Firm of the Future - Part II

In the last few years, platforms have become attractive for a number of reasons:

- Non linear revenues : Costs are almost delinked to revenue growth - enabling geometric growth in Profit and corresponding market valuations

- Extensibility of the platforms to multiple markets with minor localisation

- Extensibility of the platforms to multiple product/service categories, multiple customer segments ( e.g. using Amazon as a B2B platform , beyond the original B2C , Adding Artwork as a category etc...)

Platforms bring a different dimension that is hiterhto unknown in the traditional business world. That is taking data from one set of customers and making money by offering this data to another set of customers.

Easier to understand with an example.  A health app ( that encourages/tracks healthy lifestyle/diet/excersize etc ) is free for retail customers to use , update data and track their own health. But the platform owner makes money by offering this data to insurers who can now underwrite better policies thanks to the rich data they have of these customers and their likelihood of getting sick.

By the same logic , a retailer may make more money of the data patterns that it collects of its customers , than by selling groceries to them! ( subject to customer privacy of course!) 

Did you know that Samsung makes more money selling components to Apple than selling its own phones? 

A prerequisite for the Firm of the Future is to have this kind of disruptive thinking that goes beyond traditional business models to make money. Nothing is off limits!