Design Strategies to galvanize Ecosystems

SIMONE CICERO
@meedabyte #PDToolkit
Design Strategies to
galvanize Ecosystems
BizMedia Design ’16
Platforme & Co-Creation

This is an EXECUTIVE SUMMARY:
Know more about the Platform Design
Toolkit, get in touch with us and register
to the Platform Design Newsletter at:
WWW.PLATFORMDESIGNTOOLKIT.COM

PLATFORM DESIGN TOOLKIT - BORN IN 2013 TO HELP DESIGNERS
The motivation matrix to
look into motivations to
participate
The PD Canvas to map the
whole of a multi sided platform
model
A BIT OF
HISTORY
Launched in 2013 in
Barcelona Design Week
Platform Design Canvas: a
derivative of Business Model
Canvas plus a Motivation
Matrix
Mission: help designers design multi
sided business models, identify value
flows and design channels
accordingly

PLATFORM DESIGN TOOLKIT - MOVIGN TO POST INDUSTRIAL BUSINESS DESIGN
Finally the digitally
transformed economy
is moving towards a
post-industrial age
Firms are less about
organizing production
but more into organizing
interaction
THE CORE IDEA
BEHIND #PDTOOLKIT

POST INDUSTRIAL
THINKING?
A NEW CONTEXT

A research study and model that
described the five exponential
growth levers identified after
studying 50 organisations which
have grown more
than 50% in terms of revenue and
number of users between 2008 and
2013.
Result: growth is seen as a function of
connectivity, enablement and empowerment of
users and partners - a result of interaction and
reach.
MORE STUDIES:
THE PENTAGROWTH
THE PENTAGROWTH: GROWTH AS A FUNCTION OF ENABLEMENT AND INTERACTION

Asset Builders: build,
develop, and lease
physical assets
Service Providers:
provide services to
customers in form of
billable hours
Technology Creators:
develop and sell
intellectual property
Network
Orchestrators:
create a network of
peers in which the
participants interact
and share in the
value creation.
MORE STUDIES:
THE VALUE SHIFT
Studied the history of business
model and concluded that
Networked Business models are
the latest evolution in business
models (better performances)
“Our business model classification and analysis
says that Network Orchestrators outperform
companies with other business models on
several key dimensions: higher valuations
relative to their revenues, faster growth, larger
profit margins.”
(Deloitte and Open Matters Study)
THE VALUE SHIFT: PLATFORMS ARE JUST THE NEXT EVOLUTION OF BUSINESS MODEL

“…an effort to broadly redefine the
terms of competition for a market
sector through a positive,
galvanizing message that
promises benefits to all who adopt
the new terms”
from Deloitte’s “Business ecosystems come of age”
A SHAPING STRATEGY
TO GALVANIZE PARTICIPANTS

“…the ability to change how an
entire marketplace operates and
capture more value by doing
so…restructure entire markets and
industries by designing new
platforms and offering powerful
incentives to motivate third parties
to participate on them.”
from Deloitte’s “Business ecosystems come of age”
A SHAPING STRATEGY
TO GALVANIZE PARTICIPANTS

WHY DO PLATFORMS WIN?
Empowering the ecosystems by
creating a space where
relationships and exchanges can
flourish brands can multiply their
potential to shape markets
beyond their potential “industrial”
reach
PLATFORMS
HELP BRANDS
REACH
UNTHINKABLE
RESULTS

The PLATFORM
is a tool to let the
Firm access the
ecosystem
The boundaries of
the firm overlap with
the boundaries of
the Platform
The evolution of the
platform is to reach
bigger ecosystems
FIRMS BUILD PLATFORMS
TO ACCESS ECOSYSTEMS

“In many ways, [platforms like] Uber and
Airbnb represent a 21st century update of the
franchising model. In franchising, the parent
company brands and markets the product,
sets standards for producing it, and charges
a licensing fee and receives a percentage of
revenue... [now] technology radically lowers
the barriers to being a franchisee. In many
ways, you can call the modern trend 'the
franchise of one.'"
Excerpted from:
”Networks and the Nature of the Firm”
TIM O’REILLY ON PLATFORMS
THE FRANCHISE OF ONE

Increasingly the
tradeoff between
coordination (through
platform) and
motivation (through a
shared marketplace)
works better than the
extremes (industrial
firm or open market)
THE NATURE OF THE
FIRM IS CHANGING
IN THE MIDDLE BETWEEN COMPANIES AND MARKETS

Geoffrey Moore
“...the nature of the firm itself is
changing: this changes are deeply
disruptive to the hierarchical
management structures and are
changing the inner working of the
firm itself.”

PLATFORMS: AN
ANSWER TO A
CHANGING TECNO-
SOCIAL CONTEXT

“We’ve been seduced by the deep discounts, the monthly
automatic diaper delivery, the free Prime movies, the gift
wrapping, the free two-day shipping, the ability to buy shoes
or books or pinto beans or a toilet all from the same place.
But it has gone beyond seduction, really. We expect these
kinds of conveniences now, as if they were birthrights. They’
ve become baked into our ideas about how consumers
should be treated.”
Franklin Foer
THE NEW DESIRABLE

UBIQUITY
PRECISION
EXPERIENCE
EMPHATY
FAST
RELEVANT
PERSONALIZEDHUMAN
THE NEW DESIRABLE

We become what we behold.
We shape our tools and
then our tools shape us
A SELF REINFORCING SHIFT

NEW
EXPECTATIONS
NEW
TOOLS
(PLATFORMS)

Providing personalization for
each customer can be hard with
industrial approaches: the cost of
variants for small/niche
customers may harm revenues
and make it “unworthy”
PLATFORMS
MAKE THE
LONG TAIL
SUSTAINABLE
FOR BRANDS

Peer to peer helps create human
& personalized (long tail)
experiences in ways that are
impossible in a centralized way.
With less bureaucratization and
less capex required: through
design.
PLATFORMS
MAKE THE
LONG TAIL
SUSTAINABLE
FOR BRANDS

“What assets were for the
industrial firm, network effects are
for the post-industrial firm”
Esko Kilpi

“The main mission of platforms is
to make network effects possible”
“Platforms are the best means to flourish and
create growth in low transaction cost
environments, the same way as the industrial
firm was the best means to flourish and grow
in high transaction cost environments.”
Esko Kilpi

UNDERSTANDING
WHAT A PLATFORM IS

WHAT IS A PLATFORM?
“...business models that allow multiple sides
(producers and consumers) to interact [...] by
providing an infrastructure that connects
them”
Sangeet Choudary
Author of “Platform Scale”

“...a governance structure that determines
who can participate, what roles they might
play, how they might interact, and how
disputes get resolved plus additional set of
protocols or standards typically designed to
facilitate connection, coordination, and
collaboration.”
John Hagel’s definition excerpted from:
”Business ecosystems come of age”
WHAT IS A PLATFORM?

Aggregation Platforms - focused
on simple transactions,
connecting users to resources
mostly in Hub and Spoke -
middleman/gatekeeper - fashion
(Eg: Apple, Airbnb)
Mobilization Platforms - helping
people to “act together”, fostering
long term relationships (Eg: Linux,
Li & Fung)
Social Platforms - focused on
social interactions, connecting
individuals to communities, tend
to foster mesh relationship
networking (Eg: Facebook)
Learning Platforms:
facilitate learning, bring
participants together to
share insights, foster
deep/trust based
relationships, help
participants realize more
together and hone their
capabilities (Eg: World of
Warcraft)
J.HAGEL’s
TYPE OF OF PLATFORMS

Platforms support participants
(individuals and companies)
hone capabilities and improve
performances providing an
effective answer to the pressure
coming from digital disruption
PLATFORMS
ARE POWERFUL
ENGINES FOR
LEARNING

THE PLATFORM DESIGN CANVAS 2.0
Used to map the overall
platform’s dynamics,
important resources and
enabling and empowering
potential - helps understand if
the platform is doing its job of
sustaining the ecosystem in
value production with
enabling and empowering
services that the platform
should provide
SKETCHING THE
PLATFORM OVERVIEW

ROLES IN A PLATFORM
Platform
Owners
Stakeholders Partners Peer
Producers
Peer Consumers
players who owns
the vision behind
the realization of
the market and
ensure that the
platform exists
entities that have a
specific interest in
platform success or
failure, in
controlling platform
externalities and
outcomes
professional
entities that seek to
create additional
professional value
and to collaborate
with platform
owners with a
stronger
relationship
entities interested
in providing value
on the supply side
of the
ecosystem/market
place, seeking for a
better performance
entities interested in
consuming, utilizing,
accessing the value
that the is created
through and on the
platform
SUPPLY DEMANDIMPACT
KEY ROLES

TWO MACRO TRANSACTION TYPES, EXCHANGES AND SERVICES
Peers and Partners in the
platform should be able to
exchange value in peer to peer.
Multiple, coordinated
transaction-exchanges make up
more complex experiences: here’
s where design is key
EXCHANGES

TWO MACRO TRANSACTION TYPES
Channels and contexts allow
exchanges to happen inside the
platform with negligible friction.
They are key to allow value
creation: the platform should
actively create and improve them
all the time
CHANNELS &
CONTEXTS

THE ESSENTIAL TOOLS
Exchanges happen between
peers (and partners) through
channels (more formal) and
context (more intangible,
informal).
EXCHANGES

THE ESSENTIAL TOOLS
The right side of the Canvas is
used to model all the P2P
dynamics, peers exchanging
value with partners and other
peers in p2p fashion, through
the channels and contexts
designed for that, sharing
value and currencies.
THE RIGHT SIDE

Support services (empowering
and enabling) must be provided
by the platform to support
producing participant’s (peers
and partners) continuous
performance improvement
(through learning)
(SUPPORT)
SERVICES

Continuous performance
improvement is key: the most
successful platforms help
consumers become producers
and producers become partner
LEARNING

In many cases platforms provide
“complementary”, traditionally
organized (industrialized),
services for peer consumers
They complement the value
exchanged; they represent strong
single user utility
(CENTRALIZED)
SERVICES

THE ESSENTIAL TOOLS
The platform provided
services can be towards
producers and consumers.
Each service cluster on the
canvas is linked to the entities
(consuming and producing
peers and partners) on the
right.
COMPLEMENTING
WITH PLATFORM
PROVIDED SERVICES

THE ESSENTIAL TOOLS
THE LEFT SIDE
The left side of the Canvas is
used to model all activities
that the platform needs to put
in place to support value
creation and complement
consumption in the
ecosystem.

THE ECOSYSTEM CANVAS
Used to map all actors in an
ecosystem and what role they
play in it
MAPPING
ROLES

THE ECOSYSTEM’s MOTIVATION MATRIX
Used to dig deep into the
motivation that push entities
in the ecosystem to
participate: tracks the
advantages in participating
(needs met, opportunities
provided, positive outcomes)
and what each entity can “give
to” others
UNDERSTANDING
MOTIVATIONS &
INCENTIVES

PLATFORM DESIGN TOOLKIT - BORN IN 2013 TO HELP DESIGNERS
THE PLATFORM DESIGN
TOOLKIT 2.0 (DRAFT)
A revision of the type and set
of key ecosystem entities
A bigger set of canvases
3 Essential
2 Advanced
More holistic point of view
ADVANCED
ESSENTIAL

LET’S REFLECT FOR A MOMENT: THE KEY TAKEOUTS OF PLATFORM DESIGN
Long tail customer can be
profitable with peer to
peer
Platforms help brands serve long tail customers: peer to peer
transactions help create customized experiences in ways that are
impossible for brands to provide traditionally
Humanize services with
peer to peer
Peer to peer is the best way to humanize service personalization
achieving mass market personalization going beyond marketing
options overload
Shaping strategies
A market galvanizing shaping strategy is essential to conquer and
transform markets: designing incentives matters more than building
technologies
Enabling a learning
process is key
Learning is an essential trait of platform shaped markets: in times of
performance pressure, a learning process becomes the key product
you're offering on a platform
Centrally provided
services can complement
peer to peer interactions
On platforms is the combination of centrally organized services and
peer to peer transactions that makes the value proposition

PLATFORM DESIGN TOOLKIT - SOME OF THE ADOPTERS AND EXPLORERS

Thanks
Know more about the Platform
Design Toolkit, get in touch with us
and register to the Platform Design
Newsletter at:
www.platformdesigntoolkit.com
hello@platformdesigntoolkit.com

Thanks
Picture Credits:
NOAA Photo Library https://goo.gl/0gUQTH
Eduard Lefler https://goo.gl/T7GwHv

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