Platform Economy Myth #2: There Are Only Two Or Three Platform Business Models

Ted Schadler
Vice President, Principal Analyst
May 29, 2018

We’ve been analyzing the sacred myths of the platform economy and revealing the real practices that platform businesses have mastered. This is work from our report, “Earn Your Place In The Platform Economy.”

Myth #2: There are only two or three platform business models. Reality: There are as many platform business models as there are actual business models.

This myth — that every platform business is a marketplace or an aggregator — is damaging when it prevents incumbent firms from seeing how their business model can be improved through software. (Entrepreneurs aren’t trapped in that rut — they just find a customer problem to solve with a killer application and move forward.)

Here are some examples of diverse platform business models:

  • Amazon is a retailer (among other things).
  • Facebook is a publisher.
  • DoorDash delivers food and stuff.
  • IBM Watson hosts algorithms.
  • Lyft gives people rides.
  • Cake sells workers’ compensation insurance.
  • Masabi handles transport ticket transactions.
  • Netflix creates and distributes video.
  • Labviva helps scientists find the right laboratory reagents and helps procurement teams buy them.
  • GE’s Predix helps companies maintain their equipment.
  • SupplyOn helps companies buy parts.

After conversations with 33 founders and executives of platform businesses, we are convinced that software platforms will affect the strategy and economics of some part of the value chain of every industry. See our back-of-the-envelope forecast below.

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