Value for customers is created differently on platforms than by traditional product/service business models. Today we’ll present and discuss the metaphor of how traditional businesses can be thought of as “pipelines” and how these pipes differ from digital platforms. This post is the first in a new series: “The New Rules of Healthcare Platforms.” We’ll be writing about platform thinking, new mental models, and the new economics of platform business models and strategy. We’ll have at least seven posts to explain these new rules. You’ll have some unlearning to do. We’ll illustrate how platform business models are fundamentally different than traditional product/service business models. To understand platforms, we need to change more than just our thinking—we need to learn new rules about how the digital world works and how platforms fit in.
network effects
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Does your Healthcare Company have a Platform Business Model?
Your Company Has A Technology Platform…But Do You Have A Platform Business Model and Strategy? Today in healthcare, platforms are understood mostly as technology. That’s not wrong, but it’s limiting and it misses a huge opportunity to adopt a platform business model. In most other industries platforms are also understood as a business model and strategy. Outside of healthcare, there are 45+ books focusing on this topic...A platform business model connects producers and consumers — creating an ecosystem that facilitates value exchange and interaction between them. Unlike traditional linear business models, where companies primarily produce and sell products or services directly to customers, platform models serve as intermediaries, making connections and facilitating interactions between two (or more) parties.
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The New Rules of Healthcare Platforms (Part 1): Value Creation Shifts from Pipes to Platforms
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The New Rules of Healthcare Platforms (Part 2): Pipe Scale vs. Platform Scale
Platform businesses scale differently than traditional businesses. Platforms scale through network effects. In the previous post, we introduced and described a widely used metaphor: pipes vs. platforms. Traditional businesses are pipes. Their value chains are linear. Value is added at sequential stages before a final product or service is delivered to consumers at the end of the pipeline. Platforms do not produce goods or services themselves—they make connections among stakeholders and facilitate value exchange among those stakeholders. Value is created outside the platform. Both pipeline businesses and platform businesses strive to achieve scale—but the type of scale they strive for is vastly different. In this post, we’ll explain how pipeline businesses strive for economies of scale (on the supply side) and how platform businesses scale through network effects (on the demand side).
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The New Rules of Healthcare Platforms (Part 3): Platform Thinking Expands from “Technology” to Business Model & Strategy
Today in healthcare, platforms are understood mostly as “technology”. That’s not wrong, but it’s limiting. We want to offer you a more expansive view of platforms, and in turn, understand platforms as being more than just technology. This post is the third in our series on The New Rules of Healthcare Platforms. In this essay, we will: Explain why platform business models are NOT new; Share a survey of health plan execs that documents a view of platforms as “technology”; Explain how network effects are the North Star of platform business models and strategy; Expand your view of platforms beyond just “technology.”
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