Entrepreneurship Seminar

platform growth

• increase in the number of users

• increase in the overall value generated on the platform at surging costs

platform scaling

• ability to accommodate growth

• ability to add revenues without equalling increasing costs

• combination of network effects needed to transition from growth to scaling

platform scaling strategy: marquee

attract prestigious brand to signal quality

platform scaling strategy: seeding

seed the platform with owner-generated content

platform scaling strategy:

platform scaling strategy: piggybacking

launch on top of an existing platform

platform scaling strategy: follow-the-rabbit

create a non-platform offering to demonstrate success

platform scaling strategy: micromarket

go narrow/deep in a thick market (from niche to globe)

platform scaling strategy: big bang

simultaneous on boarding of all sides through marketing

platform scaling strategy: producer evangelism

users help spread the word

platform scaling strategy: single-side

create a useful product for one side of the market

scaling an ecosystem

1. structuring platform portfolio

   • initiate network effect to achieve a critial mass

2. developing resources pool

   • broaden network scope to create opportunities for more novel resources reconfiguration or more data

3. sustaining ecosystem growth

   • build a self-organized ecosystem to continue scaling

scale slow/fast matrix

high complexity, low regulatory risk: scale fast

high complexity, high regulatory risk: scale slow

low complexity, low regulatory risk: scale fast

low complexity, high regulatory risk: scale fast

priorities fast scaling

• rapid user growth

• network effects

• market capture

priorities slow scaling

• control

• quality

• trust

• institutional alignment

three mechanisms of active scaling

• data driven operation

• instant release

• swift transformation

definition platform

• interdependence of a stable core with a dynamic heterogeneous set of complementary components

• success depends on

  • cooperation, coordination and integration…

  • across a diverse and large array of organizational units…

  • facing conflicting incentives or direct rivals

platform governance

• set of overarching rules, constraints and inducements

• developed and utilized to address market frictions

• crucial to value creation and appropriation

platform governance: stability-evolvability equilibrium

management of the dimensions:

1. output: standard vs. variety

2. actors: control vs. autonomy

3. identification: individual vs. collective

incentive mechanisms

1. sharing of resources

2. provision of information

3. conferring autonomy

4. giving rewards

control mechanisms

1. access control

2. output control

3. behavioural control

4. control of external relationships

definition digital business model

• changes in digital technologies trigger fundamental changes in the way the business is carried out and revenues are generated

  • rely on digital platforms to balance benefits among an ecosystem (multiple organization and individuals involved)

definition business model

• business logic of a firm; how it creates, delivers and captures value

• system of interdependent activities, performed by a local firm and its partners and the mechanisms that link these activities

• created by entrepreneurial leaders

  • they shape and design organizational activities and transactions, weaving activities together into a system

key dimensions of a business model

• content: what activities the business model is composed of

• structure: how these activities are linked in the business model

• governance: who performs the activities that are enabled by the business model

• value logic: why does the businnes model create value and why does it enhance value appropriation

overarching question: what customer needs will the business model address?

business model content ‘from product to service’

product + IoT tech → product as a service

goals

• infuse the product with data and sell the data

• help clients lower risk by charging only for actual use instead of requiring them to buy expensive, complex equipment that may sit unused during slow periods or need frequent repairs

IoT Tech

IoT = internet of things

vast network of physical objects embedded with sensors, software, and connectivity that allow them to collect and exchange data over the internet

platform revenue models

direct monetarization

• transaction-based

• access-based

• product-based

indirect monetarization

• advertisement

• pay for visibility

• data monetarization

behavioural surplus (Google example)

• users generate data while using digital services

• data is collected and analysed

• data is partly used to improve services, excessive data becomes behavioural surplus

• surplus is used to predict future behaviour/create prediction products

• predictions are sold to advertisers/business

• goal: maximize profit through prediction and influence of user behaviour

from pipeline to platform business

producers create offerings to deliver to the market ⟳ data to inform future offerings ⟳ platform operator ⟳ data to improve current offerings ⟳ consumers recieve offerings

platform businesses facilitate the exchange of information, services or goods and rewire the value chain

types of network effects

• direct network effects: same-side effects

• indirect network effects: cross-side effects

• both can be positive or negative

• network effects can lead to ‘winner takes it all’ markets

types fo platforms

• transaction

• innovation

• investment

• integrated

types fo platforms transaction

• connects buyer and sellers to enable exchanges (“matchmakers”

• e.g. Amazon, Uber, Airbnb

types fo platforms innovation

• lets external developers/creators build on a platform

• consists of technological building blocks that are used as a foundation on top of which innovators can develop complementary services

• e.g. App Store, Android, Microsoft

types fo platforms integrated

• combines several network types into one ecosystem

• e.g. Google, Amazon, Alibaba