Achieving Platform Dominance

20 Pages Posted: 12 Oct 2018

See all articles by Henry Birdseye Weil

Henry Birdseye Weil

Massachusetts Institute of Technology (MIT) - Sloan School of Management

Val Lee

MIT Sloan School of Management

Date Written: October 10, 2018

Abstract

Most business model innovations are platform plays. Platforms are business models and enabling infrastructure that create value for multiple, complementary constituencies through powerful network effects. Tipping dynamics can produce a dominant platform in a particular application, content, or market domain. This paper explores three questions of importance for platform entrepreneurs, investors, and users. Why do dominant platforms often emerge? What are the secrets of their success? How can you win the race for platform dominance? It uses the combination of a causal loop model and case studies to analyze the dynamics that shape the lifecycle of a platform. Past research emphasizes the economic value created by platforms. We highlight the value created by social features, e.g., sharing, conversation, collaboration, and influence, the importance of social network effects, and the role of functional features in enabling the social dynamics of platforms. This paper considers three critical phases of a platform’s development, each with its own signature dynamics. The three phase model highlights the strategic imperatives for successful platform development. The dominant dynamics at each phase are different, but set the stage for the subsequent phase. These evolving dynamics should define the focus and objectives of a platform development strategy.

Keywords: platforms, business model innovation, network effects, tipping dynamics, social value, causal loop model

Suggested Citation

Weil, Henry Birdseye and Lee, Val, Achieving Platform Dominance (October 10, 2018). MIT Sloan Research Paper No. 5529-18. Available at SSRN: https://ssrn.com/abstract=3264998 or http://dx.doi.org/10.2139/ssrn.3264998

Henry Birdseye Weil (Contact Author)

Massachusetts Institute of Technology (MIT) - Sloan School of Management ( email )

E52-561
Cambridge, MA 02142
United States
617-258-6101 (Phone)
617-253-2660 (Fax)

Val Lee

MIT Sloan School of Management ( email )

100 Main Street
Cambridge, MA 02142
United States

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