Pipes are business models that enable the linear flow of value from a producer to a consumer. Platforms do not perform the production role; they enable interactions between connected producers and consumers. In a world of networks and machine intelligence, we are seeing a shift in business models from pipes to platforms. Unlike pipes, platforms rely on external ecosystems for value creation and scale by enabling interactions among ecosystem participants. This video lays out the core elements constituting this shift.
The platform business model enables interactions between producers and consumers of value. It achieves this goal through two mechanisms. First, a platform provides a plug-and-play infrastructure which encourages open participation by an external ecosystem of producers and consumers. Second, it lays out the rules of governance for the interactions that ensue. The platform stack is a tool to help understand the various architectural elements constituting a platform business model and to identify the unique factors that determine success for each platform. This slide deck lays out a narrative for understanding recent competition among digital players using the platform stack.
The platform manifesto is a collection of principles that succinctly defines how different aspects of business transform in a world of platforms. It identifies 16 shifts, across different business functions, that come into play in a world of platforms.
As digitization and connectivity increase, platform business models are transforming multiple industries. This presents unique opportunities for startups and requires incumbents to transform themselves from pipes to platforms. The nature of disruption and transformation in different industries is determine by the impact of digitisation, the level of regulation, and the costs of market failure. This video discusses patterns in platform-enabled disruption seen across multiple industries today.