Business Strategy Books Pdf – Over the past decade, business platforms such as Uber, Airbnb, Amazon and eBay have dominated the world. In almost every sector, traditional businesses are under attack from digital disruptors who are effectively harnessing the power of communities. But what exactly is a business platform and why is it different? In Platform Strategy, Laure Claire Reillier and Benoit Reillier offer students, digital entrepreneurs and executives a practical guide to understanding what platforms are, how they work and how you can build a successful one .
Using their own “rocket model” and original case studies (including Google, Apple, Amazon), they explain how design, ignition requires learning a new set of management rules and scaling a business platform. The Platform Strategy offers many interesting insights into the future of platforms, their regulation and governance, as well as how they can be integrated with other business models.
Business Strategy Books Pdf
Benoit Reillier and Laure Claire Reillier are co-founders of Launchworks, a leading consulting firm dedicated to helping organizations develop and scale innovative business models.
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Chapter 1 Introduction to business platforms Uber, the world’s largest taxi company, owns no vehicles. Facebook, the world’s most popular media owner, does not create content. Alibaba, the most important retailer, has no inventory. And Airbnb, the world’s largest accommodation provider, owns no real estate. Something interesting is happening. Tom Goodwin In 2007, designers Brian Chesky and Joe Gebbia were struggling to pay their rent in San Francisco when they noticed that the city’s hotels were fully booked for an upcoming design conference. They thought of renting three air beds in their loft and cooking breakfast for their guests. The next day, they designed a website, originally called airbedandbreakfast.com. In less than a week, they had three guests, paying $80 a night. When the guests left, thinking it might be a great idea, they asked a former colleague of Joe’s, engineer Nathan Blecharczyk, to help them build the site we now call Airbnb. construction. In the first few years, the team was unsuccessful in raising money. The vision of a trusted community marketplace for people to list, find and share private accommodation around the world didn’t appeal to venture capitalists (VC), who couldn’t see a big enough market. But Brian, Joe and Nathan persevered and found ingenious ways to carry on. In 2008, the company ran out of cash, so they had to find creative ways to make money fast. With the presidential campaign in full swing and both sides trying to show support for their favorite candidates, the Airbnb team decided to sell special edition Cheerios cereal boxes for the two presidential candidates called ‘Obama O’s’ and ‘Cap’n McCains’ ‘ for $40 each. They made $30,000 in a few weeks. In early 2009, they were invited to join Y Combinator, one of the leading incubator programs in San Francisco, and received $20,000 in funding from renowned angel investor Paul Graham. A seed round of $600,000 led by Sequoia Capital followed shortly thereafter.1 However, the business was unsuccessful. The Airbnb team realized that the pictures of the places advertised on their website were not attractive. According to Brian Chesky, ‘Web startups will say, “Let’s send emails, teach [users] professional photography, and test them.” We said, “Screw that.”‘2 They rented a $5,000 camera and went door to door, taking professional photographs of as many New York listings as possible. Earnings quickly doubled to $400/week and the site began to grow. Brian knew at this point that it wasn’t just about pretty pictures, but that Airbnb first had to ‘create the perfect experience [. . .] and then measure that experience.’ In April 2012, the team began monetizing the service by charging up to 15% on bookings. More funding rounds followed, 3 allowing Airbnb to hire more staff to focus on customer experience and market the platform to scale the business. Its success comes down to three things: ease of participation for host and guest; efficient matching of hosts and guests; and safe and easy trans activity for all. Since then, Airbnb has grown exponentially (see Figure 1.1), from 50,000 listings in 2011 to over 2 million in April 2016.4 And it’s not just inventory. It is estimated that around half a million people around the world sleep in Airbnb rentals during peak times. Figure 1.1 Airbnb global listing growth Source: VentureBeat, Airbnb website, Launchworks analysis Airbnb is currently active in 34,000 cities in 190 countries, and has booked 35 million nights.5 Airbnb raised $1.5 billion in June 2015 , which is one of the largest private funding rounds ever. The company is estimated to be worth $30 billion, 6 meaning that in less than 10 years, the travel accommodation platform has become one of the most valuable privately owned startups, worth more than the hotel chain largest Wyndham , Intercontinental and Hyatt, which owns an extensive portfolio of prime real estate around the world. And Airbnb owns no property. Although there has been an overwhelming response from customers, Airbnb’s success story has not been without objections from hoteliers, who say that individuals who rent out their rooms or entire houses to guests represent ‘unfair competition’ in their trade. Evidence is emerging7 that Airbnb is not only expanding the market, but also facing more competition from hotels, which have to respond with new services and lower prices. Interestingly, these lower prices benefit all consumers, and not just Airbnb clients. But Airbnb is under increasing pressure from city authorities over housing regulations and tax laws. We will return to these issues in Chapter 13 regarding platforms and regulation. Table 1.1 Comparison of major hotel groups vs. Airbnb Unlocking Economic Value on Ebay Using eBay as an example, let’s say you have a large table with matching chairs that no longer fits your newly renovated apartment. For you, this second-hand furniture has an almost negative value; it takes up space, and given the very reasonable price you paid for it at IKEA a few years ago, you don’t want to spend time looking for someone to get your hands on this set. Conversely, consider a nearby student who is on a tight budget and is looking for a desk and chair for his new pad. He wants to save money and doesn’t care about ‘new’ things. The student is willing to pay £50 for the whole series. eBay can match you and this potential buyer, with very limited friction. Let’s say the student’s bid of £30 was the highest and he was the happy winner of the auction. The cost of the platform intervention is £20 (£50 willingness to pay minus £30 winning auction bid) for the buyer and £35 for the seller (that’s £30 plus the negative price you attach to the insufficient table set which takes up space: say £5). So, out of ‘thin air’, the platform managed to create an economic value of £55. Today, measure this with millions of daily transactions across all platform companies (including car and home rental companies, e-commerce markets, etc.) and you understand the potential transformation of the platform business. Platform models have become mainstream as Airbnb shows the rise of digital platform businesses. In the same way that eBay connects buyers and sellers, Airbnb creates communities of hosts and guests and enables them to transact around the world. Unlike traditional businesses, platforms do not produce anything and only distribute products or services. What they do is connect directly with different customer groups to enable transactions. eBay, a well-known company, creates value simply by connecting buyers and sellers. For thousands of years, markets were physical and local. Groups of buyers and sellers play a major role in the fabric of human society. Farmers markets and matchmakers have been around for thousands of years. But something extraordinary has happened in the last 20 years: technology has allowed these business models to grow on a global scale. The earliest platforms to expand globally were credit card companies such as Discover, Visa, Mastercard and Amex. But none have scaled as quickly or as globally as new tech-focused players like Apple, Google and eBay, and all are supported by digital platforms. Many more followed, reinventing entire areas of consumer industries, from media (Facebook), retail (Amazon), transportation (Uber), telecommunications (WhatsApp), payments (PayPal), music (SoundCloud), accommodation (Airbnb) and bigger. other sectors. The colonization of this platform extends to the enterprise domain as well as a growing number of verticals: wholesale goods (Alibaba), talent platforms (Upwork), operating systems (Windows), etc. In most business literature, platforms are considered ‘black boxes. ‘ serve what economists call ‘multilateral markets’, or are assumed to function like traditional firms. Unfortunately, neither approach provides much insight into the business platforms themselves. Many commentators use the generic term ‘platform’ to describe a ‘technology platform’ that includes processors, access devices such as mobile phones, PCs and tablets, software applications, etc.