Microsoft, Amazon, Apple and Facebook get much of their value through the use of Multisided Platforms (MSPs).
MIT Sloan define a multisided platform as “technologies, products or services that create value primarily by enabling direct interactions between two or more customer or participant groups.” For example:
- Apple connects app developers with iPhone users who have a need for the functionality that the app provides.
- LinkedIn connects professionals, recruiters, and advertisers.
- Microsoft uses Windows to connect users, third party app developers, and third party hardware manufacturers
- Amazon and Alibaba connect sellers of products with a vast set of users that want to buy products.
- AirBnB connects building owners with people needing to rent space.
- Uber and Lyft connect drivers and passengers.
- American Express, Visa, Paypal, and Square connect merchants to consumers.
MSPs are a very valuable and viable business model that creates value by reducing search or transaction costs for all participants.
Is your business leaving money on the table by not leveraging an MSP approach? Or, worse yet, are you leaving your business vulnerable to competition who have determined a unique MSP offering that threatens your existence?
What can you do to leverage the MSP strategy and how can you implement it in your business?
Four MSP Strategies That Can Reveal Hidden Value
HBR recently published “Finding the Platform in Your Product.” This article provided four strategies that may reveal MSP value in your business.
- Open the Door to Third Parties – Leverage your existing customer base and offer 3rd party solutions or products that would benefit them. For example, Intuit has an MSP offering with QuickBooks and its app store. What hidden value does your customer base hold to third party solution providers?
- Connecting Customers – If you have more than one distinct customer segment, you could leverage these segments by providing value that connects them. For example, fitness wearable companies are connecting the wearable consumers with personal trainers and healthcare providers.
- Connecting Products to Connect Customers – Are you selling two different offerings to different customer bases? Do these customer bases interact outside your offerings? What could you offer to connect them and leverage this? Equifax is a good example of this as they sell information and services to consumers as well as to financial institutions.
- Supplying to a Multisided Platform – Here you provide something of value for your customer’s customer that enhances the value of the product they are buying from your customer. This can be a tricky offering as you must ensure that you do not damage the relationships with your existing customer base.
Take Action
Take some time this week and review your business model. Based on the strategies discussed above, are there MSP opportunities that you could leverage? What steps do you need to take today to get the ball rolling and build your own multisided platform offering?
Finally, review the following related articles for more information:
- The 11 Commandments of Business Success
- How to Boost Customer Experience and Improve Your Business
- 10 Ways to Provide Sensational Customer Experiences
- 8 Easy Ways to Uncover Your Customer’s Wants and Needs
“Nothing limits achievement like small thinking: nothing expands possibilities like unleashed thinking.” William Arthur Ward
What is your experience with finding hidden value inside your business? Leave your comments below!
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