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What are the best practices for leveraging key resources in a platform business model?

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A platform business model is a way of creating value by facilitating interactions between two or more groups of users, such as buyers and sellers, producers and consumers, or creators and followers. Think of Airbnb, Uber, or YouTube as examples of successful platform businesses. But how do you leverage your key resources to build and grow a platform business model? Here are some best practices to consider.

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1 Identify your core value proposition

The first step is to define what value you are offering to each side of the platform, and how you are differentiating yourself from the competition. Your value proposition should be clear, compelling, and consistent across your platform. For example, Airbnb offers travelers a variety of accommodation options at lower prices than hotels, and hosts a way to earn extra income by renting out their spaces.

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Affom Birhane

Freelance Product Owner & Business Analyst | Co-Founder @GRANTPILOT
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In platform business models, pinpoint your core value proposition by initially focusing on a specific subset of your target audience. Concentrate on resolving their most significant pain points with a minimal yet capable supplier base. This lean and targeted approach kickstarts momentum and establishes a solid foundation.

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2 Build a network effect

A network effect is when the value of your platform increases as more users join and interact on it. This creates a positive feedback loop that attracts and retains more users, and makes it harder for competitors to enter your market. To build a network effect, you need to focus on increasing the quantity and quality of your users, as well as the frequency and intensity of their interactions. For example, Uber incentivizes drivers and riders to join and use its platform by offering discounts, referrals, ratings, and surge pricing.

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3 Optimize your platform design

Your platform design is how you structure and manage the interactions between your users, and how you capture and distribute value from them. Your platform design should be user-friendly, scalable, and adaptable to changing needs and preferences. You also need to balance the trade-offs between openness and control, standardization and customization, and monetization and growth. For example, YouTube allows creators to upload and monetize their content, but also sets rules and guidelines to ensure quality and compliance.

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4 Leverage your key partners

Your key partners are the external entities that help you create and deliver value to your users, such as suppliers, distributors, service providers, or complementary platforms. You need to establish and maintain strong relationships with your key partners, and align your incentives and goals with theirs. You also need to leverage their resources and capabilities to enhance your platform's value proposition, network effect, and design. For example, Airbnb partners with local hosts, travel agencies, insurance companies, and cleaning services to provide a better experience for its users.

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5 Experiment and learn

The last best practice is to continuously experiment and learn from your platform's performance, user feedback, and market trends. You need to measure and monitor your key metrics, such as user acquisition, retention, engagement, satisfaction, and revenue. You also need to test and validate your assumptions, hypotheses, and ideas, and iterate and improve your platform accordingly. For example, Uber experiments with new features, services, and markets to expand its platform's scope and reach.

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ron mcintyre

President/CEO at IPS Inc.
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I have great innovations that have received strong support in both the VC and PE markets. However, I have not been able to explain in less than 3,000 characters, therefore, I cannot add my comments. Do you have any suggestions. Ron McIntyre, Strength and Honor

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6 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?

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Alan Miller

Ignite Success @ Miller Impact Consulting | Elevate Your Game
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The success of such a business model depends on how well the platform can leverage its key resources to create value for its users. Here are some best practices for leveraging key resources in a platform business model: Focus on user experience: A platform business model is all about creating a seamless user experience. Leverage data: A platform generates a lot of data, which can be used to provide valuable insights into user behavior and preferences. Use this data to improve your platform and to create targeted marketing campaigns that will attract more users. Create value for all stakeholders: A platform business model should create value for all stakeholders, including users, partners, and investors.

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Sheetal Bansal

HBR - Advisory Board | Mentor @ Nasscom & Startup India | 2x Intrapreneur | 1 Exit | Strategy & Transformation Leader | SaaS & AI Product Innovator | Investor | Driving ROI, Growth & Value Creation for Business Leaders!
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Create a win-win situation for all stakeholders involved. This can be achieved by fostering a culture of collaboration and providing a seamless user experience. By doing so, businesses can unlock the full potential of their platform and drive growth in a sustainable manner.

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What are the best practices for leveraging key resources in a platform business model?

1

2

3

4

5

6

1 Identify your core value proposition

2 Build a network effect

3 Optimize your platform design

4 Leverage your key partners

5 Experiment and learn

6 Here’s what else to consider

Entrepreneurship

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What are the best practices for leveraging key resources in a platform business model?

1

2

3

4

5

6

1 Identify your core value proposition

2 Build a network effect

3 Optimize your platform design

4 Leverage your key partners

5 Experiment and learn

6 Here’s what else to consider

Entrepreneurship

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