While you may not have heard of the “Platform Revolution” – it’s probably had an impact on your life in some way. Still why does it matter. I spoke to, world leading expert, Sangeet Choudary to get his thoughts.
Last week, Telstra Labs hosted world-leading platforms expert Sangeet Choudary to speak at an intimate lunchtime event. I got to spend some time one-on-one with Sangeet to dive a little deeper into the emerging modern business model. Here are the top 3 things I learned from him.
Sorry, what is a Platform?
A platform is an (open) system whose architecture allows parties to interact with each other, and is governed to incentivise participants to achieve a certain aim, and reward the desired behaviour. Today, the most famous platforms are well-known disruptors, like Uber and AirBNB. However, Sangeet pointed out platforms aren’t necessarily new – they even existed in the marketplaces of Ancient Greece!
Companies trading in the internet age have seen explosions in connectivity, data and creation of digital identities – which have drawn consumers and businesses closer than ever before. We’re seeing the creation of entirely new markets that have previously not existed. As more and more things are being connected to the internet, these opportunities to create “platforms on top of platforms” are accelerating fast.
What does this mean for Telstra?
The question is not how do we become the “Uber for X”. Instead, we need to look at the opportunities a business like Uber exploited and see how we can both enable and participate in a platform that makes sense for our industry.
Customers already have a continuous relationship with us, so how can we create the best possible ecosystem to serve them? Also, if we use the right kind of data to improve our services and understand our customers better, this is a great example of a traditional business model working in tandem with platforms business model.
What are some of the risks of platform business models?
As platforms grow bigger they start benefiting from a “winner-takes-all” scenario and therefore become inordinately powerful compared with anyone else in the ecosystem. Nobody can argue that Facebook, as the largest social platform in the world, doesn’t influence some world events.
Platforms also encourage risk to be pushed to the participants on the edge of the ecosystem, leaving the power and profits to move to the centre. As more of the world begins coming onto platforms, we should try to reward all participants and lower inequality to avoid this happening. For example, people are already demonstrating how blockchain technology can decentralise the governance of a platform and allow no single entity to control all the profits.