The Future of Digital Platforms Drive New Economies
Digital platforms have democratized the content creation as well as access to a range of new business models. In fact, these platforms have enabled decentralized nodes to reflect market dynamics in the establishment of services, experiences, and delivery standards. How will new economies arise from these emerging platforms and the platforms that have yet to be created? (see Figure 1):
Figure 1. A New Platform For The Digital Economy
- Jonathan Zittrain, Professor of Law and Professor of Computer Science of Harvard University
- Nathan Blecharczyk, Co-founder and CTO of Airbnb, Inc.
- Pierre Nanterme, Chairman and CEO of Accenture
- Chuck Robbins, CEO of Cisco
- Arun Sundararajan, Professor of Business, Rosen Faculty Fellow of New York University
- Susan Wojcicki, CEO of YouTube, Inc.
Key takeaways from the panel include:
- Platforms enable democratization of digital access and content creation. The growth of common technology platforms have emerge to facilitate the value exchange of content through networks among individuals and machines.
- Network effect drives platform adoption. Nathan Blecharczyk shared how the new P2P models create a viral adoption and network effect by driving demand and fulfilling supply. The platform enables any individual to use the services to deliver a room night.
- Community engagement powered by trust and authenticity. Trust and authenticity by each platform member play a key role in ensuring fidelity of the network.
- No longer B2B nor B2C, but P2P. A blurring of business and consumer roles is inevitable. Understanding context by role will be key to personalization of digital services
- Market will set standards instead of regulators. Platforms will adopt to member needs and requirements. Unowned platforms such as the internet and the block chain will also play in the same market as member driven platforms such as SWIFT to owned platforms by governments and corporations. However, the evolution of these platforms must come from the market and its members to succeed.
The Bottom Line: Digital Platforms Drive Democratization Of Digital And Provide Significant Opportunities For Individuals And Organizations
New model of organizing economic activity. Somewhere between a firm and an individual. The new winners of the digital era have built business models that aggregate components of network economies. The three distinct components of the network economy include:
- Content (value): whether a product, service, experience, outcome, or business model, the content is the value. How that content’s value is exchanged is the core tenet of the business model.
- Network (sourcing and distribution): how the content is sourced and distributed is the foundation of the network. The network is only as strong as the content and the enablers.
- Arms dealer (enablers): the technologies and enablers to reduce friction between content and network or improve the experience between content and network is the mission of the arms dealer.
Most organizations choose one of these components as the primary business models and partner with the others to create a network economy. However over time, organizations realize they need to build business models that include two or even all three of these components.
In fact, successful winners of the digital era have created an asymmetrical advantage by taking over all three components. For example, in the consumer world, four companies have the ability to deliver on these network economy: Apple, Amazon, Google, and Microsoft. These companies have the content, the network, and the arms dealer capabilities to trade on trust and identity. These are the new components of the digital monopolies. Those who deliver on network economies will win when they open up their platforms for co-innovaiton and co-creation.
Are you ready for the digital platforms in your industry to emerge? Will you aggregate content, network, and technology platform to win?
(Cross-posted @ A Software Insider's Point of View)