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Platform Development

Had the internet not come up, we would never have seen the emergence of platform business models. Unlike pipes, platforms do not just create and push stuff out. They allow users to create and consume value. At the technology layer, external developers can extend platform functionality using APIs. At the business layer, users (producers) can create value on the platform for other users (consumers) to consume. This is a massive shift from any form of business we have ever known in our industrial hangover.TV Channels work on a Pipe model but YouTube works on a Platform model. Encyclopaedia Britannica worked on a Pipe model but Wikipedia has flipped it and built value on a Platform model. Our classrooms still work on a Pipe model but projects like eduBuntu is turning on the Platform model for education.

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Platforms face two key challenges:

1. Solving the chicken and egg problem of getting both content producers and consumers on board;

2. Ensuring that producers keep producing, and create value. 

Without solving these two challenges, driving site traffic or app downloads will not help with user acquisition. A platform requires us to build with both producers and consumers in mind. It requires us to build tools for producers (e.g. video hosting on Popcorn-Cloud) as well as for consumers (e.g. video viewing, voting etc.). Keeping two separate lenses helps us build out the right features. 

Monetizing your Platform

On a platform business, monetization isn’t quite as straightforward. When producers and consumers transact (e.g. AirBnB, SitterCity, Etsy), one or both sides pays the platform a transaction cut. When producers create content to engage consumers (YouTube), the platform may monetize consumer attention (through advertising). In some cases, platforms may license API usage.
Platform economics isn’t quite as straightforward either. At least one side is usually subsidized to participate on the platform. Producers may even be incentivized to participate. For pipes, a simple formula helps understand monetization:
Customer Acquisition Cost (CAC) < Life TIme Value (LTV)
This formula works extremely well for ecommerce shops or subscription plays. On platforms, more of a systems view is needed to balance out subsidies and prices, and determine the traction needed on either side for the business model to work.

Traditional Pipe Thinking:
We charge consumers for value we create.

Platform Thinking:
We’ve got to figure who creates value and who we charge for that.

Futureproofing your business


In the future ALL businesses will be Platform Businesses

Without the advent of the internet, the world would still be dominated by pipe-businesses. The internet, being a participatory network, is a platform itself and allows any business, building on top of it, to leverage these platform properties.  Every business on the internet has some Platform properties. E-commerce stores and single-user SAAS work on pipe models. However, by virtue of the fact that they are internet-enabled, even they have elements that make them platform-like. Blogs allow comments and discussions.

Readers co-create value.

The main interaction involves the blogger pushing content to the reader, but secondary interactions (like comments) lend a blog some of the characteristics of platforms. E-commerce sites have reviews created by users, again an ‘intelligent’ platform model.

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So, in the future, every company will be a tech company. We already see this change around us as companies move to restructure their business models in a way that uses data to create value.  We are moving from linear to networked business models, from dumb pipes to intelligent platforms. All businesses will need to move to this new model at some point, or risk being disrupted by platforms that do. 

Adaptability and Scalability

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Investing in proper UI Development

In order to create loyal fans and clients, make sales, build a mailing list, or achieve any other (type of conversions), the user has to enjoy the process of navigating your platform. The ultimate user experience (UX) strikes a balance between four important elements: design, technology, user needs and business goals. Aligning and integrating these elements leads to optimum goal conversions.  Conversion optimization (also known as “testing”) is a data-driven process leveraging digital analytics, persuasion architecture, and user feedback. By enhancing the overall usability and performance of your website you can develop a platform that will:

Draw Users

Better understanding your users’ needs will help you to create value for, and derive value from, your user.

User Experience

As an extended function of proper UI design your platform can create a highly targeted and personalised user experience.

Increased Conversions

You can essentially steer user decisions to reach key performance indicators, directly translating into sustained growth.

Contact us

Phone: +27 (0) 81 768 9292  
Fax:+27 (0) 86 416 1054 

Postal Address

P.O. Box 38053,
Garsfontein East,
Pretoria, 0060
South Africa