and resources.
  • Platform business needs to facilitate transactions and boost efficiency from the perspective of supply, demand or supply-demand relation.
  • A platform business, should ensure that transactions are carried out efficiently and profitably.

For a platform business, the essence is to ensure that transactions are carried out efficiently and profitably.  The key, undoubtedly, lies in whether a platform can deliver increased transaction efficiency from the perspective of supply, demand or supply-demand relation?

If a business can manage that, it will be able to rise above the fierce competition , ensure effective guardrails with inversion of control , and eventually grow bigger. When it grows bigger in terms of economic value than the creators itself , it starts to become a platform .

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