“For anyone who follows the world of business, it is now common knowledge that the most valuable firms on the planet and the first companies to surpass the trillion-dollar mark in value (albeit temporarily) are platforms,” Michael Cusumano, Annabelle Gawer and David Yoffie write in their recently published book “The Business of Platforms: Strategy in the Age of Digital Competition, Innovation, and Power.” In a list of more than 200 startups with valuations of $1 billion or more, they estimated that platforms made up between 60% and 70%.

What do we mean by platform? The book offers a simple definition. “Platforms, in general, connect individuals and organizations for a common purpose or to share a common resource.” Read More

Platform strategy is sweeping through the business landscape, upending industries as companies adopt a business model based on enabling interactions between external producers and consumers. Companies like Airbnb, Uber, YouTube, Amazon, and Facebook have set the model for platform economies, with competing companies scrambling to catch up.

Not all industries have been affected equally, however. Retail executives and journalists have seen their industries transform rapidly, while airplane engineers and heart surgeons have not.

Platform transformations work best in industries with precise output, low regulation, and spare capacity. Read More

Platforms are environments, computing or otherwise, that connect different groups and derive benefits from others participating in the platform. The underlying concept covers companies from Google to Facebook to video game platform Steam to Taser (more on that later). 

“’Platform Strategy’ is one of our few courses where participants can spend an hour debating on what they are learning about is,” MIT Sloan Professor Catherine Tucker tells students in her executive education course on platform strategy. “Don’t get hung up on definitions. Being a platform or not is more of a range than a set point.” Read More