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A digital platform business typically connects producers and consumers of products and services. The platform enables the users to add value on the platform and engage in beneficial transactions. The key feature of any platform business is its ease of use. This enables more and more users to use the platform. The three main technologies that are driving the development of platforms is social, mobile and cloud. The fourth major technology that is being seen as important for platforms of the future is the Internet of Things.
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Ease of registering and becoming a user The benefits(or the attractiveness) of using the platform Smooth flow of interaction amongst the users.
Every platform must provide benefits to producers and consumers of products and services to use it for their advantage: Amazon provides a host of products at the right price point - which attracts buyers. On the other hand, it gives the opportunity to sellers to sell on its platform. The ease with which the users can find products is another factor for the success of the platform. For the seller, the incentive system and the reputation of the platform are really important as well.
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A two sided platform strategy means that there are 2 sides of a market and both the sides benefit when the other side increases participation. For example, on a single product eCommerce platform, if the number of buyers increase the number of sellers also increase because there is more demand.
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Similarly, if the number of sellers increase the number of buyers will also increase because of increased variety and lower price of goods and services. This sort strategy ensures that the platform grows exponentially, if the incentives and ease of usage for both the parties is high.
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A multi-sided platform business model is different from two-sided because here the users do not create direct value in terms of cash. For example in case of Facebook, although more users are benefitting the platform, these users are not paying for the service. Facebook is still deriving revenue from more users, but through advertisers. So, the more the number of users, the more number of advertisers would want to advertise and more the revenue. Other examples of Multi-sided platform model include Google and Facebook.
Choose a Niche One could start with say, a community of technology enthusiasts in a particular geographical region, like a city. Once the business starts to attract loyal users, one can move into other niches and expand the services. Creating Groups In The Niche Identifying the target audience in the niche is the next key step. Once the target audience is defined, their needs should be understood and they should be provided requisite benefits for being a part of the community. A Unique Selling Point The third and most important aspect of building a platform is to create a USP for the platform. How are benefits better than those of other platforms. Suppose, you are launching an eCommerce platform for end consumers and buyers, then a positioning like ‘The best value for money’ Or the ‘ the latest gadgets’ could help attract more users on the platform. Cost Management Hiring remote teams from an expert player like ValueCoders is an essential for developing and launching a digital platform business. ValueCoders provides Agile teams that provide adaptable and faster delivery of Agile software projects.