Don't get Ubered. What Every Strategist Needs to Know About Digital Competition

1. 1 Don’t Get Ubered: What Every Strategist Needs to Know About Digital Competition! Annabelle Gawer, PhD Surrey Center for the Digital Economy Bryan Kirschner Apigee Institute

2. @AnnabelleGawer‪ @bryan_kirschner

3. The views expressed in this presentation are those of the presenter, and not necessarily those of Apigee Corporation or the presenter’s employer. 3

16. Cyber-Physical Age 16

27. Age of the Platform 27

28. Digital Platforms Competition and Innovation in the Platform Economy Prof. Annabelle Gawer I ♥ APIs London, 2 March 2016

29. ▪ Introduction: Why do platforms matter? ▪ Platform Fundamentals –  - What are Platforms / How Platforms Create Value •  - Network Effects / Platform Business Models ▪ Results from the Global Platform Survey ▪ The European Platform Observatory ▪ Discussion + Q&A Agenda 2 9

30. Some of my publications on (mostly digital) platforms 3

31. Agenda Technological Platforms A Gawer’s Platform Research 3 1 Platform strategies “Platform Leadership” •  Platform Leadership (HBR 2002) •  The Elements of Platform Leadership (SMR 2002) •  How companies become platform leaders (SMR 2008) Platform competition (economics and strategy) •  Platform owner entry and innovation in complementary markets (JEMS 2007) Platform governance (organization theory) •  The organization of technological platforms (RSO 2010) •  Institutional work as logics shift: The case of Intel’s transformation to platform leader (Org Studies 2013) •  Innovation Policy within Private Collectives (Technovation, 2013) Platform evolution (management & organization theory) •  Modelization, graph theory •  Ecosystem governance •  Platform boundaries •  Platform business models Conceptual clariﬁcation, leadership role in platform research •  Platforms, Markets and Innovation (2009) •  Bridging differing perspectives on technological platforms (Research Policy 2014, 6000 downloads, “best paper” AOM 2014) •  Encyclopedia & Handbook chapters •  Conference and symposia organizer / international reputation •  Keynote speaker Platform innovation (innovation studies) •  Industry architectures as determinant of successful platform strategies (EMR 2009) •  Industry platforms and ecosystem innovation (JPIM 2013)

32. Intro Why do platforms matter 3 2

33. # Most unicorns are platforms# 70% 30% Platforms Non Platforms Global Unicorns = 115 Source: P. Evans, CGE; CB Insights, Capital IQ, CrunchBase, 2015 Platform = 80 of 115 companies, $300B valuation 21

34. Netflix has over 70 million members in over 190 countries. Users watch more than 125 million hours of TV shows and movies per day. Sources: About Airbnb at: https://www.airbnb.com/about/about-us; Netflix at: https://media.netflix.com/en/press-releases/netflix-is-now-available-around-the-world; About LinedIn at: https://press.linkedin.com/about-linkedin; https://support.google.com/googleplay/answer/2843119?hl=en Airbnb provides accommodation listings in more than 34,000 cities and 190 countries. There are over 2 million listings world-wide; Paris alone has more than 28,000 listings. LinkedIn has over 400 million members in over 200 countries. Over 70 percent of users are outside the US. Over 100 million unique users access LlinkedIn each month. Google Play apps and digital content: Over 1.6 million Android apps are available in 136 countries world wide; Google Play movies available 105 countries; books available in 75 countries; music available in 62 countries. Platforms provide basis for rapid global scale The New Multinationals

35. Google play’s platform services Apps, movies, books, music No. of Services 4 services 3 services 2 services 1 service No service Russia Source: Google Play country availability: https://support.google.com/googleplay/answer/2843119?hl=en-GB

36. Google play’s platform services Apps, movies, books, music No. of Services 4 services 3 services 2 services 1 service No service Russia Source: Google Play country availability: https://support.google.com/googleplay/answer/2843119?hl=en-GB

37. Platform Fundamentals What are platforms How platforms create value 3 8

38. Platforms as Multi-Sided Markets with Network Effects 39

39. Innovation Platforms 40 Innovation platforms are technologies that facilitate the development of complementary innovation in innovation ecosystems (Gawer & Cusumano, 2002; Gawer, 2009) •  Economies of scope in innovation •  Sharing IP and tools to connect (APIs) •  Reduced search cost of complementary innovators •  Reducing barriers to entry for complementors in complementary innovation

41. The API Economy Google creates APIs to extend search and analytics beyond their own services

42. www.imperial.ac.uk/business-school Option 1 4 3 ServiceData Consumes Produces Improves experience Many free services One data set and common semantic The more context the more efficient and the more value Virtuous Feedback Loops in Digital Platforms Internet Service Provider Value enriched Data generates revenue Example: Search/Information Mgmt : # Rated auction/Selling: 43 User BI Based Revenue Models (eg Advertisement) Core Semantic Data Set Mindmap

43. Dating Bars Amazon market-place Transactional Air BnB UBER Google ARM Intel micro- processor The platform serves as an intermediary for direct exchange or transactions, subject to network effects Innovation The platform serves as a technological foundation on top of which other ﬁrms develop complementary innovations Facebook for Developers Apple iOS Apple App Store Google Android Facebook SAP NetWeaver Innovation Platforms MSPs Match.com Google Play Apple AUTOSAR Qualcomm PLATFORMS

44. Results from the Platform Survey 4 5

45. Companies Pla-orm ecosystem Hierarchal Organiza7on + Physical Assets* Asset Heavy Daimler Moovel Johnson Controls Panop7x GE Predix Samsung Tizen Asset Light Google Google Play Uber Uber app Airbnb Airbnb app Priceline Booking.com Structure * Includes HQ, other rooOops, retail outlets, manufacturing plants, service shops, etc. Pla-orm Mixed Apple App store Amazon App store Enterprise type Examples Reshaping enterprise structure# 29

46. 64 / $3,123B 27 / $181B 82 / $930B Global unicorn platform startups Europe is lagging N. America Europe Asia Source Global Platform Database 2016 Platform companies with a market value of US$1b or more on Dec 1, 2015

47. Global unicorn platform startups by city Source: P. Evans, CGE, CB Insights, Capital IQ and CrunchBase, 2015.

48. European Platform Landscape Source: Global Platform Survey, Center for Global Enterprise, 2016 Concentration in “Beer Drinking” Countries, Some in “Vodka Dinking”, none in “Wine Drinking” Countries Country City

49. What is needed to support platform growth in Europe? -  Reliable and complete data on platforms: To inform businesses and governments -  Critical mass of knowledgeable actors -  Knowledge + Experience networks, and shared expertise around platforms -  Executive training for managers: -  Platform strategies -  Platform business models -  How to develop innovative ecosystems -  Please share your ideas !

50. The European Observatory of the Platform Economy

51. Be a part of our network • Contact us • a.gawer@surrey.ac.uk

52. Thank you

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