Starry night

Why a Platform Enabled Business Model over Tradional Business Model?

Every era has brought with it changes and disrupted the way businesses function, defined its roles, broadened horizons and brought sellers and buyers closer.

We have forever lived and interacted with business models that had a straight line of communication. Companies made and sold products through buyers and consumers bought them. Each had a specific role and were complete at their touch points.

Traditional Media and Publishing wasn’t anything different. Media and Publishing houses produced content and it was pushed to the end-users in that similar straight line.

From the time of the industrial revolution, not a lot had changed, until recently. Nokia got sold to Microsoft and Android took over the world, phones, cars, houses, connectivity and everything else.  It created a shift in the way the world worked traditionally, it gave a new shape to business models - the platform business model.

What it did was not to create anything new, it just tweaked the traditional business model and the one straight line. It used the already present resources to create a platform, where the new product was not the product itself but the Platform which became a product.

What is a Platform?

The term “Platform” is one of the most misunderstood ones that we use today. A platform business model does not grow by the virtue of itself but by the sheer presence of its catalytic force - The User. An online platform or offline one is built by a company but is built upon to disrupt the present. The likes of Uber and Amazon are doing just that. They have not run behind a user, they have but created an ecosystem for businesses to connect with their consumers like a traditional market. A traditional market as a platform has sellers with shops and businesses where buyers come to pick and choose. What this did was cut the scope of scalability and growth. Some businesses thrived and a lot more died an eventual death without growth or expansion. What a traditional marketplace did not have was a system for getting heard and voice out an opinion, it was driven more by a seller than by the buyer, here the platform was of no value and had only of little physical importance.

What companies like Amazon did was to bring these core elements to a structure and form and given the system and connected it with the world, equipped it with a functional feedback loop.

What is successful platform business strategy made up of?

Platforms which attract, provide the building blocks and mediums which bring all of these together. Take Kickstarter for say, it attracts investors and entrepreneurs alike and has become an online platform or a medium where they can interact, it is like a matchmaker of sorts. Do you now see how a traditional business model was different?