Essentials Of a Platform Business Model

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Essentials of a Platform Business Model
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Contents

• Introduction
• Key Success Factors
• What is a Two Sided Platform
• Multisided Platform Business
• Steps To Launch A Digital Platform

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Introduction

• A digital platform business typically connects
  producers and consumers of products and services.
  The platform enables the users to add value on
  the platform and engage in beneficial
  transactions. The key feature of any platform
  business is its ease of use.
• This enables more and more users to use the
  platform. The three main technologies that are
  driving the development of platforms is social,
  mobile and cloud. The fourth major technology
  that is being seen as important for platforms of
  the future is the Internet of Things.

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Key Success Factors

• Ease of registering and becoming a user
• The benefits(or the attractiveness) of using the
  platform
• Smooth flow of interaction amongst the users.
• Every platform must provide benefits to producers
  and consumers of products and services to use it
  for their advantage
• Amazon provides a host of products at the right
  price point - which attracts buyers. On the other
  hand, it gives the opportunity to sellers to sell
  on its platform.
• The ease with which the users can find products
  is another factor for the success of the
  platform. For the seller, the incentive system
  and the reputation of the platform are really
  important as well.

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What is a Two Sided Platform?

• A two sided platform strategy means that there
  are 2 sides of a market and both the sides
  benefit when the other side increases
  participation. For example, on a single product
  eCommerce platform, if the number of buyers
  increase the number of sellers also increase
  because there is more demand.
• Similarly, if the number of sellers increase the
  number of buyers will also increase because of
  increased variety and lower price of goods and
  services. This sort strategy ensures that the
  platform grows exponentially, if the incentives
  and ease of usage for both the parties is high.

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Multi-Sided Platform Business

• A multi-sided platform business model is
  different from two-sided because here the users
  do not create direct value in terms of cash. For
  example in case of Facebook, although more users
  are benefitting the platform, these users are not
  paying for the service. Facebook is still
  deriving revenue from more users, but through
  advertisers.
• So, the more the number of users, the more number
  of advertisers would want to advertise and more
  the revenue. Other examples of Multi-sided
  platform model include Google and Facebook.

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Steps To Launch A Digital Platform

• Choose a Niche
• One could start with say, a community of
  technology enthusiasts in a particular
  geographical region, like a city. Once the
  business starts to attract loyal users, one can
  move into other niches and expand the services.
• Creating Groups In The Niche
• Identifying the target audience in the niche is
  the next key step. Once the target audience is
  defined, their needs should be understood and
  they should be provided requisite benefits for
  being a part of the community.
• A Unique Selling Point
• The third and most important aspect of building a
  platform is to create a USP for the platform. How
  are benefits better than those of other
  platforms. Suppose, you are launching an
  eCommerce platform for end consumers and buyers,
  then a positioning like The best value for
  money Or the the latest gadgets could help
  attract more users on the platform.
• Cost Management
• Hiring remote teams from an expert player like
  ValueCoders is an essential for developing and
  launching a digital platform business.
  ValueCoders provides Agile teams that provide
  adaptable and faster delivery of Agile software
  projects.

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Get in Touch

• sales_at_valuecoders.com www.valuecoders.com
  
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• www.linkedin.com/valuecoders