In this context 'a platform' is a solution to the effects of fragmentation.
'Fragmentation' describes the separation or disconnection of things that users must connect together to achieve their task.
Fragmentation can affect:
- effort
- economics
- opportunity
in any environment, including:
- business
- technology
- operations
and cause:
- duplication of work
- higher costs & lower margins
- limits on growth & innovation
- lock-in preventing alternative solutions.
A platform responds to this fragmentation by:
(1) solving the fragmentation;
(2) providing consistency between all users;
(3) offering unique value to attract and retain those users;
and
(4) ensuring user compliance to platform rules that prevent users from making new fragmentations.
This allows for platform effects of:
- lower costs (for example, by removing inefficiencies of fragmentation)
and
- new potential (for example, by enabling development on top of the platform).
1. Solving An Important And Common Problem Of Fragmentation
Fragmentation means that users who require a particular set of assets to execute a core purpose are inhibited in some way by the disconnection or separation of those assets.
The effort to connect them is a cost to the system and takes resources away from scalability, speed, adaptation and innovation activities.
Fragmentation manifests in many ways, including:
- incompatible products requiring translation, modification, or integration
- isolated processes needing coordination to act in concert
- commercial or regulatory controls inserting barriers to otherwise linked activities
Fragmentation can exist for one type of user, or many. A platform that unites multiple types of user can define a new ecosystem (see section (2)).
A solution to this fragmentation is valuable if the problem it solves is common to a large enough cohort of users who also consider it important enough to switch to the solution.
Platforms are standardised methods for solving fragmentation problems, so successful platforms solve fragmentations that harm a lot of users who value the solution.
These users will be facing fragmentation as a significant hindrance on their core activities.
They may attach importance to solutions because of different reasons, including time or other cost savings, enabling them to undertake new activities, or removing unnecessary steps from a necessary process.
Being more than just a theoretical specification, a platform provides the means to act.
Its proposition contains the reasons to adopt and rely on it.
User adoption therefore requires not just the platform solves fragmentation but also that it justifies their effort to switch (see section (3)).
Barriers to entry must be low enough to make the platform widely accessible to relevant users, while barriers to exit must add enough value to ensure user compliance rather than dissent (see section (4)).
2. Provide Consistency, Between Users And Over Time
The regularised experience that a platform provides must be consistent between users, as well as for each user over time.
This builds trust and allows users to depend on the platform.
Consequently, users invest in the platform and build further value on it.
Consistency allows users to interact with each other better too, producing new efficiencies and opportunities.
Platforms thus extend into existing ecosystems and create new ones, where each participant is directly or indirectly connected to every other via their use of the platform.
This can happen horizontally between participants at the same level, or vertically across different levels, depending on the problem it solves.
A platform.
A platform uniting an ecosystem.
3. Offer Something Uniquely Valuable To Attract And Retain Users
A platform without users is non-functional, so attracting and retaining them is a core obligation.
Solving fragmentation is not enough to achieve this.
Potential users face switching costs, including:
- sunk investments in their own solutions
- reliance on third party mitigations
- workflow changes
- retraining
and others.
They may also face more pressing priorities elsewhere in their business.
Certain users may also use fragmentation – and their ability to resolve it – as a competitive advantage, or market differentiator.
Even once on the platform, users are also tempted by fragmenting non-compliance (see (see section (4)).
Solving for switching costs and competing values can attract even the most recalcitrant user to a platform, if the fragmentation solution is also effective.
A platform controlling access to unique additional value.
Examples include enabling, or acting as a unique gateway to:
- a desirable proprietary product or licence
- a regulatory preference
- benefits from other platform users, such as discounts, deeper collaboration, or preferential supply
Where this value is significant enough it acts to both attract and retain users.
Defend Against Fragmenting Incentives To Make Users Compliant
Platforms attract users with a consistent user experience. They retain them with consistent user behaviour.
Inconsistent and non-compliant users disrupt the value of a platform, encouraging users to leave and introducing new risks of fragmentation.
Users will disrupt platforms for a number of reasons, including:
- to create or protect an advantage
- to access a related opportunity unsupported by the platform
- to avoid a constraint or obligation of the platform
Any of these actions might be justified by a short term benefit, or the prospect of long term advantages.
These are strong and persistent incentives, so a platform must continuously absorb, balance and counter them.
Platform compliance starts as partly self-reinforcing through the core value it delivers: more compliant users add uniformity to the platform, increasing its stability in solving fragmentation and increasing the incentive for new users to join and also be compliant.
Users need to see this reciprocal benefit and know that collective compliance is supported by an individual cost of transgression.
Non-compliant behaviour should lock users out of the platform and its related unique benefits, temporarily or forever, in part or in full.
To achieve this a platform must have effective monitoring and executive functions. These are easier under direct, small leadership than committees and this influences successful platform governance structures.
Governance may involve a separation of powers - for example, different streams for technical policy, commercial policy and enforcement activities - but it is essential that each stream both respects the domain of the others and takes responsibility for its own area wholeheartedly.
Tying these together through an individual or collective command structure is more effective than sharing responsibilities. Poor governance is a more common reason for platform failure than technical or commercial barriers. It allows non-compliance to pass unchecked and throttles platform growth and evolution.
Conclusion
We have seen that a platform must solve an important and common problem of fragmentation, provide consistency between users and over time, offer something uniquely valuable and defend against fragmenting incentives by making users compliant.
This demands clear, singular leadership that tightly defines the scope of the platform - the fragmentation it solves and how - and the compliance and reward mechanisms it operates.
Platform benefits must go beyond merely resolving a fragmentation problem and include the ability to build value on the platform. Value increases reliance between different types of users and applications for different purposes.
If the underlying problem changes the platform must evolve at least in lockstep with it, if not in anticipation.
In this way all users who suffer the problem of fragmentation benefit from their compliant use of the platform and this collective activity unlocks resources for creating new value in other ways.
