Finding idle assets to create new opportunitiesgetty
In the past couple of decades, a dynamic shift has swept across industries: multi-sided platform marketplaces. Think of Airbnb, Uber, or Coursera—disruptors that rattled the foundations of longstanding businesses, some with legacies stretching back decades, even centuries. Yet, what truly boggles the mind is the pace of growth of these platforms. From humble beginnings, startups have amassed remarkable market influence in just a few years, and in some instances, mere months. We've all been spellbound by the radiant stories of these digitally-born American companies that were once fledgling startups.
Enter two friends, Daniel Trabucchi and Tommaso Buganza, determined to flip the narrative. They ask the pivotal question: Could platforms be more than just disruptors? What if we drew lessons not to replicate another digital startup, but to cultivate innovative thinking across a spectrum of organizations? This notion is at the core of their book "Platform Thinking – Read the past. Write the future."
What is Platform Thinking?
The authors argue that the digital revolution has brought about a significant technical shift, but a corresponding shift in mindset has not followed. Said in different words, the word “platform” is often (mis)used to refer to anything that is digital service. Notwithstanding, the word “platform”, from an innovation perspective, pushes towards something more precise.
There are various typologies of platforms, from innovation, to transactional or orthogonal, but what they all share is the chance to have multiple customers that enjoy complementary services by a platform provider. Examples? Airbnb has travelers, hosts and experience providers as customers, Google – as the search engine – has end-users and advertisers as customers.
The key point is that these customers are co-creating value together: who would wish to join a platform like Uber if drivers are not there? Well, this is the basic idea behind the power of platforms.
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Examples of Platform Thinking
Two great cases of Platform Thinking by established companies are John Deere and Klöckner. Both companies have long histories in traditional industries. John Deere was founded in the 1837 in the United States, becoming a leading player in agricultural machines. Klöckner was founded in the 1906 in Germany, becoming a dominant player in steel and metal production and distribution. Both of them perfectly represents the idea of “linear value chain” company, having suppliers of raw materials or work-in-progress products, transforming them and selling a value-added product to their customer.
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John Deere created MyJohnDeere, a platform that – putting the farmer at the center – enables a number of value-added services triggered by data gathered through sensors added to their agricultural machines that enable meaningful interactions with other players of the value chain, like seeds or fertilizers producers…which (this is the key) start to be also customers in the platform ecosystem.
Similarly, Klöckner created XOM, as a way to anticipate possible competition or disruption coming from the platform world. XOM is a marketplace where Klöckner sells its products as any other vendor that may want to join. Business customers can manage they purchases in a digital way while getting access to a number of additional services such as financing companies or logistics managers.
Initiating Platform Thinking
Setting up a platform is challenging; many nascent platforms fail quickly. Those who succeed must innovate continuously. Platform Thinkers are “idle-asset hunters”. Successful platforms, like Uber, Facebook or Amazon, showed that their growth is nurtured by the growth of customers (on the various sides) but also by a continuous service expansion that brings new sides or additional services on top of the existing platforms. The easiest example to understand the power of idle-asset hunting is Uber creating Uber Eats, exploiting the value of the riders and drivers that were already on the platform…by welcoming restaurants.
In this way, Platform Thinking becomes a re-framing exercise to foster innovation starting from what a firm has already but is not fully exploiting.
It is far more than just service innovation. It requires a serious mindset shift as companies must abandon the linear value chain paradigm and consider as customers some of the many stakeholders who historically were suppliers, partners, or even competitors.
Platform Thinking is a structured approach, with dedicated tools, to innovation, asking the right questions and encouraging critical thinking. It emphasizes the importance of aligning the innovation process with your organization's principles and values. The authors stress that these tools and processes are meant to guide, not dictate, the innovation journey. The human role behind the process is the real core asset for successful innovation.
Platform Thinking is a call to action for businesses to adapt and evolve in the digital age. It's a roadmap for those ready to embrace change, innovate, and lead in their respective industries. As we navigate the complexities of the digital revolution, this process serves as a compass, guiding us towards a future where platform thinking is not just an option, but a necessity.