How to Build a Successful Platform Business

Did you know that in late 2018, the total market value attributed to platform economics was estimated at $7 trillion? And that is projected to expand to nearly one-third of all global commerce by 2025?

In his podcast series The Change Officer, CreITive's CEO MENA Vuk Zlatarov talked with Asma Shabab, Digital Business & Innovation Strategy Consultant at IBM on why platform businesses are the future and what does it take to build a successful platform.

Asma works at the intersection of strategy, customer experience, and technology to help companies become players in an AI-powered economy.

Platform is a business model that facilitates the exchange of values between two and more end-users or stakeholders.

Pursuing a platform strategy is a big investment, especially for big companies. They need to completely transform their business model, not to mention what cultural impact and change impact it has. So the important question is - Should you join forces with some of these platforms, start on your own, or completely drop the idea?

To be a successful platform company, it is essential to realize what is the value that you want to create.

If we look at Apple Pay, it was based on very small friction that Steve Jobs wanted to remove - in their keynote, it was a woman just looking for a card, scrambling through the bag and wasting time trying to find where her credit card is. Apple just wanted to remove that friction.

So here's where to start: ask yourself what is that friction you want to address?

Answering this question requires a bit of digging.

"Go to your end-users and figure out what exactly is the friction in their lives. And this is something that startups do really well. Small startups are built on this: let’s figure out how to make art, for example, more accessible to people. I think that the core is just really going to your end customers and have a conversation on what’s keeping them up at night." - Asma Shabab

What it takes to build a successful platform

There are a lot of considerations companies need to make, but it’s never an on-and-off decision. In the end, do you see a way that you’re evolving? Do you see your value elements evolving? Do you have the appetite and flexibility that as you develop your platform, you might not be focused on the specific industry that you’re working in?

Essentially, this is what you need to have:

• investment
• appetite for growth
• good data and AI engine in place
• network effect.

When it comes to enhancing your services or identifying the value elements, the whole conversation is going to be based on data. You need to constantly be in check with what your customers are doing to be able to identify growth and opportunities.

Most of the currently leading global platforms are growing based on the network effect. Is it something that can be orchestrated - or just something that happens, find out in the episode No. 52 of The Change Officer.