Don't get Ubered. What Every Strategist Needs to Know About Digital Competition

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Don’t Get Ubered: What Every Strategist Needs
to Know About Digital Competition!
Annabelle Gawer, PhD
Surrey Center for the Digital Economy
Bryan Kirschner
Apigee Institute

@AnnabelleGawer‪
@bryan_kirschner

The views expressed in this presentation are those of
the presenter, and not necessarily those of Apigee
Corporation or the presenter’s employer.
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Strategist
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©2016 Apigee. All Rights Reserved.

Strategist
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Change Agent

Steps
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Steps
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Goal

Let’s talk about “revolutions…”
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Innovation
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Innovation
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Changes the Game

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2005-12-07 15:54 LucaDetomi 300×289×8 (22714 bytes) {{GFDL}} Primo microprocessore Intel, l'[[Intel 4004]].

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2005-12-07 15:54 LucaDetomi 300×289×8 (22714 bytes) {{GFDL}} Primo microprocessore Intel, l'[[Intel 4004]].

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Shodan

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Shodan

Change the Rules for
Technology
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Change the Rules for
Technology
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Change the Business
Model

Digital Platforms
Competition and Innovation in the Platform Economy
Prof. Annabelle Gawer
I ♥ APIs
London, 2 March 2016

▪ Introduction: Why do platforms matter?
▪ Platform Fundamentals
–  - What are Platforms / How Platforms Create Value
•  - Network Effects / Platform Business Models
▪ Results from the Global Platform Survey
▪ The European Platform Observatory
▪ Discussion + Q&A
Agenda
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Some of my publications on (mostly digital) platforms
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Agenda

Technological Platforms

A Gawer’s Platform Research
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Platform strategies

“Platform Leadership”

•  Platform Leadership (HBR
2002)
•  The Elements of Platform
Leadership (SMR 2002)
•  How companies become
platform leaders (SMR 2008)
Platform competition (economics and strategy)
•  Platform owner entry and innovation in complementary markets (JEMS
2007)
Platform governance (organization theory)
•  The organization of technological platforms (RSO 2010)
•  Institutional work as logics shift: The case of Intel’s transformation to platform leader
(Org Studies 2013)
•  Innovation Policy within Private Collectives (Technovation, 2013)
Platform evolution
(management &
organization theory)
•  Modelization, graph
theory
•  Ecosystem governance
•  Platform boundaries
•  Platform business
models
Conceptual clariﬁcation, leadership role in platform research
•  Platforms, Markets and Innovation (2009)
•  Bridging differing perspectives on technological platforms (Research Policy 2014, 6000 downloads, “best paper”
AOM 2014)
•  Encyclopedia & Handbook chapters
•  Conference and symposia organizer / international reputation
•  Keynote speaker

Platform innovation (innovation studies)
•  Industry architectures as determinant of successful platform
strategies (EMR 2009)
•  Industry platforms and ecosystem innovation (JPIM 2013)

Intro
Why do platforms matter
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2

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Most unicorns are platforms#

70%
30%
Platforms
Non Platforms
Global Unicorns = 115
Source: P. Evans, CGE; CB Insights, Capital IQ, CrunchBase, 2015
Platform = 80 of 115 companies, $300B valuation
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Netflix has over 70 million members in over 190 countries. Users watch more
than 125 million hours of TV shows and movies per day.
Sources: About Airbnb at: https://www.airbnb.com/about/about-us; Netflix at: https://media.netflix.com/en/press-releases/netflix-is-now-available-around-the-world; About LinedIn at:
https://press.linkedin.com/about-linkedin; https://support.google.com/googleplay/answer/2843119?hl=en
Airbnb provides accommodation listings in more than 34,000 cities and 190
countries. There are over 2 million listings world-wide; Paris alone has more than
28,000 listings.
LinkedIn has over 400 million members in over 200 countries. Over 70 percent
of users are outside the US. Over 100 million unique users access LlinkedIn
each month.
Google Play apps and digital content: Over 1.6 million Android apps are
available in 136 countries world wide; Google Play movies available 105
countries; books available in 75 countries; music available in 62 countries.
Platforms provide basis for rapid global scale
The New Multinationals

Google play’s platform services
Apps, movies, books, music
No. of Services
4 services
3 services
2 services
1 service
No service
Russia
Source: Google Play country availability: https://support.google.com/googleplay/answer/2843119?hl=en-GB

Platform Fundamentals
What are platforms
How platforms create value
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Platforms as Multi-Sided Markets with Network Effects
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Innovation Platforms
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Innovation platforms are technologies
that facilitate the development of
complementary innovation in
innovation ecosystems (Gawer &
Cusumano, 2002; Gawer, 2009)
•  Economies of scope in innovation
•  Sharing IP and tools to connect (APIs)
•  Reduced search cost of
complementary innovators
•  Reducing barriers to entry for
complementors in complementary
innovation

The API Economy
Google creates APIs to extend search and analytics beyond their own services

www.imperial.ac.uk/business-school Option 1
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ServiceData
Consumes
Produces
Improves
experience
Many free services
One data set
and common semantic
The more context
the more efficient
and the more value
Virtuous Feedback Loops in Digital Platforms
Internet Service Provider
Value enriched
Data
generates
revenue
Example:
Search/Information Mgmt :
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Rated auction/Selling:
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User
BI Based Revenue Models
(eg Advertisement)
Core Semantic
Data Set
Mindmap

Dating
Bars
Amazon
market-place
Transactional
Air BnB
UBER
Google
ARM
Intel micro-
processor
The platform serves as an intermediary for
direct exchange or transactions, subject
to network effects
Innovation
The platform serves as a technological
foundation on top of which other ﬁrms
develop complementary innovations
Facebook for
Developers
Apple iOS
Apple App
Store
Google
Android
Facebook
SAP NetWeaver
Innovation
Platforms

MSPs
Match.com
Google
Play
Apple
AUTOSAR
Qualcomm
PLATFORMS

Results from the Platform Survey
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Companies

Pla-orm

ecosystem

Hierarchal

Organiza7on
+

Physical
Assets*

Asset
Heavy

Daimler

Moovel

Johnson
Controls

Panop7x

GE

Predix

Samsung

Tizen

Asset
Light

Google

Google
Play

Uber

Uber
app

Airbnb

Airbnb
app

Priceline

Booking.com

Structure

*
Includes
HQ,
other
rooOops,
retail
outlets,
manufacturing
plants,
service
shops,
etc.

Pla-orm

Mixed

Apple

App
store

Amazon

App
store

Enterprise
type

Examples

Reshaping enterprise structure#

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64 / $3,123B
27 / $181B
82 / $930B
Global unicorn platform startups
Europe is lagging
N. America
Europe
Asia
Source Global Platform Database 2016
Platform companies with a market value of US$1b or more on Dec 1, 2015

Global unicorn platform startups by city

Source: P. Evans, CGE, CB Insights, Capital IQ and CrunchBase, 2015.

European Platform Landscape
Source: Global Platform Survey, Center for Global Enterprise, 2016
Concentration in “Beer Drinking” Countries, Some in “Vodka Dinking”,
none in “Wine Drinking” Countries
Country
City

What is needed to support platform growth in Europe?
-  Reliable and complete data on platforms: To inform businesses and governments
-  Critical mass of knowledgeable actors
-  Knowledge + Experience networks, and shared expertise around platforms
-  Executive training for managers:
-  Platform strategies
-  Platform business models
-  How to develop innovative ecosystems
-  Please share your ideas !

The European Observatory of the Platform Economy

Be a part of our network
• Contact us
• a.gawer@surrey.ac.uk

Don't get Ubered. What Every Strategist Needs to Know About Digital Competition

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Don't get Ubered. What Every Strategist Needs to Know About Digital Competition