Research & InnovationAPI & Platform

Business Strategy & Digital TransformationNew Usages, Connected Business & Mobility

Inttoduction to Platform

Fabrique des Mobilités

William El Kaim – June 2015

What is a Business Ecosystem?

• Definition

• Business ecosystems are dynamic and co-evolving communities of diverse actors who

create new value through increasingly productive and sophisticated models of both

collaboration and competition.

• As James Moore said in 1993

• Innovative businesses can’t evolve in a vacuum. They must attract resources of all sorts,

drawing in capital, partners, suppliers, and customers to create cooperative networks.

• Ecosystems enable and encourage the participation of a diverse range of

(large and small) organizations, and often individuals, who together can

create, scale, and serve markets beyond the capabilities of any single

organization.

• Participating actors interact and co-create

2Source: Deloitte Univ. PressCopyright © William El Kaim 2015

Platform Definition

• A “platform” is a powerful type of ecosystem,

typically created and owned by a single

business or entity, but deliberately designed

to attract the active participation of large

numbers of other actors.

• Source: Deloitte Univ. Press

• A “platform”, by definition, is at least two-

sided.

• Most Platforms start as product (one-sided), then

adds a second side (developers, merchants,

crowdsourcing, etc.) when the product gets

traction.

• The two sides of the platform should be able to

interact through it (but not outside it in general).

3Copyright © William El Kaim 2015

TRUST …

• The Platform’s paradox is that its

hyper centralization and proprietary

nature make it possible to form a

wide network of trusted

decentralized trust relationships

between actors in context, in ways

that the Web never did and never

will do, enabling new multi-party

business models.

• If you remove the Platform you

force every actor to establish

many-to-many trust relationships

with all of the other actors.

4Source: B=MC2Copyright © William El Kaim 2015

Platform Taxonomy

5Source: Deloitte Univ. PressCopyright © William El Kaim 2015

Platform vs. Product

• Products have features, platforms have communities.

• Platform innovations are manly emergent, instead of product innovation

which is mainly planned.

• Platforms Ownership and Intellectual property are segmented, while

products in general are controlled by one firm

• Platforms are based on revenue stream, while products are generally based

on lump-sum sales.

• Platform, unlike products, should attract at least two distinct group of

participants, not product.

6Source: Amrit TiwanaCopyright © William El Kaim 2015

Nine Guiding Principles in Platform Markets

• Red Queen effect: The increased pressure to adapt faster just to survive is driven by an increase in the evolutionary pace of rival technology.

• Ckicken-or-egg problem: the dilemma that neither side will find a two-sided technology solution with potential network effects attractive enough to join without a large presence in the other side.

• The penguin problem: when potential adopters of a platform with potentially strong network effects stall in adopting it because they are unsure whether others will adopt it as well.

• Emergence: Properties of a platform that arise spontaneously as its participants pursue their own interests based on their own expertise but adapt to what other ecosystem participants are doing.

• Seesaw Problem: the challenge of managing the delicate balance between app developers’ autonomy to freely innovate and ensuring that apps seamlessly interoperate with the platform.

7Source: Amrit TiwanaCopyright © William El Kaim 2015

Nine Guiding Principles in Platform Markets

• Humpty Dumpty problem: when separating an app from the platform makes

it difficult to subsequently reintegrate it.

• Mirroring principle: The organizational structure of a platform’s ecosystem

must mirror its architecture.

• Co-evolution: Simultaneously adjusting architecture and governance of a

platform or an app to maintain alignment between them.

• Goldilocks rule: Humans gravitate towards the middle over the two extreme

choices given any three ordered choices.

8Source: Amrit TiwanaCopyright © William El Kaim 2015

The New Digital Operating Model

• Establishing a platform in the

center of a robust digital

ecosystem requires then a new

digital operating model, one that

is appropriately permeable to

third parties that can co-create

new value from what a

company and others have to

offer.

• The Shift: From a platform the

company builds upon to a

platform the world builds upon!

9Source: Aaron Dignan Medium blog PostCopyright © William El Kaim 2015

Platform Strategy: Design Canvas

10Copyright © William El Kaim 2015

Recommended Books

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12Copyright © William El Kaim 2015