My Takeaways and Highlights: MIT Platform Strategy Summit 2021

by #MIT Initiative on the Digital Economy Co-hosted by #PeterEvans #GeoffParker #MarshallVanAlystine

Platforms Review and Forecasting: The Future of Platforms After a Year of Upheaval

🎤 Peter Evans – Managing Partner, Platform Strategy Institute (Summit Co-Chair)

👀 5 Key platform trends to watch

1. Industrial adjacency plays via platforms

p.e Sell and IBM = Oren Marketplace for the Mining Sector

2. Creator Economy + platform integrations.TikTok moves to the business with creators. Platform-to-platform integrations - scale with personalization

3. Experience economy + platforms. Amazon is rapidly adding experiences to its platforms (create experiences)

4. Blockchain innovation NFT's + platforms. Growth and structure of the emerging NFT industry

5. Rise of the Super Apps

🎤 Geoff Parker – Professor, Dartmouth College & Digital Fellow, MIT IDE (Summit Co-Chair)

🏭💼 B2B Platforms Differences between B2C Platforms 👨‍👩‍👦‍👦👜 Much of what we know about platforms comes from B2C. Main differences

1.Customer needs and sales cycles

2.Pricing and cost sensitivity

3.Marketing Approach

4.Product knowledge

5.Trust

6.Data Ownership

7.Interaction frequency (B2B<B2C<M2M)

💍 Fundamental economics of value creation helps us understand different systems. What is value creation comes from? Same-side network effects and collaboration tools; Cross-side access (markets and ecosystems); Standalone from the core.

🐛🦋 Technology initiatives differ along dimensions of business model and operating model and operating model changes required.

🖥️ Technology initiatives can be categorized by the number and type of actors involved.

💰 Infrastructure investments can exhibit "worse before better" impacts. Need to match metrics to type initiative: ROI vs Marketplaces Metrics

🎤 Pinar Ozcan Sais Business School, Oxford university

Finance: How do we access our financial data? Large financial institutions - apps back we can not share, we can not download. New world, we can do access to 3rd parties the data

Sectorial Platforms rising in finance:

Entrepreneurial Entrants: ✅ Cheaper, more user-friendly services ❗️Customer Trust, System Resilience, International Growth

Incumbents: ✅ Trusted Brand, Resources for Tech, International and Regulation Experience ❗️IT Silos, Cultural Silos, RegulationUnevenness

New Entrants (Big Techs): ✅ Trusted Brand, Resources, Cheaper, more user-friendly services, Fast Market Entry (Abundance of Complementors)

Facebook has more accounts than bank accounts, starting with p2p payments

Healthcare sector - Google, Microsoft, Amazon as Healthcare IT providers, keep the data and make prediction services, so the power is switching to the tech giants

🎤 Marshall Van Alstyne – Professor, Boston University & Visiting Scholar, MIT IDE (Summit Co-Chair)

Bad and Good ideas from Regulation

Should we treat platforms as infrastructure?

Is there a relation between Market Cap vs APIs. APIs financial impact differs by type of API: Net Income B2C APIs 0,86% vs B2B APIs 38% vs Internal APIs 4% but Hack Risk 13%!

We should measure the Customer Lifetime Value at Network Marketplaces, where the users are creating value and are free.

Funding Platforms: A Conversation with Venture Capital Leader Kai-Fu Lee

🎤 Kai-Fu Lee – Chairman and CEO, Sinovation Ventures

🎤 Andrew McAfee – Co-director, MIT IDE

📌 SupperPowers of AI (book)

- Data as a determinate factor to make value for AI.

- Global network research is connected very fast, applying innovation everywhere.

- AI has become a negative topic due to privacy, security, Social Dilemma.

Media and Social Media is affecting the negative sense of AI

American vs China platforms

- In China is harder to emerge than in the US: Chinese entrepreneurs have a very high competition as in China winner take all. So p.e for food will be a SupperApp covering everything. In the US there is a market for more than one player.

- US has the Silicon Valley culture: innovation, build what does not exist yet, in China there is a practical mindset, build and improve what is already existing.

Chinese: practical, will do a new Facebook

- China has a competitive environment, only one survives and becomes the super app (monopoly). American has space for Uber and copy cats, original and copy cats

- SupperApps: a user in China can do 80% of his activity in one app: payments, family videos, pay bills, green passport Covid it is an ecosystem.

📣 Advice:

- Chinese entrepreneurs develop local and then go to emerging countries

- Not invest in platforms, first build one side, one killer thing, and then offer other services.

- Start US companies looking to the Chinees ideas

📈 Trend:

- Power from e-commerce to social and entertainment platforms

- Regulation

Energy Platforms: Accelerating the Great Energy Transition

Moderator: Peter Evans – Managing Partner, Platform Strategy Institute (Summit Co-Chair)

On-line summary: Beyond infrastructure, platform thinking is gonna be a key enabling factor for energy transition, from production to end-user demand.

🎤 Laszlo Varro -VP for Global Business Environment, Shell

- Transition to a clean energy system is not gonna be a copy-paste transition

- We will need 2 to 3 times of current electricity demand from renewable electricity, so scale really matters.

🎤 Ilham Kadri – CEO, Solvay

- A Chemical company like Solvay, is unleashing the potential of the Company by adopting the platform concept. 3 pillars for the growth based on business platform: Battery platform, plastic-composites platform, green hydrogen platform

- Which creates bridges, between business units, leveraging the scientific know-how, allowing the right hand to with the left hand inside the company, Solvay.

🎤 Paul Browning – President & CEO Mitsubishi Power Americas and Chief Regional Officer, Europe, Africa, the Middle East and the Americas, Mitsubishi Power

- When thinking about launching a new business, like Green hydrogen, technology is very important but the business model is maybe even more important, that’s where Mitsubishi really got interested in platform thinking.

-Green Hydrogen has to solve the chicken or egg problem to adopt a platform-based business model.

-As an Engineering team, people are good at learning new things and adapting to the industry needs, but to move to the next phases, the need of hiring to raise in areas like platform thinking to get smarter in order to move into the future.

🎤 Cathy Zoi – CEO, EVGo

- The Digital layer is one of the things that is making the driving experience easy and seamless.

Competitiveness Through Business Model Innovation

Moderator Marshall Van Alstyne – Professor, Boston University & Visiting Scholar, MIT IDE (Summit Co-Chair)

On-line summary: Build a Minimum Loveable Platform that brings value in a short term, and doesn't kill the cash cows.

🎤 ThembaLihle (Themba) Baloyi – Innovative Business Leader and Founder, Discovery Insure

-The best time for traditional companies to become platforms is right now. If you don't innovate you die. The platform is not just technology, is also collaborating effectively.

- Most important clues to invest: Entrepreneur mentality about IP, scaling the environment, and the journey till getting there.

- Many governments struggle with IA. Platforms, the barrier is a matter of trust. Obsess the data ownership.

- Profitability objective - how to be an enable to the government sector. Chance to address the deficit

- Petrol is petrol, use the Right platform, right benefits

- Minimum ❤️Loveable Platform: On a Board, CFO, CIO will present the financial impact of the platform, but should be presented what consumers will love, if they love, they will pay!

- South Africa: sectors with platforms on telecoms, banking, and financial services.

- When introducing a new business model be sure you are not killing your cash cow.

🎤 Sophia Velastegui – CTO, AI for Dynamics 365 Applications, Microsoft

- Competing with Microsoft, roll AI

- Leverage the knowledge in the space

- No need to develop the core technology from scratch, to reduce the time to market. P.e AI Solutions

- Culture has to foster innovation and can be bottom - up. Need to orchestrate from C-Level when innovation comes from outside the company, p.e from Startups, other orchestrators.

- Engagement is the key factor

🎤 Bruno Zerbib – Executive Vice President, Chief Platform and Technology Officer, Schneider Electric

-When you build a strategy you have to be sustainable and deliver value to your customers.

- Energy is not going to be a commodity anymore, due to the intelligence, the automatization of the sector.

- Arise the PROSUMER role of energy,

- Inflection point to be efficient to move the world to be more sustainable. All together will deliver more value through platforms.

- Monetization, hard problem to solve: A matter of people and culture (Agile). How to explain to the CFO the business cases: develop new features but not killing what already exists, focusing on validation from the customer.

- Get the Minimum Valuable Platform that brings value in a short term.

🎤 Emma McGuigan – Global Lead, Intelligent Platform Service, Accenture

traditional firms compete with tech giants

- Strength of the traditional companies they know the sector and the industry, the customer

- Born as a platform can cover all in deep

- Innovation to reuse the capabilities and transform the company should be sponsored from Top - Bottom.

- Partnerships, sharing, and get value from both sides. Mission to get together the partnerships as an Ecosystem.

Building B2B Platforms in a Material World: A Conversation with Gisbert Ruehl, CEO Emeritus of Kloeckner Steel

🎤 Gisbert Rühl – CEO Emeritus, Kloeckner Steel

🎤 Geoff Parker – Professor, Dartmouth College & Digital Fellow, MIT IDE (Summit C0-Chair)

On-line summary: Digital Transformation for traditional companies has to come from the CEO as is a cultural mindset change.

- The profound changes in the last 10 years have been: disruptive (business models) and faster speed adoption driven by the internet.

- Not adding so much value to your operations, you become a commodity, then start to think of a new business model.

- The pillar of the digital transformation is the change of the culture of the company. Is not just a technological change, is a cultural change for the employees of the companies, but also for suppliers and customers.

- Digital Academy: do courses instead of working hours.

- Change the behavior: Strategy and Plan vs Do and check if works!

- Most difficult part is to convince customers and suppliers, although they are using platforms like Amazon. Customers don't want o change: what we can do? Automate processes through AI. Focus on the customer, make what is more convenient for the customer

- Transformation efforts should come from the CEO. CEO has to drive the transformation as it is so profound, on a daily basis change, not just a monthly communication.

- Hire people with minimum digital know-how.

- CEO usually speaks (deploy), but is necessary to learn from Startup: Customer-Centric

- The importance to be neutral as a marketplace.

Supply and Demand Shocks in Platform Markets

🎤 John Horton – Labor Economics & Online Marketplaces Research Group Lead, MIT IDE

Impact by COVID-19:

Lower expenses => Less "supply" to gig platforms

- Less travel (flights, rooms) entertainment demand.

- More cash is available

- Gig work for extra cash

Fewer time-consuming activities => More supply to gig platforms

- Less travel (flights, rooms) entertainment demand.

- More time available

- Gig work for extra cash

General Advice for platform marketplaces:

Closing Remarks

🎤 Peter Evans – Managing Partner, Platform Strategy Institute (Summit Co-Chair)

- Degree of Industry incumbents looking to platforms, the energy sector

- Opportunities for a platform to platforms

🎤 Marshall Van Alstyne – Professor, Boston University & Visiting Scholar, MIT IDE (Summit Co-Chair)

- Traditional business transforming to platforms, even commodity products to platforms by transforming the processes.

- Minimum Loveable platform

- Regulation trend in EU, US, China

🎤 Geoff Parker – Professor, Dartmouth College & Digital Fellow, MIT IDE (Summit Co-Chair)

- What do customers want? They don't want a platform, they want can a platform can do.

- Ensure we are learning about China's business model innovation.

- Leadership angle is critical for traditional companies.

I personally like how #PeterEvans #GeoffParker #MarshallVanAlystine :

- run the #Summit and make us learning through the experienced platform voices,

- the experience of networking and live music!

Definitively, a Must attend #event

If you have attended please leave your feedback here

#marketplace #platformstrategy #MVP #Innovation #traditional #digitalbusiness #platforms #prosumer #customers #talent #CEO