A platform company generates value by enabling interactions, transactions, or relationships. A platform company leverages network effects (direct/same side or indirect). Platform companies are also known as platform business models, given their intrinsic way of creating value for users.
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What is the level of digitalization?

Based on the research of FourWeekMBA, we identified four levels of digital transformation:
- Level one: tech and digitally-enabled
- Level two: tech-enhanced
- Level three: platforms and interactions
- Level four: business ecosystem
One of the most influential business models of the digital age is the platform business model, which created a paradigm shift.
The platform business model

The platform business model requires a paradigm shift, as you need to think about “how do I sell my product” to “how do I enable others to interact and transact on top of the platform?”
This is the essence of platform business models.

Platform business models are based on three main premises:
- Network effects.
- Control points.
- Economic/Non-Economic Incentives.
The most crucial aspect of kicking off a platform and scaling it is network effects.
Platforms and network effects

Network effects can help a platform kick off, scale and maintain its relevance to users as it builds momentum.
Yet, platform business models also require a considerable amount of maintenance, engineering, and understanding of complex dynamics.
And thus, they need to make sure negative network effects are prevented.
Beware of negative network effects

In general, negative network effects can be classified in:
To understand them to read the following case studies:
Inside business platforms

The next evolution of platform business models is business platforms/ecosystems.
The epitome of it is Apple’s ecosystem.

Connected Business Model Types And Frameworks









Attention Merchant Business Model

















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