How to Launch Your Digital Platform
The ubiquity of internet access has caused a sharp rise in the number of businesses offering platforms that connect users for communication or commerce. Entrepreneurs are particularly drawn to these platforms because they create significant value and have modest operating costs, and network effects protect their position once establishedâusers rarely leave a vibrant platform. But these businesses also raise significant start-up challenges. Every platform starts out empty. Platforms need to immediately attract not only many users but multiple types of users. For example, itâs not enough that many customers want to book taxis by smartphone. Drivers must also be willing to accept smartphone bookings. Harvard Business School professor Ben Edelman has been studying the dynamics of platform businesses and strategies for launching them for 10 years. In this article he draws on research on dozens of platform sites and products to offer a framework for building a successful platform business. It involves asking five basic questions: Can I attract a large group of users at once? Can I offer stand-alone value to users? How can I build credibility with customers? How should I charge users? Should my platform be compatible with legacy systems? HBR Reprint R1504H The ubiquity of internet access has caused a sharp rise in the number of businesses offering platforms that connect users for communication or commerce. Entrepreneurs are particularly drawn to these platforms because they create significant value and have modest operating costs, and network effects protect their position once establishedâusers rarely leave a vibrant platform.
But these businesses also raise significant start-up challenges. Every platform starts out empty. Platforms need to immediately attract not only many users but multiple types of users. For example, itâs not enough that many customers want to book taxis by smartphone. Drivers must also be willing to accept smartphone bookings.
Harvard Business School professor Ben Edelman has been studying the dynamics of platform businesses and strategies for launching them for 10 years. In this article he draws on research on dozens of platform sites and products to offer a framework for building a successful platform business. It involves asking five basic questions:
Can I attract a large group of users at once?
Can I offer stand-alone value to users?
How can I build credibility with customers?
How should I charge users?
Should my platform be compatible with legacy systems?
HBR Reprint R1504H
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