The rise of the platform: a seismic shift in business models

Berend-Jan Hilberts
Article by: Berend-Jan Hilberts
The rise of the platform: a seismic shift in business models

THNK aims for innovation at scale. In our 4-stage Concepting Flow – our process designed to generate breakthrough ideas - we have dedicated an entire stage to Designing for Scale. Scaling is the specific lens which innovation leaders apply when they shape their novel concepts – with the specific aim to make them grow exponentially fast. They look to leverage networks and networks effects, use the power of the crowds and start a movement. As this is a relatively new area of innovation, we are always looking out for kindred spirits who think alike in this new field of Scaling.[/emphasize-text]


Recently we stumbled upon a publication of Sangeet Paul Choudary, (co-authored with Geoffrey Parker, and Marshall Van Alstyne) - a self-described “platform junkie and early internet guy” - and were intrigued by one of his recent blogs: 'The rise of the platform: A seismic shift in business models'. Choudary focuses primarily on the shift in business models brought about by platform approaches. We were excited by some of the similarities in thinking between Sangeet’s key messages for platforms and our THNK Scaling Frames on Emergence. Specifically the points about the power of ecosystems and the crowd, resonate strongly.


After reading 'The rise of the platform', below, please compare it with our THNK article 'Getting Innovation to Scale – Emergence', we posted earlier. Especially for the Scaling tactics “Balancing Control” (what is untouchable on your platform and what is customizable by the user, or ecosystem); “Harnessing the Power of Crowds”, and “Fostering an Ecosystem”.


The rise of the platform: A seismic shift in business models

by Sangeet Paul ChoudaryGeoffrey Parker (@g2parker, Tulane University), and Marshall Van Alstyne (@infoecon, Boston University)


Nokia just sold to Microsoft. Blackberry announced that it is considering putting itself up for sale. Google’s Android, meanwhile, grows stronger and is moving beyond smartphones to power cars, home electronics and wearable accessories. Twitter’s heading for a strong IPO with the world’s strongest platform for influence and dissemination. While Barnes&Noble is parting company with the Nook and struggling to survive, a thriving Amazon and Kindle continue to transform publishing, most recently with the launch of a fan fiction platform. In the hotel industry, AirBnB poses a serious threat to the revenues of established players and is disrupting the housing market.


Platform Disruption


We used to live in a world where commerce flowed linearly. Firms added value to products, shipped them out and sold them to consumers. Producers and consumers held very distinct roles. Value was created upstream and flowed downstream.


Now, market upstarts are displacing market leaders faster than ever before as entire industries transform. We are in the midst of a seismic shift in business models, powered by the Internet and a generation of connected users.


Business leaders, today, develop platforms that connect diverse participants with one another and enable them to interact and transact. On the Internet, anyone can be a producer. Today’s network platforms aid the creation of entirely new markets by connecting producers and consumers with each other.


Three forces are powering the rise of platforms: ubiquitous network access with ever-increasing mobile penetration, reputation systems that enable trust among distributed strangers, and access to low cost shared infrastructure with tools and data to capture and coordinate interactions.


Read the entire article here.



Berend-Jan Hilberts, Challenge Coordinator, THNK


Berend-Jan Hilberts With a background is in business strategy and innovation, Berend Jan has consulted internally and externally with companies on generating new ideas and creating new platforms for growth.


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Header Photo credits: Dan Mason. Retrieved on November 27, 2013. Source: