Here's a guide to developing the playbook that's right for your business.
Like it or not, your business now plays in a platform world. Seven of the 10 most valuable companies worldwide are powered by platforms.
The list is obviously weighted toward the technology industry (see Figure 1), but platforms are spreading across sectors, fueled by current digital technologies, emerging boundary-shattering technologies (such as blockchain and the "metaverse"), and evolving consumer behavior. Indeed, today's technology platform is tomorrow’s competitor for whatever business you’re in; platforms are changing the basis of competition in arenas from transportation to travel, from finance to music. This phenomenon is forcing every executive to make a choice: create their own platform or figure out how to adapt without owning one in an industry that platforms are disrupting.
Given the success of the companies on this list, it's tempting to believe that "if you build it, they will come," but in reality the field is littered with failures. Some platforms arrived too early or too late to capitalize on a trend. Others didn't have a compelling enough value proposition. Some spread themselves too thin across too many platform applications. Many have struggled to find the right business model. Others didn’t evolve, and they lost relevance.
Some of the early, successful tech-platform companies might say they didn't have a playbook when they were first building their platform, but based on our analysis of platform strategies and our work with clients worldwide, clear patterns and keys to winning have emerged.
We've seen this firsthand, having helped companies succeed by building their own platforms or defending against platform disintermediation. Over several years, we helped a leading Asia-based platform expand into new verticals and scale up its platform and ecosystem model, along the way more than doubling the company's valuation. We supported another leading Asian platform from its early stages of growth through multiple business model and market expansions; its valuation more than tripled during this period to about $40 billion. We've also helped companies mount robust defenses. For example, we helped a European logistics company that faced growing competition from e-commerce platforms invest in technology and new offerings to provide a bulwark against platforms. These investments have contributed to more than 20% growth in annual parcel revenue, a 300-basis-point EBIT (earnings before interest and taxes) margin boost, and an increase of 10 percentage points in the number of "highly satisfied" customers.
Here's our guide to developing and executing the platform strategy framework that's right for your business.