Platform thinking

Platforms are products on steroids. While individual products solve individual problems, platforms extend products by applying the same solution to multiple scenarios. They’re also more conducive to recurring revenues.

Let’s start with two examples.

Most of us know and love Nestle’s Nespresso products. Before the Nespresso revolution, the standard single-product approach would be to sell coffee through retail (either pre-packaged or takeaway). Nespresso changed all that by taking their products and moving sideways.

They created a series of proprietary capsules, coffee machines with many complimentary accessories (crockery sets, capsule “organisers” even coffee scented candles) and distributed via direct channels to hotels, businesses, retailers and consumers.

Google’s Chrome web browser is another example. The stand-alone product would be a web browser that just operates on one device and doesn’t even know if you own other devices (think Internet Explorer).

A more platform-oriented approach would be to create a browser that knows your bookmarks and your browsing history across all your devices allowing you to pick-up exactly where you left off from one device each time you start using a different one.

You can also extend the functionality of the browser with a suite of third-party extensions (similar to apps for your smartphone) to enhance your browsing experience (such as a reader to read large chunks of text or a presentation viewer to view slideshows). The browser could also be applied to different scenarios / product lines (e.g. Chromebooks which are super-cheap, “light” PCs with minimal memory and hard disk capacity that only allow you to browse the web or run web applications.)

What benefits does platform thinking bring to your business?

  • Better opportunities for recurring revenue and growth: you can have your same core product(s) earning income in many different ways.
  • Expanded brand: since you’re solving multiple problems, you will get more exposure and recognition (possibly in different markets).
  • Differentiation: chances are your competition isn’t thinking sideways. And even if they are, there are many different angles to tackle and approaches to take when building platforms. There’s no one-size-fits-all.

How to get started

  • Think sideways: think of other uses, applications and benefits your product can provide in different contexts.
  • Try breaking your product down into individual components that can be “sold separately”: however, they should compliment each other beautifully when combined.
  • Consider complimentary partnerships: who else can already stand on your shoulders to improve their own products?
  • What are some alternative distribution methods for your product?
  • Start with a basic prototype: test your thinking as early as possible, solicit feedback and continue tweaking before rolling out your platform more broadly.

Happy platforming!