Beyond uber how platforms rule the world

Matthias Walter

T-Systems MMS

The platform innovation company

What are platform business models and why they are so successful

How to build and grow a platform business

See some examples beside the well-known

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Reelection as Partner

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Digital Disruption?

Source: http://www.spiegel.de/fotostrecke/taxifahrer-proteste-gegen-uber-in-frankreich-fotos-fotostrecke-127851.html

Digital Disruption!

Source: http://www.spiegel.de/fotostrecke/taxifahrer-proteste-gegen-uber-in-frankreich-fotos-fotostrecke-127851.html

uber drivers > yellow cabs in nYC

Only 4 Years

Marc Andreessen

Why Software Is Eating The World By MARC ANDREESEN

August 20, 2011

This week, Hewlett-Packard (where I am on the board) announced that it is exploring

jettisoning its struggling PC business in favor of investing more heavily in software, where it

sees better potential for growth. Meanwhile Google plans to buy up the cellphone handset

maker Motorola Mobility. Both moves surprised the tech world. But both moves are also in

line with a trend I‘ve observed one that make me optimistic about the future groth of the

American and world economies, despite the recent turmoil in the stock market.

In short, software is eating the world.

More than 10 years after the peak of the 1990d

Twitter are ntro in Silicon

But …

„Software alone is a commodity. There is nothing stopping anyone from copying the feature set,

making it better, cheaper and faster.“

- FRED WILSON, FOUNDER OF USV -

What about those?

Market capitalization 1995 -> 2015

SOURCE: Mary Meekers „Internet Trends Report2015“

x 150

What is the business model?

Platforms rule the internet

SOURCE: Mary Meekers „Internet Trends Report2015“

13 of 15 = platform business

models

What is a platform business model?

Platform (n):

A multi-sides business model focused on creating value by facilitating transactions between two or more interdependent groups (usually consumers and producers).

SOURCE: Peter C. Evans

connects many peers

Producers

Consumers

PLATFORM

(multi-sided market)

Partners

Platform Owner

Linear Business

Sells a product or service to a

consumer

Owns one side of the transaction

Products have inherent value

„I derive value from my use of a product“

Platform Business

Facilitates a transaction between

multiple parties

Owns infrastructure that facilitates the transaction

Platforms add network value

„I derive value from other peoples use of the platform“

example

vs.

Other uses of the term „Platform“

Computing Platforms Product Family Platforms

Industry Platforms Platform as a Service

Platform becomes the new standard

Platform examples

Exchange Platforms

Maker Platforms

Services

Product

Payments

Investment

Social Networking

Communication

Closed Development

Controlled Development

Open Development

Content

Platforms today (2015)

number market capitalization employees

SOURCE: Global Platform Survey, The Center for Global Enterprise, 2015

Platform types

SOURCE: Global Platform Survey, The Center for Global Enterprise, 2015

Platform companies by type (2015)

Platform companies by type & region (2015)

Platforms by enterprise type (2015)

SOURCE: Global Platform Survey, The Center for Global Enterprise, 2015

Platform businesses in the S&P 500

1975 1980 1985 1990 1995 2000 2005 2010 2015 2020

05

10

15

20

25

30

What are the factors that drive platform scale?

Key platform scale drivers

Network Effect powered by positive feedback

Minimal costs of production / distribution

Behavior design & community culture

Learning Filters

Virality (not recommendations)

Show me the money! (How can I build my own platform business?)

A lean (startup) approach

Ideate 1

2

3

4

Prototype Business Model

Build & Launch

Product-Market Fit

5

Scale

1

Generate a portfolio of ideas & select the most promising one

Build a team

Analyse technology trends

Be creative

Create Business model visions

Score visions & decide

Platform Business Visions

Platform Portfolio Matrix

Ideate

Pick your Role wisely

Partner -> contribute

Owner -> build & manage

Desktop for products

SOURCE: Mary Meekers „Internet Trends Report2015“

Mobile for services

SOURCE: Mary Meekers „Internet Trends Report2015“

On-demand platforms enabled by mobile + sensors + humans

SOURCE: Mary Meekers „Internet Trends Report2015“

Identifying Platform opportunities

Reduce high transaction costs or remove gatekeepers

Underserved groups that need each other

Potential complements

Latent supply

Large, fragmented supply

Platform portfolio matrix

Consumer Growth Rate

Re

ve

nu

e p

er

Pr

od

uc

er

Stars

Unknowns

2

Define the platform business model & collect early feedback

Define platform business model

Understand critical elements & success factors

Define and understand target user experience

Build partner relations

Get feedback

Platform Business Model Canvas

Digital Innovation Model

Customer Journey Map

Prototype business

model

Platform business model canvas

Owner

Consumer

Producer

Partner

Value Propositions

Value Transactions

Key Platform Components

3

Create and Launch a Minimum Viable Platform (MVP)

Understand Stakeholder Journeys

Agile development to speed up prototyping and MVP building

Define launch strategy considering key strategy components

Customer Journey Map

Digital Innovation Model

Design Sprints

Strategy Components

Build & launch

Key platform components

Audience Building

Tools & Services

Rules & Standards

Match Making

Chicken-and-egg solving strategies

1. Enter with significant pre-invest (e.g. XBOX)

2. Build a cooperative strategy (e.g. Android)

3. Act as producer (e.g. iPhone)

4. Use an evolution strategy (e.g. AirBnB)

5. Subsidize high-value users (e.g. UBER)

6. Target a user group to fill both sides (e.g. Etsy)

7. Provide single user utility (e.g. early Instagram)

4

Validate with real market feedback & decide

Perform Customer Interviews

Analyze acceptance and opportunities for growth and improvement

Review decision criteria, business plan and decide (pivoting)

Customer interview

Data analytics

Business plan

validate

5

Scale

Define & Plan Growth Options

Market

Features

Pivoting

Execution

Platform Business Model

Roll-Out Plan

scale

Mistakes to avoid

Don‘t try to be good at everything

Don‘t screw up pricing

Don‘t think: If we build it, they will come

Sounds good, but show me some examples?

Example: Smart City Platform Deutsche Telekom

smartcity platform Deutsche telekom

Producers Consumers

Partner Owner

Example: Hmm Deutschland gmbh E-health platform for barmer gek

One platform for all

End-to-end medical aid management

End-to-end medical aid management

Opticians and hearing aid specialists

154,000 doctors

21,000 pharmacies

Process takes just a few hours

Reduced transaction costs

Prozess komplett digitalisiert

10,000 medical aid stores

Medical aids delivered in hours

E-health platform Hmm deutschland gmbh

Producers Consumers

Partner Owner

21,000 pharmacies

Opticians and hearing aid specialists

154,000 doctors

10,000 medical aid stores

Example: MMS as a platform partner

Producers Consumers

T-Systems MMS

Owner

Example: T-Systems as a platform enabler

Producers Consumers

T-Systems Owner

Let‘s rule the world!

Start your own platform business!

Owner

Consumer

Producer

Partner

Free to use / download at

www.creatlr.com

One more thing

Recommended sources

Amrit Tiwana (2013)

Phil Simon (2011)

David S. Evans (2011)

David S. Evans Andrei Hagiu R. Schmalensee (2011)

S. P. Chaudary (2015)

Platform Business Model Canvas @ creatlr.com

Matthias Walter (2015)

Matthias Walter

Portfolio manager & Platform Business Innovator

Riesaer Straße 5 D-01129 Dresden, Germany

Tel.: +49 151 62433705 E-Mail: matthias.walter@t-systems.com Internet: www.t-systems-mms.com

Twitter: @digitalahead Blog: www.digital-ahead.de

Thank you!

backup

The value ecosystem

Producers Consumers

Partners Owner

Platform