Platform Business Models: Frameworks, Concepts and Design

Preface
Acknowledgments
Contents
About the Author
1 Introduction
	What Are Business Models?
		Models
		Business Models
		Platform Business Models
		Single- and Multi-sided Platforms
	Network Effects
	Platforms Make Markets Efficient
	Platform Roles
	Platforms as Networks
		Complementarity, Compatibility, and Standards
		Consumption Externalities
		Switching Costs and Lock-In
		Significant Economies of Scale
	Platforms as Ecosystems
	Key Platform Decisions
2 GRAB.in™: Enabling Hyperlocal
	Introduction
	Grab’s Journey
	Grab.In Business Model
		The B2B Switch
		Platform Architecture—Hot Spots and Bikers
			Pricing Model and Unit Economics
		First Mover Advantage
		Delivery Challenges
		Multi-homing
	Diverse Perspectives
		Musings from the Delivery Team
		Operations Behold!
		Powering Technology
		Investments into Grab.in
	Competitive Topography
		Shadowfax
		Dependo.com
		Ekart Logistics
		ElasticRun
	Hyperlocal Aspirations
		Road Ahead
3 Network Effects
	Externalities, Network Externalities, and Network Effects
		Defining Network Effects
		Same-Side and Cross-Side Network Effects
		Positive and Negative Network Effects
		Properties of Network Effects
			Strength of Network Effects
		Direction of Network Effects
		Nonlinearity of Network Effects
		Leveraging Networks for Growth
		Coring
		Tipping
	Products, Services, and Platforms
4 Faircent™: Powering P2P Lending Revolution
	Introduction
	Faircent’s Journey
		Funding Support
		Regulatory Rigmarole
		Shrinkage of Competition
	Faircent Business Model
		Platform Architecture—Lenders and Borrowers
		Pricing Model
		Handling Investment Risks
		First Mover Advantage
		Monetizing Faircent Stack, Open APIs, and Developer Ecosystem
	Competitive Topography
		Lending Club
		PayTM Micro-finance Platform
		i2i Funding
		CashKumar
		LenDenClub
		Monexo
	Faircent’s Aspirations
5 Value Creation in Platforms
	Value Architecture
		Discovery
		Matching
		Transaction
		Evaluation
		DMTE as a Cycle
	Summary
6 Swiggy™, Foodora™, and Yelp™: Hyperlocal Platforms
	Introduction
	Food Delivery Business
		Origin of the Journey
		Aggregation Versus Delivery
		Swiggy
			Food Delivery Process
			Business Model
			Sustainability and Growth: Addressing Multi-homing and Envelopment
		Foodora
			Food Delivery Process
			Business Model
			Sustainability and Growth Opportunities
		Yelp
			Business Model
			Growth Opportunity
			Sustainability of the Business Model
	The Road Ahead
7 Network Mobilization
	Strategic Dimensions: Resources and Users
		User Dimension
		Resource Dimension
	Solving the Penguin Problem
		User Attraction Strategies
		Resource Leverage Strategies
	Summary
8 BharatMatrimony.com
	Matrimony in India
	Evolution of BharatMatrimony.com
	Diversification
	Platform Architecture
	Marriage-Related Services
	IndiaProperty.com
	Way Forward
9 Just Dial Limited
	Evolution of Just Dial
	The (Traditional) Just Dial Business Model
	The JD Search Plus Business Model
	The “JD Shop Online”
10 Practo
	Making Practice Management Easy: About Practo Ray
	Helping Patients Find Doctors: Practo Search Through Practo.com
	Practo Ads
11 Pricing and Subsidies
	Subsidy and Money Sides
		Relative Strength of Cross-Side Network Effects
		Relative Price Sensitivity
		Relative Value Attached to Quality of Products and Services
		Marginal Costs of User Addition
		Relative Differentiation Among Users
		Relative Bargaining Power of Complementors
	Pricing Models
		Subscription Pricing Models
		On-Demand Pricing Models
		Razor-Blade and Reverse Razor-Blade Pricing Models
		Freemium Pricing Models
		Auction Pricing Models
		Free Pricing Models
	Pricing and Platform Scale
12 Zomato™ Gold: Platform Overreach
	Introduction
	Hyperlocal Food Delivery Business
		Firm’s Origin
		Zomato’s Gold Program
		Zomato Gold Design: A Unique “Loyalty” Program
		Positive Network Effects for Restaurants
		Negative Network Effects
		Restaurants’ Reactions
	The Way Forward
13 Platform Architecture
	Ecosystem Value
	Open and Closed Platforms
		Trade-Offs in Opening Platforms
	Shared and Proprietary Platforms
		Proprietary Platform
		Shared Platform
		Joint Venture Platforms
		Licensing Platforms
	Platform Design in WTA Markets
	Matrix of Platform Architecture
	Platform Architecture and Growth
		Interoperability
		Licensing More Partners for Configuration and Customization
		Opening the Core
14 Delhivery: Leveraging the Platform
	About Delhivery
		Initial Thoughts of the Idea
		Enterprise Story 2011–2015
		Growth Over the Years
		Current Status
	Delhivery Businesses
		Express Services
		Customer Segments
		Operations
		Fulfillment Services
		C2C Logistics Services
		Hyperlocal Services
	Delhivery’s Services
	Pricing
		Transportation Services
		Fulfillment Services
		Technology Services
		Pricing of Bundles
	Opportunities and Challenges
15 Winner-Takes-All Dynamics
	What Are WTA Markets?
		Strong and Positive Network Effects
		High Multi-homing Costs
		User Preference for Special Features
	Economics of WTA Markets
	Impact of WTA Markets on Complementors
		Coordination Problems
		Tipping/Standardization
		Multiple Equilibria
		Lock-In Costs
	Evolution of WTA Markets
		Pioneer’s Dilemma and Penguin Problems
		Subsidization and Monetization
		Pivot Dilemma
		Remora Strategy
		Integration Dilemma
		Relationship Dilemma
	Regulating WTA Markets
		Predatory Pricing
16 Tally Solutions Pvt. Ltd.: Orchestrating the Ecosystem
	Introduction
	Evolution of Tally Solutions
	Tally the Boxed Product (1988–2012)
		Positioning Tally in the Financial Accounting Market
		Bouncing Back from the VAT Debacle
		Distribution and After-Sales Service/Support for the Product
	Tally: The ERP Platform (2012–2020)
		Tally’s Offerings
		Release 5.X
		Tally Pricing
		Distribution
		Dealing with Piracy
		Competitors
	Tally: Evolution of the Ecosystem (2020 Onward)
	TallyPrime
		TallyPrime Versus Tally.ERP 9
		Upcoming TallyPrime Features
		TallyPrime Pricing
		Tally Software Services—The Ecosystem Enabler
17 Platform Envelopment
	Platform Competition
		Platform Scope
		Breadth and Stickiness of the Complementor Network
		Switching and Multi-homing Costs for Users
		Intermediation Efficiency
	Platform Envelopment
		Follower Advantage
		Staircase Strategies
	Competing Against Envelopment
	Mitigating Envelopment
		Racing (to Acquire Customers)
		IP Protection
		Caging of Customers
	Managing Multi-platform Bundles
18 Tarnea Technology Solutions: Competing in a Winner-Takes-All Market
	Introduction
	Birth of Tarnea
	Pharmaceutical Retail in India
		Retail Pharmaceutical Value Chain
			Principal
			Distributors
			Retailer
			Online Pharmacy
			Retail Pharmacy Chains
			Independent Retail Pharmacy
	Evolution of Tarnea
		Creating the Product
		The Pilot
	Product Development at Tarnea
		Requirements Phase
		Prototyping
		Development
		Testing
	Tarnea—the Platform
	Tarnea’s Ecosystem
		Ecosystem View
	Pharmaceutical Retail—A Winner–Takes-All Market
		Multi-homing Costs
		Network Effects
		Opportunities for Differentiation
		Pharmaceutical Retail—A Density Business
	COVID-19 Acceleration and Challenges
		Digital Onboarding
	Way Forward
19 Complementary Business Models
	Dominant Business Models
		Multi-sided Platforms
		Servitization and SaaS
		Clusters
		Communities and Networks
		Ecosystems
	Combined Business Models
		MSPs and SaaS
		MSPs and Communities
		MSPs and Clusters
		MSPs and Ecosystems
20 QWIKCILVER™ and WOOHOO™: Developing a Complementary Platform
	Introduction
	The Qwickcilver Enterprise Journey
	The Gift Cards Industry
	Market Size—India and the USA
	Competition and Envelopment Threats
		Stellr
		Blackhawk Network Holdings
		InComm
		Ceridian Stored Value Solutions
		Gyft
	Qwikcilver Business Model
	Foray into Distribution Business—GiftBig Portal
	Evolution of Pricing Model
	Woohoo—Qwikcilver’s Multi-Sided Platform
	Sustaining Growth
	Technology Choices
	Integrating with PoS
	Working with Card Manufacturers
	Influencing the Regulatory Framework
	Issues with Traditional Gift Cards
	Opportunities in International Markets in 2017
	Road Ahead
	Appendix 1: Types of Gift Cards
	Appendix 2: Gift Card Life Cycle and Critical Success Factors (Source Author’s Visualization)
21 Contemporary Issues in Platforms
	Social Impact of Platforms
		Content
		Data
		Competition
	Platform Governance
		Platforms as Marketplaces, Gatekeepers, and Editors
		The Problem of Many Hands
	Platforms in Contestable Markets
		The Rise of Platform Conglomerates—FANGAM
		Platforms in Multi-market Competition
	Platforms and International Regulations
	Conclusion
22 JOSEPHS®: the Service Manufactory
	The Birth of the Idea
	The Concept and Architecture
	JOSEPHS® as an Open Innovation Intermediating Platform
		Customers
		Tenant Firms
		Fraunhofer IIS
		FAU
	Network Effects in the JOSEPHS® Ecosystem
	Measuring JOSEPHS®’ Success: After One year of Operations