Questions and answers
Below Tero Ojanperä and Timo Vuori answer those questions received through the event chat that we did not have time to cover during the event.
Q: Build new platform or take benefit of existing 3rd party one?
A:Either option can be a good one. There are several factors influencing which option is better. How likely is your own platform to succeed? How much power can you have in the existing 3rd party platform? Hilti showed a good example of dual-platform strategy: build own by leveraging data from their equipment and leveraging existing platform, Autocad, to expand distribution.
Q: How do you see the role of opening your platform to others in successful digital platforms (like SalesForce Customer 360 platform for application developers)?
A: Opening up the platform often leads to increased customer value. It’s the way platforms expand. Of course, you need to analyze every situation separately, as there can be some risks associated with opening the platform.
Q: Should one start with Business Model Innovation (platform business model) - or begin with building a platform as capability (MVSC - minimum valuable & scalable capabilities)? Especially B2B (manufacturing )?
A: Getting the business model right is absolutely necessary. Usually this requires some iteration and learning from customer reactions. Hence, you cannot completely separate BMI and capability building. Nevertheless, you should make sure you stay close enough to customers and take their preferences and reactions into account as you develop your platform. We reflect these questions also in our course on platform strategies: https://www.aaltoee.com/programs/business-models-with-intelligent-platforms
Q: How do you see the data monopoly of the platforms?
A: Depends on the situation and how companies use their monopoly. Regulation tries to address this question.
Q: You mentioned that the high valuations of platform companies also reflect social value (in addition to reducing information search, communication, and transaction costs, etc); but do these valuations reflect present social value or expectations about the future?
Naturally, they reflect both. The technical problems of Facebook and What’sUp last week showed us how much we rely on them in our communication. It’s a reflection of their current value to the society.
Q: How do you prioritise opportunities to invest in - I am sure there may be tonnes of possibilities that you witness?
A: In our book, we propose a backtracking exercise to address this challenge. You imagine your vision, trace multiple alternative paths from the vision to present. Then you choose the path that provides highest immediate payoff with least effort and investment.
Q: Many companies exploit and explore but the difficulty seems to be in transitioning to exploit the explored. How to make that transition more successful, identity?
A: You need both structural and psychological solutions. In our blog, intelligentplatforms.ai, we describe some of the key psychological approaches.
Q: Is leadership a big hurdle for “identity” as leadership most of the time driven by capital markets & shareholders & incumbent inertia?
A: Leadership can influence company identity, but often it’s also the leaders’ identities that cause inertia in companies. Check in particular this blog from us: https://intelligentplatforms.ai/how-to-re-establish-your-self-esteem-in-the-platform-era/
Q: How do you see the platform economy as one solution to the climate crisis? Are there platform-based climate innovations?
Platforms can organize various business activities more efficiently than traditional models. This can be beneficial broadly. And, of course, platforms enable much innovation that can help in addressing the climate crisis. There are many companies that are building platform based business model to fight climate change. For example, Betolar is building a AI based platform to enable cement replacement with geopolymers (cement produces about 7% of world’s CO2 emissions) and Patchama is an online platform that allows you to review and support forest efforts around the world to offset carbon emissions.