My platform business models journey

Writing this blog after a long gap. New administrative responsibilities at my school required me to invest some mindspace towards understanding the role, my team (and their roles), and setting up priorities and processes.

I am also figuring out how to respond to blatant plagiarism – some pages from this blog have been plagiarised (word by word, including my writing in first person!) and reproduced at another blog. For example, check this out: http://digiplus.runwise.co/network-mobilization-platform-businesses/ and how this page is different from the original post: https://srini108.wordpress.com/2016/05/26/network-mobilization-in-platform-businesses/. Another page that has been plagiarised is here: http://digiplus.runwise.co/building-platform-business-hard-work/, which is an exact copy of my post at https://srini108.wordpress.com/2016/05/03/building-a-platform-business-is-hard-work-not-for-lazy-people-a-response-to-prof-ajay-shahs-column-in-the-business-standard/. I have written to the supposed author requesting for removal of the infringing posts, but have heard no response. Plus, I have left comments at the bottom of the infringing blog pages that those pages were indeed plagiarised, but those comments are “awaiting moderation”. I have now learnt a lesson. All these pages now come with an explicit copyright assignment, and I am going to make it difficult to plagiarise with increasing use of personal pronouns.

Today morning, I was asked by our Dean to present the evolution of my research, teaching and consulting interest in platform businesses. It was an interesting exercise of thinking through the evolution over the past three years. In this blog post, I intend to capture a  short glimpse of the same.

A network of accidents

It all began with a network of accidents. Three accidents to be precise. A dorm-mate from over 20 years back invited me to his company (he had just relocated to Bangalore) for a short discussion on product design ideas. When I went there, I discovered that apart from him, there were enough members of his team who were my students at both IIMB and IIML. Which made the discussion interesting and lively. The “product” that they were developing was actually a platform for the FAs to serve their business process outsourcing customers. And we had a fruitful discussion on the economics of platforms, why network effects are important to understand, and how can the company monetise the efforts, if they chose to (subsequently, they chose not to monetise the platform directly).

The second accident was when a colleague of mine at IIMB could not attend an event his friend was planning. This friend was an entrepreneur setting up a business around pharmaceutical retail supply chain, and had invited his “Professor friend” to talk to his customers (pharmaceutical distributors). My colleague could not attend the event, and requested me to stand in for him. I travelled to Chennai, had an eventful breakfast with the founding team; and over a couple of aloo parathas (potato filled Indian bread), changed their business model from a SaaS model to a platform business model. The said breakfast meeting, I am told, is currently a legend in the company history/ water cooler talks.

The third accident took place (though not in the same chronological sequence as being reported) when another colleague of mine from the Quantitative Methods was leading an team writing a case on a firm. The case writing team felt that there were more strategic issues in the case, and invited me to join in one of the meetings. During the meeting, it was apparent that the firm was transitioning from being a product firm (selling boxed software) to a platform-based business, where product was just a hook for a variety of other services and value propositions.

Consulting and advice leading to case writing and research

These three accidents led me to document them as cases, and I began providing advise/ consulting to some of them. I got introduced to more firms operating platform businesses, and discovered that some of these entrepreneurs were actually making decisions about platform businesses, quite intuitively, without actually knowing the theoretical work behind the same. And boy, weren’t they successful! They have survived the dot-com bust, a series of recessions, and the growth of digital businesses. More learning talking to these entrepreneurs (academics call this as grounded theory). More cases followed, and I began to understand the economics behind the same. I initiated a series of projects around the same, got funding from IIMB and FAU for the same, and wrote a series of cases.

Evolution of the course(s)

As the number of cases bludgeoned, I was invited by the FAU (http://wi1.uni-erlangen.de/) to teach a course on digital business, and I latched on to the opportunity to launch a course on platform strategies. That one course led to another, and I offered an improved version of the same at IIMB immediately thereafter, and then as the number of cases grew, and I began filling in learning gaps, offered a larger version of the same at IIM Trichy. And now both the FAU course (http://wi1.uni-erlangen.de/teaching/strategies-platform-mediated-organizations) and the IIMB course (http://www.iimb.ernet.in/node/5610) have now become 5 ECTS and 3 credit (full thirty hours) courses.

This blog

As the courses matured, I began writing a lot of notes for myself. In fact, true to a business school professor, I would typically prepare for the class, get a lot of insights to share with the class, share a few in class, and the rest of them would remain in my notes. Some of my students continued to urge me (no, I am not substituting it with encourage) to write a blog. And I began this blog in April 2016 (once my course was over). My teaching assistant, who travelled with me to IIM Trichy and took copious notes of my classes was extremely helpful in ensuring that the information loss from the class discussion to the written notes was minimised.

Blog leads to more connections and research

Based on this blog, some of you came back to me seeking specific advice on setting up and running platform businesses; I engaged with a few firms, and more cases followed. The blog now has led me to more connections, and spurn on more research questions. In the meantime, a lot of my PGP and EPGP students have undertaken projects on specific questions around the platform business models (I will run a series on those projects in the next few weeks), and more insights and research questions emerged.

24-1-journey

The journey has been exciting, I have learnt a lot. And hopefully, things will continue.

(C) 2016. R. Srinivasan, IIM Bangalore.

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Author: Srinivasan R

Professor of Corporate Strategy at the Indian Institute of Management Bangalore. All views are personal. The views and opinions expressed here are of the author, and not those of the Indian Institute of Management Bangalore; and are not intended to endorse, harm, malign, or defame any individual, group, or organisation.

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