Chapter 1: Fundamentals of Platform Business Models
In the last decade or so, platform business models have revolutionized various industries, such as retail, entertainment, media, and travel. Companies such as Amazon, Spotify, and Airbnb have changed how businesses reach out to their consumers and how consumers use the products. One thing all these companies have in common is a platform business model that allows multiple producers to connect to their consumers. This multidimensional model is the biggest differentiator for these companies, giving them an edge over traditional linear business models catering to limited consumer segments or demographics. So, because of the rise of such platforms, more and more businesses are adapting to a platform-first approach.
But before we dive deeper into platform business models, it is essential to understand what the term platform means in general and how that concept applies to digital businesses. Hence, in this chapter, we will cover the following topics:
- What is a platform?
- Understanding platform business models
- Types of platforms
- Platform revenue models
- Benefits of a platform business model
- Building the right digital platform for a platform business model
