What is a Platform Business Model? So what is the difference between traditional and platform business models? A traditional, linear business takes in raw materials/components, creates products or services and sells them to its customers. A linear business owns its own inventory.
In contrast, a platform business facilitates value exchanges between two or more interdependent groups, usually consumers and providers. Platform businesses can be both physical and virtual (Alibaba, eBay). Platform businesses are valid in B2B, B2c and public and private sectors. In platform businesses, providers both get value from and give value to the platform, and consumers do the same. Platforms can have many more than two sides. For example, Facebook has at least four: it connects users, third-party application developers, advertisers, and third-party websites
Platform businesses exist in a platform ecosystem. The ecosystem consist of the value exchanges that are taking place; the space for conducting platform business; the players who participate; the rules by which platform business is conducted; and the tools which are available to those players. Businesses and individuals participating in a platform ecosystem benefit from network effects where the value of the platform goes up the more participants use it. Platform business ecosystems are most valuable in a market where there are lots of players.
There are Three Archetypal Platform Business Models
ManoSage has been working on adapting that platform utilizing our own set of rules, strategy, and product development methodology and tailoring it into a tangible product development platform.
