The essential guide to successful platform building

The chicken or egg problem

First and foremost for those who are still not familiar with what a platform really is let´s pass in review some principals to understand better what defines this model and how it is different from the traditional one.

1.1-What is a platform?

Geoffrey G. Parker author of Platform Revolution defines it as:

”A platform is a business based on enabling value-creating interactions between external producers and consumers. The platform provides an open, participative infrastructure for these interactions and sets governance conditions for them. The platform’s overarching purpose: to consummate matches among users and facilitate the exchange of goods, services, or social currency, thereby enabling value creation for all participants.”

1.2-What differentiates a platform from the traditional business (Pipeline)?

From this picture, we can see the fundamental difference between the two models. As the pipeline model is a direct transaction between two sets of users a producer and a consumer of defined product/service, the platform offers more of a ´fair´ alternative where value is generated by the interaction between the different sets of users.