The definitive set of design thinking and system modeling tools to design digital and non digital Platforms to access powerful Ecosystems and reach objectives way beyond the boundaries of your firm

Simone Cicero@meedabyte #PDToolkit www.meedabyte.com

2.0 DraftExecutive Summary

WWW.PLATFORMDESIGNTOOLKIT.COM

This is an EXECUTIVE SUMMARY:

Know more about the Platform Design Toolkit, get in touch with us and register to the Platform Design Newsletter at:

WWW.PLATFORMDESIGNTOOLKIT.COM

● First signals of a shift in business models

● Business Model Canvas not “fit” for multi sided business

● Launched in 2013 in Barcelona Design Week

● Two tools (PD Canvas, Motivation Matrix)

Mission: help designers design multi sided business models

Help designers identify value flows and design channels accordingly The motivation matrix to

look into motivations to participate

The PD Canvas to map the whole of a multi sided platform model

The launch of PDT (2013)

Moving towards a post-industrial age

Firms are less about organizing production but more into organizing interaction

Strong signals of such an evolution were already clear in 2013

The Original idea behind PDT 1.0

More Studies confirmed superior nature of networked business models: the Pentagrowth

A research study and model that described the five exponential growth levers identified after studying 50 organisations which have grown more than 50% in terms of revenue and number of users between 2008 and 2013.

Result: growth is seen as a function of connectivity, enablement and empowerment of users and partners - a result of interaction and reach.

“Our business model classification and analysis says that Network Orchestrators outperform companies with other business models on several key dimensions: higher valuations relative to their revenues, faster growth, larger profit margins.” (Deloitte and Open Matters Study)

Asset Builders: build, develop, and lease physical assets

Service Providers: provide services to customers in form of billable hours

Technology Creators: develop and sell intellectual property

Network Orchestrators: create a network of peers in which the participants interact and share in the value creation.

More Studies confirmed superior nature of networked business models: the Value Shift (Deloitte + Open Matters)

NETWORK ORCHESTRATORSThe latest evolution in

business model for interconnected world

The PLATFORMis a tool to let the Firm access the

ecosystem

The boundaries of the firm overlap with

the boundaries of the Platform

The evolution of the platform is to reach bigger ecosystems

FIRMS BUILD PLATFORMS

TO ACCESS ECOSYSTEMS

AND SHAPE MARKETS

SHAPING STRATEGY

“…an exciting potential is the ability to change how an entire marketplace operates and capture more value by doing so.

…restructure entire markets and industries by designing new platforms and offering powerful incentives to motivate third parties to participate on them.

…ecosystems enable the participation of large and small organizations (or individuals) in creating value at a scale beyond the possibilities of a single firm from Deloitte’s “Business ecosystems come of age”

Tim O’Reilly on Platforms

“In many ways, [platforms like] Uber and Airbnb represent a 21st century update of the franchising model. In franchising, the parent company brands and markets the product, sets standards for producing it, and charges a licensing fee and receives a percentage of revenue from each of its franchisees. The difference is that technology radically lowers the barriers to being a franchisee. In many ways, you can call the modern trend 'the franchise of one.'"

Exceprted from:”Networks and the Nature of the Firm”

The nature of the Firm is changing

Increasingly the tradeoff between coordination (through platform) and motivation (through a shared marketplace)works better than the extremes (industrial firm or open market)

How to define “Platforms” in the end?

“...a governance structure that determines who can participate, what roles they might play, how they might interact, and how disputes get resolved plus additional set of protocols or standards typically designed to facilitate connection, coordination, and collaboration.”

John Hagel’s definition exceprted from:”Business ecosystems come of age”

How to define “Platforms” in the end?

Offering to the ecosystem participants an opportunity to get better, professionalize, get more opportunities and hone their capabilities, platforms represent powerful tools to answer the disruption driven performance pressure of our times

Aggregation Platforms - focused on simple transactions, connecting users to resources mostly in Hub and Spoke - middleman/gatekeeper - fashion (Eg: Apple, Airbnb)

Mobilization Platforms - helping people to “act together”, fostering long term relationships (Eg: Linux, Li & Fung)

Social Platforms - focused on social interactions, connecting individuals to communities, tend to foster mesh relationship networking (Eg: Facebook)

Learning Platforms: facilitate learning, bring participants together to share insights, foster deep/trust based relationships, help participants realize more together and hone their capabilities (Eg: World of Warcraft)

Always according to J. Hagel: we can recognize four types of Platforms

LEARNINGIS THE KEY FEATURE

OF PLATFORMS

Platforms are tools for Learning Platforms help brands reach unthinkable results

Platforms support individuals and companies hone capabilities and improve performance providing an effective answer to the pressure coming from digital disruption

By empowering others in the ecosystems and by creating channels for transactions and relationships, brands can multiply their potential and impact on markets way beyond their reach

Why do platforms win?

Creating Channels Empowering Contributions

PDT can help you understand if your platform has the right channels in place to support those who want to share value and transact: the more this happens inside your platform the more it will be a successful one

PDT can help you designing services that support Partners and Peers to perform better as professional and build more value on your platform, dramatically improving resilience

How can Platform Design Toolkit help me design the future of my business processes?

2.0 DraftOpen forComments

WWW.PLATFORMDESIGNTOOLKIT.COM

Detailed Explanation for full context see:

bit.ly/PDT20DRAFT

The Platform Design Toolkit 2.0: main changes!● a revision of the type and set of key ecosystem entities you need to model

(now including Partners besides Platform Owners, Peers and external Stakeholders)

● a bigger set of canvases (now four instead of two)● a broader integration of aspects that go beyond the value production, such

as evaluating externalities, platform governance and platform innovation

Platform Owners

Stakeholders Partners Peer Producers

Peer Consumers

players who owns the vision behind the realization of the market and ensure that the platform exists

entities that have a specific interest in platform success or failure, in controlling platform externalities and outcomes

professional entities that seek to create additional professional value and to collaborate with platform owners with a stronger relationship

entities interested in providing value on the supply side of the ecosystem/marketplace, seeking for a better performance

entities interested in consuming, utilizing, accessing the value that the is created through and on the platform

A model of roles and entities involved in Platforms

The PDT 2.0 - RolesThe Platform Owners This category refers to the “owners” of the Platform: ultimately this set of

players owns the vision behind the realization of the market, and is ultimately

responsible to ensure that the platform exists in production.

Typically: Startups/Scale-ups …then corporate firms, shaping firms; nothing

prevents this to be a non-profit organization, a foundation or a cooperative. In,

still rare, cases peers can also be somehow ownersof the platform – such as

in the Bitcoin Blockchain ecosystem, where peers collaboratively, effectively

own the infrastructure that makes the platform.

Examples: Airbnb, Apple (re the Apple app store ecosystem), Google (re the

Android ecosystem for example), the Bitcoin miners network, Tripadvisor,

WordPress (the firm), etc...

Stakeholders Are the entities that have a specific interest in platform success or failure, in

controlling platform externalities and outcomes, in regulating it or in

exercising rights in the platform governance

Typically: public actors or bodies dealing with regulation and control of

platforms on a local basis, representatives of communities of peers and

partners involved in the value creation, pre-existing institutions.

Examples: A municipality affected by the gentrification effects of short time

rentals, the government, a holding group, a pre-existing incumbent, a pre-

existing network or association of professionals interested in joining the

platform.

The PDT 2.0 - Roles

Peers (Peer Segments) – Consuming Peer (CP, users): these are entities – most of the times individuals but can also be small/medium business and single representatives or teams in bigger organizations – interested in consuming, utilizing, accessing the value that the is created through and on the platform. Eventually they may evolve into producing peers, when they realize that beyond fulfilling a need they can seek evolution opportunities.

– Producing Peers (PP, citizen producers, prosumers, providers….): these are entities – most of the times individuals – interested in providing value on the supply side of the ecosystem/marketplace, usually seeking for opportunities to improve their professionality and honing their capabilities towards a better performance

Examples: The Airbnb hosts (PP), the Airbnb travelers (CP), WordPress bloggers (CP), Salesforce customers (CP), AngelList Angels (CP), AngelList Startups (PP), Houzz users (CP)

The PDT 2.0 - Roles

Partners Partners are essentially professional entities – individuals and small/medium

enterprises, most of the times – that seek to create additional professional

value and to collaborate with platform owners at a stronger stage of

relationship. Typically, partners are professional value creators that tend to

specialize in a niche or advanced/premium product/service and become

better and better within time. Partners sometimes also facilitate, cater,

enhance the value production by acting as broker, facilitators, connectors.

Examples: Airbnb Superhosts, WordPress theme developers, Apple or

Android developers, Salesforce Forge developers, AngelList syndication

SuperAngels, WordPress Cloud service providers, Houzz professionals

The PDT 2.0 - Roles

The PDT 2.0 - Other key conceptsInfrastructure and core components

Infrastructure and core components are controlled and owned by the platform owners and governed according to the platform governance. Assets that ensure the platform works and is usable by the ecosystem.

External components (Bricks/APIS)

External components can be used to build and reinforce the value propositions of any given platform. Most of the times these components are available in PAYG (Pay As You Go) mode (or in general as a utility) and are easily integrated with the platform workflow. The platform itself can offer utility like APIs and bricks to other players .

Channels (as evolution of Contexts)

Every relationships is born in a context and transactions happen better thanks to controlled and designed contexts that evolve into what we call channels. A context is defined more broadly than a channel and the latter can be often considered an evolution of the first. A refined and optimized channel should be available to make transactions easier. When complex transactions are broken into several sub-transactions a channel must exist for every phase to happen smoothly.

Transactions and value Platforms are ways to organize interactions and

ultimately transactions among an ecosystem

A Transaction is as a sub-action (part of a more

complex “experience”) during which value - in different

forms - is either created, provided, transferred or traded

among two (most often) or more entities.

● Typically pertains to two parties

● Value is consumed (as in utilities) or exchanged (as in exchanges) or

delivered (as in services) in whatever form: monetary value, reputation,

experience, use value, curation, knowledge, information, energy, kudos,

etc...

● Value can be tangibly identified and most of the time it can be

measured - though not precisely (intangibles)

Utilities: providing a third party (that can also be and often is another platform) with componentized information and access to the whole system of services and exchanges happening in the ecosystem, through a packetized and/or programmable interface (eg: APIs).

Services: provided by the platform as “organized services” (by organising components, infrastructures, resources to provide a common service) directly to Partners (enabling services) and Producing Peers (empowering services)in one-to-many pattern. Industrialized services can be provided to peer consumers as complementary of the experiences provided by the ecosystem through the platform.

Exchanges: these transactions happen between two entities in the ecosystem and consist of exchanging or transferring ownership of a currency or other stores of value (assets, money, token, credits), providing elements of intangible value (such as reputation, trust, kudos, likes, etc…), providing labour/work or enabling access to resources.

The PDT 2.0 - Value Generation Activities

Maintaining & Producing the InfrastructureRunning the infrastructure the platform ultimately relies on to work enables value creation to happen entirely.

Core Value PropositionThe primary value that the platform seeks to create for its core target

(can be Partners, Peer Producer or Peer Consumer).

Most of the times, in platforms and ecosystem that include Peer Consumers this is the peer segment ultimately being the target of the core value proposition. In many occasions a – even if the ecosystem

includes peer consumers – ultimately the Core Value Proposition may be directed to Partners serving the peer consumer base.

Ancillary Value Proposition

The ancillary value proposition is a secondary value that the platform seeks to enable. This is usually targeted to the same target segment of the Core Value proposition

but can also be targeted to a different one.

ENABLING

From Exchanges and Services

The PDT 2.0 - Steering Activities

Design and Evolution of the Platform

This activity is key to enable a platform that is able to evolve and adapt to changing conditions and to cope with changing demands in the ecosystem (see How Platforms Evolve). Example of such activities is the evolution of a platform design (eg: improving software code base), improving security of data, designing policies and strategies for reputation management, designing the overall user-journey, etc…

Governance of the Platform

Governance of the platform relates with complex decision affecting the internal and external of ecosystem scope and entity. Examples of such activity relates with conflict resolution with stakeholder, key decisions in ownership, value distribution, policing, etc...

Every platform needs to evolve and be governed therefore is subjected to two key “steering” activities that shape its evolution

The PDT 2.0 (Draft)The new set of Tools

ADVANCED

ESSENTIALS

Used to map all actors in

an ecosystem: prioritize

entities according to

potential impact for

platform success, and

according to the level of

attraction they have for it,

and end up with a set of

maximum five entities

globally (peer consumers,

peer producers, partners).

Also to be used to track

bricks and API’s to be

used in building the

platform.Link for comments: https:

//goo.gl/AKDJJK

ESSENTIALSESSENTIALS

Used to dig deep into the

motivation that push

entities in the ecosystem

to participate: helps you

track the main

advantages in

participating in the the

ecosystem through the

platform (namely, needs

they can meet,

opportunities they can

find and such positive

outcomes) and what each

entity can “give to” others.Link for comments: https:

//goo.gl/0NxHd5ESSENTIALS

Used to rapidly map the

overall platform’s

dynamics, important

resources and enabling

and empowering potential

- will help to understand if

the platform is doing its

job of sustaining the

ecosystem in value

production, will also help

you identify enabling and

empowering services that

the platforms should

provide.Link for comments: https:

//goo.gl/NMlQccESSENTIALSESSENTIALS

Used to understand better

and dig up the the details

of the transactions

happening in the

ecosystem. The use of

the transaction matrix is

not mandatory but it is of

great help in identifying

the key elements of each

transaction that happens

in the ecosystem.

Link for comments: https:

//goo.gl/lYpxQfADVANCED

Used to identify who’s to

produce the “Core Value

Proposition” and the other

Value Generation

Activities and how such

activities impact on

external stakeholders and

to complement this by

thinking how the different

entities should be

involved in platform

steering activities.

Link for comments: https:

//goo.gl/jmeiOU

ADVANCED

This is an EXECUTIVE SUMMARY:

Know more about the Platform Design Toolkit, get in touch with us and register to the Platform Design Newsletter at:

WWW.PLATFORMDESIGNTOOLKIT.COM

www.meedabyte.com

This work was originally inspired by the Business Model Generation Canvas by Alex Osterwalder (http://www.businessmodelgeneration.com) and is licensed under the Creative Commons Attribution-Share Alike 4.0 International License.To view a copy of this license, visit: http://creativecommons.org/licenses/by-sa/4.0/

For consulting, advisory and workshop requests on Platform Design get in touch:

> hello@platformdesigntoolkit.com > https://www.linkedin.com/in/simonecicero www.meedabyte.com