The growth of artificial intelligence has enabled a variety of new strategies and business models, from programmatic ad targeting to the sharing economy to the metaverse. The companies that have been most successful in employing these models — digital natives, almost to a one — have been “multi-sided platforms,” in which a company at the hub of an ecosystem or business network coordinates services and reduces friction for customers. Facebook, Apple, Airbnb, Amazon, Google, Uber, Alibaba, Tencent, and the other leading platform companies have created value at astounding rates.
How Legacy Companies Can Pivot to a Platform Model
Lessons from several firms who have made the switch.
March 09, 2022
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Summary.
Platform companies like Facebook, Amazon, Google, and Tencent have created value at stunning rates. They grow rapidly and own few assets — and they’ve all made strong use of AI. What can legacy companies learn from these platforms? And is it possible for legacy companies to use this business model, too? Looking at legacy firms that have successfully done just that, companies should: 1) Strategize about how ecosystem relationships will improve your offerings, and seek out those partnerships. 2) Ensure that data comes with the relationship. 3) Develop an API-based IT services architecture. 4) Identify the key decisions that AI needs to make, and gather the data to train models. 5) Design a seamless process from the customer’s standpoint. And 6) Use data from across the ecosystem to improve models and offerings.