Platform Economy is the talk of the day. The discussions tend to revolve around a few familiar super ones, which can blur the multidimensional nature of platform businesses. Let’s bust the 10 biggest myths!

1. TEEMU MALINEN
FOUNDER / SOFOKUS GROUP
10 Biggest Platform Economy /
API Economy Myths Busted

2. It’s only a big hype
Actually only the term is new, first platforms were
founded long before 2000 and now some of them
control their markets (like AirBnB).
We are only just beginning to understand the
opportunities network effect, API:s and other basic
principles of Platform Economy.
It is a natural continuum to the development of
internet systems as a business core that has been
going on for decades.
1.

3. You must own
the platform
Although Platform Economy always has at least one
digital system in the core, there are limitless ways to
tap into the value network and revenue streams.
Why not make a SaaS service that can be
monetized through already well established
platform (like Smartly.io)?
Or maybe use a super platform to create your virtual
shelf (like Alibaba) for your own business.
Key is to position your business wisely in your
segment’s value network.
2.

4. Only size matters
While super-platforms (like Amazon) control their
markets, there’s numerous lucrative business
opportunities for smaller players.
Every area of business will end up having several
platforms that compete, complement and support
each others.
It pays to think a platform approach “sizing” that is
convenient for your business ambitions & resources.
3.

5. Our business is
too old-fashioned
If you have a really extensive understanding of your
own market, it tends be a very good starting point
for developing a business.
Many platform businesses have started by building
something only to one’s own needs. Even Google
started as an underdog.
4.

6. Limited amount of
platform business models
exist
Winning business concepts tend to have an Unique
Selling Proposition, why would platform business
be any different?
Because the platform business is so young, it just
seems that there are only a limited number of
choices available.
Any business model is potentially also available to
Platform Economy as well, so be brave & creative!
5.

7. Just build a platform and
the business follows
By definition, a Platform Economy business requires
an internet technology system, but that doesn’t
suffice. Business is always a sum of various factors.
You’ll still need a clear and distinct core business
concept, a solid revenue model and heaps of work
molding everything to fit the ever-changing needs of
your customers.
Making something that people prefer – even love –
above others is always a steep task, just doing an
app/platform is (almost) never enough.
6.

8. Platform Economy is
really hard
It’s safe to say that being really good in any business
is a challenge. However Platform Economy thinking
usually unlocks opportunities already lying dormant
on your business.
You can look platform economy as a lens to
evaluate and rethink your current way of doing
business: is your offering on par with the stiffest
competition?
Look at the CNBC Disruptor 50 list and you’ll quickly
notice that the best are all somehow leveraging a
platform.
7.

9. Platform
=
business strategy
Using a core digital system is an integral part of any
business strategy, but it isn’t enough by itself.
Why would people choose your platform amongst
all? Is your pricing model the most attractive one
(like Spotify) in your market? What’s your role on the
value network?
Building a business will basically always be the
same, you’ll just have to adopt modern ways to
make it a winning one.
8.

10. A platform always
accelerates business
While a platform is very handy for scaling a business,
building the optimal product/market fit takes
usually years. Typically starting a platform-based
business might actually feel slow and arduous,
before the pace really starts to pick up.
You can immediately sell consultation, but in order
to monetize a platform it has to be at the level
people are willing to even try it. My advice is that be
prepared for 3-5 years of hard labor before things
really start to move. And if things progress faster,
more power to you!
9.

11. Your platform must be
open to everybody
A successful digital business concepts tend to
embrace openness, but it doesn’t mean that every
platform should be available for everybody.
Actually thinking whom to let to use your platform
and whom to not might be the one of the key points.
It all depends on the business your on.
10.

12. That’s all folks!
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