In this post you’ll find the draft release of the new version of the Platform Design Toolkit plus an introduction gathering fundamental insights, links and references on Platforms and Ecosystems. If you are familiar with the topic you may just want to jump to the Platform Design Toolkit 2.0 Draft release: in this case, just use the following links to the key sections of this update. Please remember that the PDT 2.0 is looking for your comments.
- Why are Platforms so important today (and so is Platform Design)
- Modeling Platforms with the Platform Design Toolkit
- Go directly to see the content of the Platform Design Toolkit 2.0 (draft) explained or download everything from here http://bit.ly/PDT20DraftDowload
UPDATE: Please note we also added further reflections and an additional Canvas here.
A premise: the story of Platform Design Toolkit from 2013 to today
The first time I started thinking about developing a Toolkit to help platform designer it was in 2013: I was frustrated with using the Business Model Canvas, a tool that – in my opinion – was designed and optimized for an old way of doing businesses: a linear way, that of the industrial mode of production.
The BM Canvas indeed implied a “linear” perspective where the business owner creates the value proposition and provides this it to the market, targeting one or many customer segments‘s appreciation. Already that time, a growing understanding – even in 2013 – was pointing out to how successful companies increasingly started to operate as hubs, developing the ability to “organize” skills, resources and inventories and, by doing so, redesign entire markets from scratch, with impressive results.
The insights we started having in 2013 have been strongly confirmed by many studies – for example Deloitte and OpenMatters “Value Shift” research or Pentagrowth report – and, more importantly, by strong and clear signals coming from a market evidence: the success of those that we now call “networked businesses” or, more frequently, “platforms”, somehow exchanging the tool for the firm or entity that creates it.
After the Platform Design Canvas was presented at Barcelona Design Week in 2013, I had the chance to collect great feedback in a relatively short period and – combined with further reflections on the model – I had the chance to release a sudden minimal but important update in the same year. That updated version (the 0.2) main improvement – beyond slightly reorganizing the Platform Design Canvas was the introduction of Motivation Matrix, a tool – inspired by some existing Service Design experience – that helps to look into the motivations existing inside your system of entities that you wish to make collaborate thanks to and through the platform.
After almost two years of personal use of the kit (in private and public sector, startup and corporate contexts, strategic consulting projects, presentation at conferences, public workshops)and, even more importantly, after two years of receiving independent PDT adopters feedback, I felt it was really time to take the framework back to a research phase for a while. Reading blogs, books and talking long with some of the most brilliant thought leaders in digital transformation and collaborative economy, I collected powerful insights and I put all this knowledge and effort back on the PDT to make it a more powerful and resilient tool with this new version.
The main changes you’ll find in this (2.0) version on the Platform Design Toolkit can be easily listed:
- a revision of the type and set of key ecosystem entities you need to model (now including Partners besides Platform Owners, Peers and external Stakeholders)
- a bigger set of canvases (now four instead of two)
- a broader integration of aspects that go beyond the value production, such as evaluating externalities, platform governance and platform innovation
- the possibility to interwork more easily with the Pentagrowth Framework developed by Javi Creus at Ideas for Change
he whole idea behind this 2.0 update is to share with you a tool that helps you design far reaching platforms and more resilient ones – and also to help you rethink some of the key functionings of platforms by understanding the overarching model and being able to envision how the Platform model can be innovated and redefined.
Why are Platforms so important today?
But let’s take a short step back: why is Platform Design such a key skill at today?
Creating a so-called platform to access and leverage the potential of an ecosystem is increasingly recognized as the most powerful way to achieve market success: leveraging on ecosystems through platforms simply shown the ability to reach objectives that go beyond what could be possibly achieved by a traditional strategy operating in a controlled, internal, company owned environment.
As already pointed out, a few key research studies measured the superior nature of what we call “networked businesses”. The already introduced Value Shift study from Deloitte and OpenMatters analyzed the evolution of business models in history and characterized them as follows:
Four business models have been used in history (according to the study)
- Asset Builders: build, develop, and lease physical assets
- Service Providers: provide services to customers in form of billable hours
- Technology Creators: develop and sell intellectual property
- Network Orchestrators: create a network of entities in which the participants interact and build a shared value creation process
The study also pointed out that the business models of Network Orchestrators achieved notably better results than others and looked like an ultimate “evolution”:
“Our analysis indicates that as of 2013, Network Orchestrators receive valuations two to four times higher, on average, than companies with the other business models. Further, trend data over the past decade indicates that this valuation gap is widening over time. We call this degree to which a business model drives the gap between revenues and valuation “the multiplier effect””
The importance of having a Shaping Strategy
According to John Hagel of Deloitte Center for the Edge the most advanced and ambitious firms can now leverage on a new, “exciting potential”. This potential relies on the ability to completely transform how a marketplace operates and capture an incredible amount of value by doing so.
“Today, there are a growing number of opportunities to restructure entire markets and industries by designing new platforms and offering powerful incentives to motivate third parties to participate on them. These are very effective because they mobilize investment by a broad range of other participants rather than requiring the shaper to put all its own money on the table.”
As Hagel explains very well in this passage and in the related post, the nature of continuous transformation in technology and markets, brings up enormous opportunities for “aware” firms and teams. Those firms can now identify fragmented (or even not yet properly existing) markets and design powerful incentive strategies – embodied by a combination of a digital platform and elements of incentive design – that can help them leverage the potential of complex ecosystems of interaction between third parties. These third parties can gain incredible advantages and value by joining the ecosystem and therefore let platform owners (shapers) benefit from extracting a fraction of it.
Ecosystems therefore enable the participation of large and small organizations (or individuals) in creating value at a scale beyond the possibilities of a single firm. In these ecosystems participants co-create and interact in a way which would be impossible to manage in a traditional top down (industrial) manner. As a result of this massive collaboration effort and value creation, participants (including so called customers) are bonded by a shared interest and purpose and they protect and contribute to the ecosystem as a “commons” that enables them.
Platforms ultimately help ecosystems reach new potential and create the conditions for the rise of a community of entities that are well motivated to defend them.
The changing nature of the Firm
The success of this new breed of businesses recreated interest about the debate on the nature of the firm. Even thought leader and web superstar Tim O’Reilly to organize a dedicated conference and – few months ago – published an highly debated oped that sparked – some serious discussion – called “Networks and the Nature of the Firm“ in which he praises the emergence of the networked model of business as an “evolution of franchise”:
“In many ways, [platforms like] Uber and Airbnb represent a 21st century update of the franchising model. In franchising, the parent company brands and markets the product, sets standards for producing it, and charges a licensing fee and receives a percentage of revenue from each of its franchisees. The difference is that technology radically lowers the barriers to being a franchisee. In many ways, you can call the modern trend ‘the franchise of one.'”
The shrinking of coordination-transaction costs (essentially due to several technology shifts that improved or communication systems) is often pointed out as THE enabler of the evolution of the firm into what we now call Platforms/Network. While this is essentially true, we need to understand that not all industries and not all contexts in the same industry are subject to the same level of falling coordination cost and that therefore a coexistence of decentralization and centralization trends is to be expected in the digital marketplace. In a must read commentary of Tim O’Reilly’s post, Albert Wenger pointed out that networks (basically the way he calls platform enabled ecosystems) are to thrive in contexts where a tradeoff between the need for coordination (convincing entities to work in a process oriented fashion) and the need for motivation (competing for who’s the best around) is needed:
“If a market, or strategy within a market, calls for extreme coordination, the firm model (ed: the industrial firm model) will outperform the network (ed: the platform model). For instance, to create the perfect consumer experience for a smartphone Apple has integrated vertically backwards all the way to making its own chips. Conversely if motivation is of the essence the market model will outperform a network.“
In the end then while sometimes networks can achieve an even almost completely decentralized model of functioning – like in the Bitcoin/Blockchain ecosystem – most of the times the firm (or brand) still play a decisive “platform” role in organizing part of the production and designing an architecture of exchanges, incentives and experiences that – by leveraging the collaboration of peers (citizens) and partners (generally small, agile, professionalized players) can strongly redesign or reinvent markets.
The Trends that enabled the explosion of Platforms
But what are the “drivers” of the rise of the network/platform model? The transition towards a networked model of production, has been driven by the collision of several micro-trends and – more in general – from the collision of two mega set of trends: a technology driven disruption on one hand and social changes (meaning at both societal and user level) on the other.
From a technology standpoint we can identify at least the following macro set of impactive trends (something that I call “What is now Technically Possible”):
- the rise of pervasive computing and pervasive internet access through mobile
- utility like (Pay As You Go) consumption patterns for technological infrastructures (public clouds, public storage, bandwidth)
- Widespread availability of Free and Open Source Software
- Modular, open and cheap hardware and the evolution of manufacturing supply chains
- Proliferation of Data and falling cost of data storage
Furthermore, from a social and user driven perspectives, the key drivers can be at least partially identified as follows (“What Users Value and Want now”):
- a rise of the social need for a collaborative, shared and efficient use of resources
- the growth of cities and, therefore, of urban and asset light lifestyles
- a rise of environmental and social awareness and a search for sustainable products and services
- growing importance of experiences over products as a result of omni-channel access
- the demand for cheap and accessible access instead of ownership
The collision of these two mega-drivers can help us identify what is the market currently asking to companies facing the digital marketplace today: techno enabled, conscious, users are pushing for products and service that are essentially:
- Designed in a human centric fashion with design mediating the increasing tech complexity to ease access (HUMAN)
- Strongly powered by data analytics to help identify what is relevant to the user (RELEVANT)
- Providing on-demand, localized and fast access to product & services (FAST)
- Providing an ultra personalized experience which can be customized by the user and thanks to her social sphere of influence (PERSONALIZED)
Additionally two more enablers collided with this set of new demands: the diminishing transaction cost due to mature communication tools and the rise of a producer attitude in the user, due to the democratization of access to digital tools of production. This further collision made the transition complete and generated the strong need for a real change in attitude in firms; this new breed of firm is one that:
- is radically more agile and able to experiment to discover how value can unlocked from existing or nonexistent markets
- is e able to create new markets by hacking growth and overcome chicken-egg problems by leveraging network effects that can help concentrate demand and supply to almost monopolistic level (in different niches, small and big)
- can work according to both: economies of scope and (not just) economies of scale
But at the end of the day, what is a platform exactly?
There’s no shared definition of what a Platform is so I’ll share with you here some tentative definition, from thought leaders, with the aim of exctracting some common sense that can be based on the reflections we just made. One particularly straightforward definition of platform from Sangeet Choudary of Platformed.info is:
“a business model that allows multiple sides (producers and consumers) to interact with each other by providing an infrastructure that connects them, on top of which they can build and exchange value, and governs the market that coalesces on top of it by determining which interactions are desirable and which ones are undesirable.“
Another particularly interesting definition – that relies on the “components” – is that made by John Hagel. According to him, a Platform is essentially made of:
- “a governance structure – including a set of protocols that determines who can participate, what roles they might play, how they might interact, and how disputes get resolved.!
- An additional set of protocols or standards – [that] is typically designed to facilitate connection, coordination, and collaboration.
And, always according to Hagel, such composed platforms are to be classified in four macro types:
- Aggregation Platforms – focused on simple transactions, connecting users to resources mostly in Hub and Spoke – middleman/gatekeeper – fashion (Eg: Apple, Airbnb)
- Social Platforms – focused on social interactions, connecting individuals to communities, tend to foster mesh relationship networking (Eg: Facebook)
- Mobilization Platforms – helping people to “act together”, fostering long term relationships (Eg: Linux, Li & Fung)
- Learning Platforms: facilitate learning, bring participants together to share insights, foster deep/trust based relationships, help participants realize more together and hone their capabilities (Eg: World of Warcraft)
In Hagel’s thinking, Learning platforms should be really considered the “final evolution” of platforms and elements of “learning” should be present in any platform type. According to Hagel, learning is key in a world of continuous disruption and performance pressure: in such a world, participants continuously look for opportunities to hone their capabilities and improve their performance, an activity for which learning processes are essential.
In the already mentioned blog post, Tim O’Reilly offers his interpretation of what a “platform” business should actually do and therefore can help us somehow to understand what a platform is supposed to be, by means of its objectives. According to O’Reilly a Platform should:
- Lower transaction cost to drive evolution in markets: platforms designers should focus on lowering barriers to entry for suppliers and customers
- Look for fragmented markets as an opportunity to seek for efficiencies (eg: taxi industry was highly fragmented locally).
- Pass on to the customer the savings introduced by efficiencies (lowering barriers to use of the service)
- Innovate pricing thanks to marketplace mechanism and data
- build mechanisms that support suppliers of all size
- invest in creating mechanism that bring the best to the top such as e reputation, search, etc…
- invest in mechanisms for empowerment, augmenting workers potential
Modeling Platforms with the Platform Design Toolkit
After having introduced the complexity behind the theory of platforms we’re now going into a consciously reductionist model that has been designed to help us understand and shape the complex interactions that happen in such a system. As I always say: it’s not important how perfect the Platform Design Toolkit model is, the important thing is wrapping your head around the motivations, interactions and possibilities that an ecosystem opens and try your way to shape them to create your impact opportunity.
What are the key entities/players/roles in a ecosystem-platform?
Around the functional role of the platform as-a-tool used by firms to access ecosystems, we can now identify four key entity types:
1. The Platform Owners
This category refers to the “owners” of the Platform: ultimately this set of players owns the vision behind the realization of the market, and is ultimately responsible to ensure that the platform exists in production.
Typically: Startups/Scale-ups …then corporate firms, shaping firms; nothing prevents this to be a non-profit organization, a foundation or a cooperative. In, still rare, cases peers can also be somehow owners of the platform – such as in the Bitcoin Blockchain ecosystem, where peers collaboratively, effectively own the infrastructure that makes the platform.
Examples: Airbnb, Apple (re the Apple app store ecosystem), Google (re the Android ecosystem for example), the Bitcoin miners network, Tripadvisor, WordPress (the firm), etc…
Are the entities that have a specific interest in platform success or failure, in controlling platform externalities and outcomes, in regulating it or in exercising rights in the platform governance.
Typically: public actors or bodies dealing with regulation and control of platforms on a local basis, representatives of communities of peers and partners involved in the value creation, pre-existing institutions.
Examples: A municipality affected by the gentrification effects of short time rentals, the government, a holding group, a pre-existing incumbent, a pre-existing network or association of professionals interested in joining the platform.
3. Peers (Peer Segments)
Peers can be usually re-segmented in two major group of entities:
– Consuming Peer (CP, users): these are entities – most of the times individuals but can also be small/medium business and single representatives or teams in bigger organizations – interested in consuming, utilizing, accessing the value that the is created through and on the platform. Eventually they may evolve into producing peers, when they realize that beyond fulfilling a need they can seek evolution opportunities.
– Producing Peers (PP, citizen producers, prosumers, providers….): these are entities – most of the times individuals – interested in providing value on the supply side of the ecosystem/marketplace, usually seeking for opportunities to improve their professionality and honing their capabilities towards a better performance
Examples: The Airbnb hosts (PP), the Airbnb travelers (CP), WordPress bloggers (CP), Salesforce customers (CP), AngelList Angels (CP), AngelList Startups (PP), Houzz users (CP)
Partners are essentially professional entities – individuals and small/medium enterprises, most of the times – that seek to create additional professional value and to collaborate with platform owners at a stronger stage of relationship. Typically, partners are professional value creators that tend to specialize in a niche or advanced/premium product/service and become better and better within time. Partners sometimes also facilitate, cater, enhance the value production by acting as broker, facilitators, connectors.
Examples: Airbnb Superhosts, WordPress theme developers, Apple or Android developers, Salesforce Forge developers, AngelList syndication SuperAngels, WordPress Cloud service providers, Houzz professionals
Other Key concepts in Platform Design
Apart from the set of entities that participate to the platform enabled value creation process, to fully understand the complexity of a platform system we need to introduce a few more core concepts:
Infrastructure and core components
Infrastructure and core components are controlled and owned by the platform owners and governed according to the platform governance. Typically we talk about digital and physical assets, tangible components, that ensure the platform works and is usable by the ecosystem: these components need effort and energy to be run smoothly and in coordination. The activity of running the infrastructure and core components is one of the three Key Platform Value Production activities (see below).
Examples of infrastructure and core components can be a digital web based platform (eg: the wordpress.org website, Airbnb website, the Apple SDK, etc…), a mobile application (eg: the Uber app), a piece of standardized hardware (eg: the production or Arduino boards).
External components (Bricks/APIS)
External components can be used to build and reinforce the value propositions of any given platform. Most of the times these components are available in PAYG (Pay As You Go) mode (or in general as a utility) and are easily integrated with the platform workflow. A key example is the Uber API that has been easily integrated in many other platforms such as Tripadvisor but also meteorological data, booking APIs, traffic information APIs, location APIs, payment APIs, etc…
The platform itself can offer utility like APIs and bricks to other players (see below).
Channels (as evolution of Contexts)
Every relationships is born in a context and transactions happen better thanks to controlled and designed contexts that evolve into what we call channels. A context is defined more broadly than a channel and the latter can be often considered an evolution of the first. A refined and optimized channel should be available to make transactions easier. When complex transactions are broken into several sub-transactions a channel must exist for every phase to happen smoothly.
Example of contexts and channels include: the airbnb storefront and booking feature (for the booking sub-transaction), the recommendation engine and recommendation flow that happens in most of the multi-sided marketplaces, the Arduino forums (for knowledge and kudos exchange transactions)…
Key Platform Value Generation Activities
In a platform enabled ecosystem, three key activity layers that generate most of the value:
1. Maintaining & Producing the Infrastructure
Running the infrastructure the platform ultimately relies on to work is clearly one of the key activities since it enables the value creation process to happen entirely. The platform is usually run by the owners but novel approaches see also peers (or partners) being involved in this core activities. As an example, in Bitcoin Blockchain ecosystem (and the likes) the platform is essentially run in a distributed way across Peers (or Partners, depending on how we consider miners).
2. Core Value Proposition
The core value proposition is the primary value that the platform seeks to create for its core target (indeed, the target of the Core Value Proposition). Most of the times, in platforms and ecosystem that include Peer Consumers this is the peer segment ultimately being the target of the core value proposition. In many occasions a – even if the ecosystem includes peer consumers – ultimately the Core Value Proposition may be directed to Partners serving the peer consumer base.
Examples: have a great local travel experience (Airbnb, peer consumer is the target), give visibility to the best restaurants, hotels and attractions (Tripadvisor, partner is the target), help bloggers to create great blogs (WordPress, peer producer is the target), expand smartphone use cases through specific applications (Apple, Android, peer consumer is the target), etc…
3. Ancillary Value Proposition
The ancillary value proposition is a secondary value that the platform seeks to enable. This is usually targeted to the same target segment of the Core Value proposition but can also be targeted to a different one. For example Airbnb is now experimenting with a “for business” offering that is targeted to a slightly different peer segment (travel offices for companies/business travelers); in the same way, the ancillary value proposition of the WordPress ecosystem and platform is to provide professional designers and developers tools to create functional, customizable and secure web solutions.
Every platform needs to evolve and be governed therefore is subjected to two key “steering” activities that shape its evolution.
1.Design and Evolution of the Platform
This activity is key to enable a platform that is able to evolve and adapt to changing conditions and to cope with changing demands in the ecosystem . Example of such activities is the evolution of a platform design (eg: improving software code base), improving security of data, designing policies and strategies for reputation management, designing the overall user-journey, etc…
This activity is typically carried on in line with the founders inspiring vision and the capability to design experiences through the platform has been key in ensuring platform success.
2.Governance of the platform
Governance of the platform relates with complex decision affecting the internal and external of ecosystem scope and entity. Examples of such activity relates with conflict resolution with stakeholder, key decisions in ownership, value distribution, policing, etc…
The core concept of transaction and value related to the “Platform”
As platforms are ways to organize interactions and ultimately transactions among an ecosystem, how should we ultimately define a transaction? Our proposed definition of a transaction is as a sub-action (part of a more complex “experience”) during which value – in different forms – is either created, provided, transferred or traded among two (most often) or more entities.
- Typically pertains to two parties
- Value is consumed (as in utilities) or exchanged (as in exchanges) or delivered (as in services) in whatever form: monetary value, reputation, experience, use value, curation, knowledge, information, energy, kudos, etc…
- Value can be tangibly identified and most of the time it can be measured – though not precisely (intangibles)
A rough definition of different transaction types that can happen on a platform is the following:
- Utilities: providing a third party (that can also be and often is another platform) with componentized information and access to the whole system of services and exchanges happening in the ecosystem, through a packetized and/or programmable interface (eg: APIs).
- Services: provided by the platform as “organized services” (by organising components, infrastructures, resources to provide a common service) directly to Partners and Peers in one-to-many pattern. These services can typically consist in two types:
- Empowering and enabling services that are targeted to helping producing entities (peer producers and partners) improving their capabilities. Examples of empowering and enabling services can vary from: organizing an event to gather the whole ecosystem – eg: a developer conference – to sending a professional photographer at new entrants airbnb’s hosts home to improve the appeal of new profiles and ease onboarding
- more classical industrialized services can be provided to peer consumers as complementary of the experiences provided by the ecosystem through the platform. Example of complementary services are the Airbnb for business proposition (where the company provides business travel agents and expense reporting) or the hosting solutions provided by WordPress.com to bloggers.
- Exchanges: these transactions happen between two entities in the ecosystem and consist of exchanging or transferring ownership of a currency or other stores of value (assets, money, token, credits), providing elements of intangible value (such as reputation, trust, kudos, likes, etc…), providing labour/work or enabling access to resources.
Context where the PDT can be used
The platform design toolkit has been designed with the aim of facilitating the work of those involved in designing or (better) co-designing a Platform. To help you in doing this, the PDT can mainly be used in two different context.
- Modeling an existing platform: of course the PDT can be used to model and describe how an an existing platform works and therefore to gain significant insights on its functioning – and, for example, strong, winning points – or, perhaps, on it’s problems. This activity can be IMO carried on in substantially two circumstances: analyzing an existing platform you own – as a designer – and you want to fix, improve, modify or analyzing an existing platform you admire and you want to be inspired from by understanding more of how it works.
- Designing a platform from scratch, around an ecosystem (a problem, topic, company, geographical area, mission, etc…): another pretty common use of PDT is that of using the set of tools to envision (and preliminary design) a platform around an existing opportunity. In my previous experience I’ve seen the PDT being used to “build” a platform vision around an existing corporate business or startup or – in other occasions – around an existing emerging market of offers and needs, more in general, around an intuition that a value proposition might answer to existing needs.
Despite the speculation about platforms may be wide – as also the references in the earlier part of this document show – platform design boils down to essentially:
- understanding what are the key entities in the ecosystem
- understanding how the core value is created and how ancillary value streams are potentially generated (who’s creating value and how this value is transferred to the ultimate value consumer)
- understanding what are the key transactions making up the more or less complex flow of work and ensure that context or (better) well formed channels exist for this transactions to happen flawlessly
- understanding what are the key components of the platform
and last but, probably, most importantly:
- understanding how the platform owners can support and empower the evolution of participants toward better performances, how to hone their capabilities to help them thrive and therefore produce better quality and the creation of a larger social capital and reputation.
All this with avoid ripping or pissing off the participant in the ecosystems.
What’s inside the Platform Design Toolkit 2.0 and how to use it
This new version of the PDT includes a review of the existing tools (the Platform Design Canvas and The Motivation Matrix, now Ecosystem’s Motivation Matrix) plus the formulation of three new complementary tools: the Ecosystem Canvas ap, the PPP aka Transaction Matrix and the Platform Schema.
Each of these tools has a specific value and mission and together they make a library of tools that you can decide how to use best: each of the canvases can be used alone or in combination with other tools (inside and outside PDT).
In the following lines you’ll find each of these tools presented in details about their use – each canvas also contains brief embedded instructions – in a potential order of use in the case of Modeling an existing platform. For the sake of clarity – we will provide an easy to understand example such as that of the well recognized and discussed global company that disrupted the hospitality industry: Airbnb.
Detailed guidelines about how to use the toolkit in Designing a platform from scratch, around an ecosystem will follow in the next days and weeks and on the dedicated website where we’re about to officially launch the final 2.0 version, after a period during which this draft will be Open For Comments (stay tuned and register on www.platformdesigntoolkit.com)
Please note, all the Link for Comments you find, will link you to a drive hosted file version that you can freely duplicate and fork. Please respect the CC-BY-SA 4.0 license.
>Essential Canvases <
The three following canvases are essential, meaning that they will help you analyze the most important traits of your platform of choice.
The Ecosystem Canvas
Main use: map and identify stakeholders, peers & partners, external components.
Link for leaving public comments on Gdrive files: https://goo.gl/AKDJJK
Download all canvases from: http://bit.ly/PDT20DraftDowload
Description: This canvas can be used to map all actors in an ecosystem. Most of the times we populate the map by doing a brainstorming first (you can use brainstorming-metaplan to enumerate entities) and then putting the actors in the map. If the actors in the upper right side are too many usually we prioritize the larger groups. Entities enumerated can be prioritized, by means distributing them across a four quadrant schema, according to the approach described in the Stakeholder Mapping that you can find on the Go Gamestorm portal: we usually map entities according to potential impact for platform success, and according to the level of attraction they have, or may have, in using the platform and end with a set of maximum five entities globally (peer consumers, peer producers, partners).
One thing I learnt is that prioritization of entities really deals with the initiative culture and is therefore an important choice that may need some consensus beyond collaborative prioritization.
The Airbnb case study example:
As anticipated, as an example platform we use Airbnb: in the case of the Airbnb ecosystem we can then map four entities beyond Airbnb owners: guests, hosts, superhosts and companies (for business travel). Of course we mapped City Councils as stakeholders (the discussion about Airbnb impact on local gov. stakeholders is years long).
Note that the main difference when modeling an existing platform instead of designing a platform from scratch lies in the freedom to chose entities: of course when is you designing a platform – at the very start – you’ll identify entity segments, prioritize them and you’ll later on attach “roles” on them. To explain it very briefly: if you were designing airbnb you may have identified “home/hospitality providers” and then segmented it in hosts and superhosts.
The Ecosystem’s Motivation Matrix
Main use: to understand better the motivations that all entities have to participate to the ecosystem value creation plus what they can give to each other.
Link for leaving public comments on Gdrive files: https://goo.gl/0NxHd5
Download all canvases from: http://bit.ly/PDT20DraftDowload
Description: the Ecosystem’s Motivation matrix is used to dig deep into the motivation that push entities in the ecosystem to participate. The darker area on the diagonal of the matrix is used to take note of the main advantages in participating in the the ecosystem through the platform (namely, needs they can meet, opportunities they can find and such positive outcomes). On the other cells, you need to annotate what the entity on the axis on the left can “give to” the entity on the upper axis. In the case of the cell indicated by the arrow of the explanatory box in the canvas, you’ll need to annotate what Entity on the 5th lane “gives to” the entity on the fourth column (and lane). A clear example of a traditional, service design related, motivation matrix can be seen here at Service Design Tools.
The Airbnb case study example:
As you can see from the picture below we took the assumption that – on Airbnb’s platform – Superhost are involved in producing the for business proposition dedicated to companies. Companies themselves are considered as “peers” despite they’re no “human” entities, they can be considered as single entities accessing the system as consumers (eg: representatives of travel offices).
The Platform Design Canvas
Main use: to rapidly map the overall platform’s dynamics, important resources and enabling and empowering potential – will help to understand if the platform is doing its job of sustaining the ecosystem in value production.
Link for leaving public comments on Gdrive files: https://goo.gl/NMlQcc
Link for leaving public comments on Gdrive files (no instructions version): https://goo.gl/H5kbJO
Download all canvases from: http://bit.ly/PDT20DraftDowload
Description: the new Platform Design Canvas is much different from the older version. The small letter in the boxes give the user a potential priority in doing the canvas mapping but they should be considered just as “indications”.
Typically you’ll arrive to the canvas after having done the Ecosystem mapping and therefore you should have a clear idea of what are the entities in the most external parts of the canvas: Platform owners, Stakeholders, Partners, Peer producers and Peer consumers. Please note that it’s always important to focus on the “roles” these segments will play on the platform: as an example, on Airbnb platform we should keep track of Hosts as peer producers and Travelers as peer consumers while both might be considered part of the same “citizens” segment. After having identified the main entities involved it will be useful to focus on the Core Value Proposition of the platform and to point out who’s the target of the CVP (we may call it the core target).
The Airbnb case study example:
Despite being fairly simple – simplicity is probably one of the key drivers of Airbnb success – The Platform Design Canvas for Airbnb shows a few key insights: first and foremost the Core and Ancillary value proposition complement each other nicely in terms of segments and are targeting both consuming and producing peers (also to ensure demand and supply grow both). Furthermore is very nice and clear to see that there’s a natural “evolutionary” path for ecosystem participants that allows and helps them evolving from guests (peer consumers) to hosts (peer producer) and then superhosts (partners) and that the platform always have the right support service for this evolution to happen. Is indeed very interesting to see how Airbnb makes it very easy for people to get onboard (sending a photographer for free to take nice picture of your listing) and then it focuses on perks and coaching to bring hosts to superhost level (basically getting to achieve a standardized level of performance) to finally bring all its best hosts to an open gathering – the Airbnb open conference happening in Paris – to share insight and build more community belonging.
UPDATE: This evolutionary path (consumer-producer-partner) is key for platforms and have been the subject of a deeper analysis – where we also presented an additional canvas – you can find here. As we said already, the learning platforms is the ultimate incarnation of the platform success and therefore helping its participants to become better hosts by learning more about experiences is a key success point for Airbnb.
>Advanced Canvases <
The following canvases are not essential but advanced, meaning that they will help you analyze the deepest traits of your platform of choice, ranging from detailed analysis of all transactions up to the governance and evolution processes.
The Transaction Matrix (PPP)
Main use: to understand better and dig up the the details of the transactions happening in the ecosystem.
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Description: The transaction matrix is useful to extend the preliminary analysis on transactions (utilities. exchanges, services) that are identified in the Platform Design Canvas. The use of the transaction matrix is not mandatory but it is of great help in identifying the key elements of each transaction that happens in the ecosystem. The matrix can be easily read by seeing all the value production entities in the ecosystem (the platform, the partner and the peer producer) and all the entities capable of receiving value in the left column (other platforms, partners and peers of all type): the arrow indicates that you need to red the matrix by considering what kind of transaction might happen between a value production entity and a value receiving entity. The first quadrant on the upper left corner is therefore dedicated to list all the transactions that may happen between platforms: that typically happens through programmable interfaces (eg: APIs) – eg: Tripadvisor using Uber APIs.
The quadrants holding the light blue sign contains the transactions happening between the platform and the entities in the ecosystem: this “services” can be enabling (partners) and empowering (peer producers) but might also be a set of “consumer” oriented services like classical ancillary services that may help complement the Core Value Proposition (and therefore making up the Ancillary one) towards consuming entities or users.
Finally the quadrants holding the green sign are related to “exchanges” that happen in a true peer to peer fashion – outside the industrialized control of the firm and by the participation of the peers: the essence of networked model of production and the soul of the platform in the majority of the cases. These exchanges typically make up the core value proposition of the platform. Obviously you can have many exchanges in a platform also between producing entities that may collaborate beyond competition – but it’s more typical to see producer-to-consumer exchanges (Partner or Peer Producer to Peer Consumer).
More in details the notation proposed for tracking the transaction details is:
- T – the transaction name
- V – the value exchanged
- C – the channel (or context) through which the transaction happens
The Airbnb case study example:
The PPP Transaction Matrix for Airbnb helps us understand more of the real “transaction” happening in the system. In particular the first insight we can spot is that all transactions involving exchanging money (booking and paying) are monetized in real time – on both sides – by Airbnb while the whole set of “empowering and enabling” services (Platform to Peer Producers and Partners) are all given out for free (there’s no registration fee) and are complemented with a relatively strong offer of channels and contexts where you can learn how to become better hosts.
The last substantially important currency that is shared on the platform is reputation: critical to platforms success – as Tim O’Reilly says Platforms need to help the best emerge – reputation makes, together with money and knowledge on how to become a better host, the whole set of the value currencies exchanged and provided on the Airbnb platform.
The Platform Schema
Main use: to identify who’s to produce the “Core Value Proposition” and the other Value Generation Activities and how such activities impact on external stakeholders and to complement this by thinking how the different entities should be involved in platform steering activities.
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Download all canvases from: http://bit.ly/PDT20DraftDowload
Description: the platform schema is the final and most holistic of the tools in the Platform Design Toolkit. The schema helps the platform designer or analyst to understand what is the entity group (or the groups given that more than one can be involved) that produces the Core Value Proposition and the other Value Generation Activities or, more in general, how this entity is involved in the value generation process. Also it gives you the hint of thinking how such activities impact by generating externalities on stakeholders. After having carried on the first part of the analysis the designer will be more apt to determine if, how and when the entities in the ecosystem should be involved or not in the two key steering activities such as the governance of the platform and the evolution of the design of the same.
The Airbnb case study example:
The application of the platform schema to the Airbnb case also brings some interesting reflections up for further thinking: in particular it’s clear from the schema how the platform mainly plays a facilitation and orchestration role in value generation activities while has a strong control on governance and experience design. Another interesting bit of information is related to understanding how impacted stakeholders (city councils) are being involved by Airbnb on the regulation and integration of the platform with local regulations and laws with its Occupancy Tax Collection and Remittance feature, active in some markets.
UPDATE: Please note we also added further reflections and an additional Canvas here.
An executive summary of this post is available as a presentation on SlideShare:
Thanks for reading this post, please remember that this work currently open for comments and you can click on each link below the canvases to access a GDrive instance that you can directly comment. If you feel like giving a short feedback through this 3 minute survey your support is really appreciated!
If you’re building a Platform, or you’re just interested in the official launch of Platform Design Toolkit 2.0 and the related offering of strategic advisory and co-creative workshops please register here: www.platformdesigntoolkit.com
A Special Thanks for this Draft Release must go to: Javi Creus and Ideas for Change for the amazing work on Pentagrowth, OuiShare and Cocoon Projects (especially Stelio Verzera for the amazing feedback) for having adopted the PDT framework in various ways, Eugenio Battaglia for the support to the PDT 2.0 release, Jordi Llonch Esteve and the award winning Sharing Academy for the enthusiastic adoption and the valuable feedback plus all the other early adopters and especially to OSVehicle, RuralHub and ADEO Group among others. Thanks also to all the workshop participants that gave me such a great support in rethinking the model.