Platforms are everything on which we create. They are a trade show, a website, a river, a floating city, even a skateboard. Platforms are the base upon which we all business, and what we build to exchange value by creating opportunities for all kinds of interactions. The ability to design a platform that successfully scales value creation for all participants involved is a task fit for architects. To become scalable, the platform must exploit digital angles to offer new benefits to its users. It must create a delivery system that can be reconfigured into different contexts, and do so by creating an innovative business model. Let’s first understand platforms.

1. SCALABLE
PLATFORMS
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2. SCALABLE PLATFORMS

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Platformsare everything on which we create.
They area tradeshow, awebsite, ariver, afloating
city, even askateboard. Platformsarethebase
uponwhich we all business, and what we buildto
exchangevalue bycreating opportunitiesfor all
kinds ofinteractions. The abilityto design a
platformthat successfully scales value creation for
all participants involved is atask fit for architects.
To becomescalable, theplatformmust exploit
digital angles to offer new benefits to its users. It
mustcreate adelivery system that can be
reconfigured intodifferent contexts, anddo so by
creating an innovative business model.
Let’s first understandplatforms.

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ROLES
DIFFERENT ROLES CAN BE DISTINGUISHED ON ANY PLATFORM

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LIQUIDITY There areno two standardplatforms. It is
importantto understandthis, as platforms comein
manydifferent forms, makingthem virtually
impossibletoreplicate. The shared featureofany
platformis that theycreate themeeting point
between interactions and transactions, wherekey
performances aredesigned between consumers.
Every platformdistinguishes two types ofroles:
The first areparticipants:thebuyers interacting
with sellers, informationcreators and consumers,
and communitymembers. Thanks to participants
interchangingtheir roles, digital platformshave
spawned anew class of“prosumers”.
The other role,that of theprovider,architects the
interaction between users bybecoming thearbiter
ofaccess &architect ofrules, whilecreating an
infrastructureof reliable, secureand cost-efficient
access, and strongdataintelligence.

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LIQUIDITY
THE KEY SUCCESS FACTOR

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Liquidityhereis defined as the volumeof usage,
makingthis the key success factor of anyplatform.
Think of it as aparty: theproviderneeds to design
thepartyinto acompelling experience toattract
manyinteresting guests and ensurethey mingle
and have fun.No guests, no party.
At thesametime, positions ofplatformsare
notoriouslyfickle. “Professional” (orheavy) users
mightswitch providers,quicklytaking liquidity
with them. Platformstherefore need a minimum
level ofliquidityto get started. This typically
originates froman “over-the-counter” niche
market.
Consider that liquidityattracts liquidity. It is a
chicken-or-eggconundrum–doyou need users or
providers first?If onlyonetype ofparticipant
groupis present and theother is missing,nothing
will happen. To solve this, platformproviders often
subsidizeoneside.

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VALUE CREATION EXPERIENCE
CREATE AND TRADE VALUE

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All megacities have aplatformbase that provided
its participants, its citizens, thechance to create
and exchangevalue. Acity comprises
marketplaces, new arrivals, and constantupgrades.
The sameinteraction yields different values for
different types ofusers, and newforms of
businesses are developed. In theonlineworld,a
platformlike YouTubeis rich with learning
tutorials,as well as entertaining clips. How they
coexist andwhat theygenerate per user becomes
thevalue oftheplatform.
Anothervalue creation it that contributionto the
platformincreases social status. The Huffington
Post has featured thousands ofarticles without
paying its writers – braggingrightswereenough of
acurrencyto many. Similarly, manyWikipedia
editors contributeto gain professional respect.
The platformsfunction as atransaction point, but
ifparticipants do not capturesufficient value from
their contribution,liquiditydries up.

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HEAVY USERS
THE EXPERIENCES OF THEY WHO MATTER MOST

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The Zephyr Boys redefined skateboardingwhen
they began takingadvantage ofabandoned pools
duringamid-1970sCaliforniadrought.This
ingenuityturned thesportinto somethingentirely
new, taking it all the way tothe Olympics in 2020.
When younger users start shifting to other
platforms, the older,less active generation will
invariably follow.
At thesametime, manydigital platforms havethe
advantage ofan accumulated valuethat is created
throughmanyinteractions and transactions that
arecaptured in thedata. A professional user is less
willing to switch to aplatformthat is moreobscure
and less relevant. Imagineimportingall ofyour
likes, posts, purchases, contacts fromFacebook to
anew platformto get thesamevalue.
Thus, theexperience of yourheavy users matter
most.As the youthstart to migrate, it is worth
asking:what is thenext Facebook?

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ARCHITECT AND ARBITER
THE PLATFORM ITSELF PROVIDES THE BOUNDARIES

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A platformdesigns boundarieswhose rules shape
user behavior. The platformprovider is also the
arbiter that enforces the rules andpunishes
unacceptablebehavior. Clearly stated rulesare a
non-negotiablepart ofyour platform.
The boundariesneed tobe neither strict norloose,
because strictness restricts maneuvering space.
Without amarginon which to operate, participants
have noroomto invent newinteractions and
transactions, killingprogress.Alternatively, leniency
reduces reliability and theeffectiveness ofthe
platform.
Rules also removefriction and encourage
interaction and growth.Gutenberg’s innovative
printingpress famouslyaugmented and expanded
thenumberofwordsavailable from 50thousandto
1 million.Consider, then, howTwitter’s 140-
character rulebegan changingouronlinelanguage
onceit coined thefirst hashtag.

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PROVISION OF INFRASTRUCTURE
THE CRITICAL FUNCTIONALITIES ARE
IDENTIFICATION, CLEARING & FULFILLMENT

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Think of yourinfrastructureas thebridges we
cross. Identification, clearing andfulfillment of
purposeareits critical functionalities, so howdo
you –practitioner– knowthat your counterparty
can betrusted?Or that atransaction is received
and confirmed onboth sides and then followed
upon?
Think about howyou uploadphotosto Flickr or
post aitem for saleon eBay. These are thetools
and technologies needed to createcontent and
shapeinteractions on theplatform. Wetrust that
ourmaterial is safe and protected, in addition
agreeing to terms ofuse.
Infrastructureprovisionis aboutreliable, secure
and-cost efficient access. Mundaneif you do not
get it, but a life missionif you do.Many platforms,
like bridges,do this partwell, butwhat happens
when despite goodintentions very little interaction
is generated? Do notforget a key factor.
ARCHITECT &
ARBITER
THE PLATFORM ITSELF PROVIDES
THE BOUNDARIES

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MARKET MAKERS NEEDED
PLATFORM PROVIDERS ACTIVELY “MAKE” THEIR MARKET

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Platformproviders playan active rolein “making”
their market. They provideincentives to pull
participants to actively engagewith the platform.
They’re shown thebest way to interact
meaningfullyand relevantly.
Think of theuniquevantage pointfirst created by
theHomeShopping Network. The userswere its
most active promoters.Forthefirst time, real
housewives were selling homeproductsto other
housewives. Merging genreformulasand targeting
their nicheaudience, thenetwork was ableto work
with asmaller budget,while providingbig-league
protection toits novices. They offered floor prices,
and aplatformto showcase newproducts.Some
ofits presenters even becameovernight celebrities
that were ableto branchoff into newbusinesses,
and theproductshave spawned countless
innovations. HSN also provided productquality
assurance, with clear returnpolicies if theproduct
was delivered in subparconditions.
ARCHITECT &
ARBITER
THE PLATFORM ITSELF PROVIDES
THE BOUNDARIES
MARKET MAKERS
NEEDED

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MARKET MAKERS NEEDED
PLATFORM PROVIDERS ACTIVELY “MAKE” THEIR MARKET
DATA AS THE OIL IN THE MACHINE
THE OIL THAT KEEPS YOUR ENGINE RUNNING

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A platformspurnslots ofdata, which in turn drives
further valuecreation by feeding them in smart
algorithms,e.g., Amazon’s“users likeyou
bought…”.Datais theoil that keeps yourengine
running.
Datareduces search costs and increases relevance:
finding theperfect contact, informationor deal fit
for you. Matchmaking sites are exclusively data-
specific and have spurnedabrandnew segment of
dating in this digitalera.
Usagedatashows what is most popular,which in
turnattracts moreviewers or rates. Notehow
credibleyour counterpartis an Airbnbtransaction.
Beaware that dataprovision can also betoo much.
Full transparencycan reducetradingmargins or
opportunitycreation to adegree that exchange
becomes impossible, e.g.,lowest priceanywhere for
an e-commercesite.

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STUMBLING BLOCKS

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Creating platformsthat can scale is a challenging
endeavor, and stumblingblocks areabound.
We’ve listed afew that are imperativeto ensuring
that what you’ve builtwon’t crack underpressure.
1. The absenceof asufficiently valuable primary
productorservice. Is your product100%clear?
2. No informaltrading market is forming,and
users arenot organicallysharingor discussing
theneed for yourproduct.Areyou surethat
you’ve tapped into an unspokenneed?
3. Starting too broadinstead ofstarting with
dominatinganicheof heavy special users; not
focusing onniche users.
4. An insufficiently fragmented stream ofsupply
and demand.
DATA AS THE OIL
IN THE MACHINE

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5. Platformshave fixed costs and allowingfor
them to befree is awasted effort. Free liquidity
is tempting when lookingto generate more
users (look at freemium), butacritical mass of
users willing to payis critical. If theplatform has
littlevalue, your introductioncost is typically
very lowand/or free, and growthwill becomea
struggle.
6. Startingwith aclumsy, costlyinfrastructure
platformthat was never designed to handle
largevolumeofusers is acommonpitfall. Here
we gointo software thinking,so you need to
think likean architect that can handlelarge
volume, etc. Invest in the expertise.
7. Donot forget to giveyour heavier users the
incentives needed to continueusingyour
productas it evolves.
DATA AS THE OIL
IN THE MACHINE