Why Midsize Businesses Need Their Own Digital Platforms

We need a lot of imagination to imagine a digital world that is not dominated by big platform providers. Especially when Gafa (Google, Apple, Facebook, Amazon) and Bat (Baidu, Alibaba, Tencent) continue to gain market power. These digital platforms seem to be getting too big, too powerful, too global. But the vision of becoming more independent from big platform providers as a business with its own digital platform should be lived by every business. Three developments in the digital economy show why there is so much to say for SMEs as well.

“As a service” business models are the future

Well-known economist Jeremy Rifkin said years ago access instead of ownership. And that was even before the advance of “as a service” business models, still based on the poverty of marginal costs, as Rifkin then explains in detail in his book “The Zero Marginal Cost Society”. But as a company, it is not enough to simply change its business model to a subscription model or a freemium model. On the contrary, companies must internalize the fact that they can no longer see themselves only as manufacturers and therefore as pioneers. You should always be a companion to the customer.

But how to accompany the paths in the digital world when these paths are getting further and further away? When customers have so many digital touchpoints with the business that the business itself can hardly get out of the information maze it has created itself? This is precisely why companies can rely on their own digital platform. This brings together content scattered across the Internet under a separate digital roof. In this way, a continuous journey for the customer can be guaranteed and the “as a service” business model can also be established in the long-term market.

Data-centric is a euphemism for brutal ad-centricity
Binary classification in data or transaction orientation is often used to determine digital platforms. However, the term data orientation should definitely be understood as an understatement. Data-driven platforms are always based on evaluating user data to display personalized advertisements. From the perspective of the platform operator, data orientation must therefore always be equated with advertising orientation.

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The content meticulously curated by the algorithm in the platform’s newsfeed aims to capture our attention for as long as possible. This means that a little more advertising can be shown, another trailer can be placed in front of the trailer, and another interaction can be elicited from us. Increasingly, however, we are also seeing that it is also possible to do without it. Businesses do not necessarily have to display advertising to justify the economic rationale of their own digital platform. On the contrary, individual companies are bold and visionary and try to develop their own platform-based ecosystem. It is then about the innovative exchange with users at ground level, the offer of digital services or the creation of new sales channels.

The merger of the apparent contradiction between decentralization and platforms gives rise to micro-platforms, which are also gaining importance in medium-sized companies. These platforms also pursue the objective of bringing together exchanges of content and users, but on a completely different scale. It’s not always about scaling up in the mass market, but about establishing the platform sustainably. This creates targeted platforms that can fill exciting niches and enable you to offer digital services yourself.

This evolution is favored by Web 3.0, the tokenization of digital platforms being particularly remarkable. The distribution of tokens, a kind of virtual currency, also allows smaller platform providers to create innovative incentive schemes for using the platform. The supposed size of the network of major Web 2.0 platform providers can be fatal to these platforms, particularly due to the development of Web 3.0.

Shapers of the platform economy

There is no shame in occupying a niche market with your own platform. On the contrary: it is in fact the niche market in which, according to the inventor of the theory of disruption Clayton Christensen, disruption begins. SMEs now have a good chance of occupying these platform niches and becoming the architects of the platform economy themselves. It takes courage to question your own business model and innovate.

Image source: Scopevisio AG

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