The 4 Key Digital Platform Business Models.pptx

The 4 Key Digital Platform
Business Models

Get What You Need from Each Other
Platform
Producers Consumers
SUPPLY
Products
Services
Data
Skills
Money
Property
News
Content
Apps
DEMAND
Individuals
Big Orgs
Small Orgs
Governments
Machines
Asset light
Nearly-zero marginal costs
Network effects
Adapted from NewGrowthPlaybook, Simon Torrance
A platform is a business model that creates value by facilitating transactions between
buyers and sellers in an ecosystem, with the aim of capturing part of that value.

Car
Mechanic
Car Repair
Garage
Car
Owner
Reinventing the Car Repair Shop as a Platform
@MarcoTorreg
Copyright © Euro Freelancers 2022

Garage
(Intermediary)
Mechanic
(Supply)
Hiring mechanic
at his rate
Renting out mechanic
+ overheads
Bypassing Risk
Pipeline Model
Car Owner
(Demand)
@MarcoTorreg

Requirements + Budget + Payment
Offer
Listing Fee Model
Listing Fee Garage
(Facilitator)
Mechanic
(Supply)
Car Owner
(Demand)
Market
Access
Market
Access
@MarcoTorreg

2-Sided Commission Fee Model
Requirements + Budget
Offer
– 15% Commission Garage
(Enabler)
Mechanic
(Supply)
Car Owner
(Demand)
Payment
Market
Access
Market
Access
@MarcoTorreg

Requirements + Budget
Offer
– 7,5%
commission
Multi-Sided Commission Fee Model
Garage
(Orchestrator)
Mechanic
(Supply)
Car Owner
(Demand)
Spare Parts
Suppliers
(Supply)
Lend spare parts
– 7,5%
commission
Payment
Market
Access
Market
Access
@MarcoTorreg

Monthly /
yearly fee
Searches for skill, location, service
Offer
Subscription Fee Model
Garage
(Enabler)
Mechanic
(Supply)
Car Owner
(Demand)
Payment
Market
Access
Market
Access
@MarcoTorreg

https://www.simon-torrance.com/amazon-growth-flywheel
Growth Flywheel

Selection
Customer
Experience
Traffic
Platform
Lower Costs
Structure
Lower
Prices
Network
Effects
Adapted from NewGrowthPlaybook, Simon Torrance

Uber Business Model
Originally sketched on a napkin in a restaurant
by Travis Kalanick (Founder), while he was waiting for a taxi …
@MarcoTorreg

Other Platform Business Models
1.Opening to Third Parties
2.Connecting Customers
3.Reaching out to Customers’ Customers
@MarcoTorreg

Opening to Third Parties
Adapted from The Platform Chronicles, Andrei Hagiu and Julian Wright

Connecting Customers

Reaching out to Customers’ Customers

Examples of Other
Platform Business Models

Lead Fee
Customer posts a request on the platform, and
suppliers pay to bid for the job/project
e.g. Upwork
@MarcoTorreg

White Label
Sell/license a platform that someone else
can customize and use
e.g. getable
@MarcoTorreg

Freemium and Free Trial
Basic offering is free, but after users get hooked,
platform offers paid value-adding features
e.g. Linkedin
@MarcoTorreg

1-Sided Model
Platform where suppliers are also customers
and the other way around
e.g. Tinder
@MarcoTorreg

Re-Sale
Platform buys unwanted goods and re-sells them at a
higher value
e.g. second hand or recycling platforms
@MarcoTorreg

Ads Monetization
Platform charges third parties to publish their ads on
the platform
e.g. reddit
@MarcoTorreg

Affiliates & Referrals
Let third parties promote your platform or let existing
members refer new members to your platform
e.g. foodora
@MarcoTorreg

Cashback
Platform offers a number of credits to customers for
their next purchase on the platform
e.g. ikea used furniture marketplace
@MarcoTorreg

Data Monetization
Platform charges customers for giving access to its
transaction data sets
e.g. Zalando
@MarcoTorreg

Dynamic (Surge) Pricing
Platform charges customers a higher price to
encourage more suppliers to offer their services
e.g. Uber
@MarcoTorreg

Pay-As-You-Go
Platform charges users for the costs of a service when
it occurs rather than before or afterwards
e.g. Fon
@MarcoTorreg

Embedded Finance
Platform charges for additional financial services
e.g. accounting, lending, payroll and insurance
e.g. Shopify
@MarcoTorreg

Private Label
Platform also sells its own branded products and
services, essentially taking the role of supplier
e.g. Amazon
@MarcoTorreg

Token Based
Decentralised platforms with crypto
payments and a blockchain infrastructure
e.g. Open Bazaar
@MarcoTorreg

Platform Cooperative
Financial value of the platform is own and
distributed among its users and workers
e.g. Fairbnb
@MarcoTorreg

10 Signs You Are Platform Ready
1. Productivity gains through
automation and use of data
2. Manual processes / high
transaction costs
3. Fragmented value chain and
homogeneous supply
4. Frequency of use / purchase
5. Bad customer experience
(quality, speed, cost)
6. Inefficient assets utilization
and spare capacity
7. Poor satisfaction of market
demand
8. Low visibility / discovery of
supply
9. Low regulatory compliance
10.No disintermediation
possible
@MarcoTorreg

4 Key Priorities of Platform Execution
1. Focus on a core interaction. Make that core interaction
efficient and repeatable.
2. Create a self-scaling and self-learning business model.
3. Own and manage the key control points that ensure
dependence of the ecosystem on the platform (lock-in
effect).
4. Monetize without killing value creation.
@MarcoTorreg

Platforms Vs Pipelines
 Ecosystem is the new supply chain
 Network effect is the new economy of scale
 Data is the new currency
 Community management is the new customer service
 Trust and reputation are the new quality control
 User experience is the new sales funnel
 Engagement is the new loyalty program
 Escrows are the new payment systems
 Algorithms are the new decision makers Adapted from: The Platform Manifesto, Sangeet Paul Choudary

Selected Sources and Additional Reading
• The Lean Marketplace, Juho Makkonen and Cristobal Garcia, 2018
• A Guide to Marketplaces, Second Edition, Angela Tran Kingyens and Boris Wertz,
2018
• Platform Revolution, Geoffrey G. Parker, Marshall W. Van Alstyne, and Sangeet Paul
Choudary, 2016

Marco Torregrossa
marco.torregrossa@euro-freelancers.eu
about.me/marcotorregrossa
@MarcoTorreg

The 4 Key Digital Platform Business Models.pptx

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The 4 Key Digital Platform Business Models.pptx