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

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.

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.

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.

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?