Mapping out the platform economy - Thoughts after Europe’s first platform conference by Zalando

Topics
Business, conference, multi-platform

A few weeks ago Europe experienced its first platform conference when Zalando organized Vizions in Kraftwerk, Berlin. In this post we share what we learned, what surprised us and what we expect from next year in the field of platforms.

But first, let us paint the picture for you. On April 20th, around 1400 guests gathered in a massive abandoned power plant to learn and share their latest thinking on the platform economy. The setting in between concrete elements and black steel curbings was magnificent. The industrial feel of the venue stood in contrast to the strong visual identity of the event, dominated by bright orange and magenta elements. The harmonious conflict was reinforced by plants, completing the inspiring atmosphere of the interior. This is what all modern tech-savvy business events supposed to be like. 

Zalando had organised an intense schedule for the whole day. Three topical streams –platform economy, platform strategy and platform technology – touted for the guest’s attention. The streams included panels, presentations and discussions running on three different stages – with varying topics from platform business model principles to culture to 5G network to smart cities and pricing models. All together, more than 24 hours of content from 97 speakers.

What does the first European platform conference bring to the table? How do the international speakers perceive the platform economy and its effect on established companies? What are the latest trends and hottest startups in the platform world? With those and many more questions on our mind the expectations were high.

Not-so-new things

The depth of analysis of platform business models remained on a rather high level and a lot we heard concentrated on the key dynamics of platform business principles. We heard the basics: A platform is about enabling an interaction between producers and consumers to exchange core value units. We heard that as a platform provider you need to remove the friction from the user interaction and provide high-quality matches between supply and demand. We heard you need to be ready to let go of a large portion of control.

Speakers emphasised that security will play a key role in the world of human-to-device and device-to-device connections (such as self driving cars and robotic surgeries). We heard that platform companies much like any other company have to build their culture on values, trust, compelling vision, open information sharing, as well as self-directed teams and meaningful work. It’s not just about the pool tables, fatboys, interior swings or pizza fridays that attract growth-minded talent, although it may look like that for an outsider.

Various presenters pointed out that disruptive innovations require constructive conflict. This conflict can be boosted by diversity, meaning companies should recruit people with different educational, professional and cultural backgrounds, genders, and so forth. Furthermore, successful platform players don’t just focus on their internal talent but also leverage open sourcing and community involvement to speed up the development – e.g. Amazon has open sourced their AI development to attract developers to join in and be involved in creating the next big thing.

Unexpected surprises

Everyone is talking about platforms. But people are still referring to very different things with the concept ‘platform’. Some are talking about the marketplace-like digital business models, others refer to technical architecture and some are just using the word whenever talking about a digital product or service. Again others were talking about platforms as they referred to explaining their social media strategy in content marketing, branding and sales. To avoid misunderstandings we recommend to define ‘platform’ every time you’re using them, or then just use other more accurate words to describe what you’re talking about.

A platform opportunity is usually related to scattered market, friction in the interaction between providers and consumers, or low utilization of an asset. We were positively surprised that some presenters including Nathan Furr, Assistant Professor of Strategy at INSEAD, emphasized the value of momentum in a product. You don’t need to build horizontal platform to generate value but also niche players can benefit the network effect associated to platforms if there’s momentum for the product. Think of Snapchat as an enabler to capture and share short life moments. Think of Twitter pushing you to message briefly and on-point. Think of Indiegogo allowing you to seek early sales and alternative funding for product development.

This leads us to a factor which can not be highlighted enough: NICHE. For instance in the Fintech scene, instead of banks that have been used to provide the whole spectrum of offerings related to money, the successful disruptors focus on a small part of the offering. They concentrate on developing an innovative solution for a certain pain and do it extremely well. (e.g. TransferWise)

Transparency of information being a vital part of platforms’ credibility, we were happy to hear Cindy Gallop, the founder of IfWeRanTheWorld, point out the increased need for honesty as well. “Rarely people in business world say what they really think. Do it and you will change things.”

Interesting encounters

We had really interesting discussions with various guests and also some presenters. Face-to-face talks were really the sugar of Vizions.

A key highlight was catching up with the people behind Platform Innovation Kit. They’ve done a great job in creating a canvas toolset to help companies in describing and ideating their own platform business. Sparring with them boosted also our thinking. For a company interested in getting involved in platform business, you need to first understand the business environment: trends, industry and market. Only after understanding potential opportunities and risks you start ideating interactions and creating the value proposition for your platform participants.

Another interesting conversation was about how rapid your iterations for building new service features should be in digital platforms. Tobias Balling, Co-Founder and CTO of Blinkist, shared that they believe in extremely short software development cycles. His ambition is to not invest time into building new ideas before you can implement them in a week for A/B testing. This forces teams to first crystallize the new feature they want to build and what they aim to accomplish before actually putting more effort into executing anything new.

Our expectations and hopes for next year

As of today, still many of the platform business model opportunities have been leveraged especially by American and Asian companies, e.g. Apple, Google, Alibaba, Facebook, Uber, AirBnb, Didi Chuxing just to name a few major ones. Because companies with multi-sided marketplaces and collaborative technical architectures have approved to be very lucrative, we are looking forward to witnessing more compelling European success stories arise. Next year we hope to have European players sharing their learnings and successes with platform business models in Vizions.

Altogether, Vizions by Zalando was a great start for European platform conferences. For next year’s conference, we hope that more stage-time and focus is given to in-depth conversations to improve quality and richness of content.

In addition, as we are already helping our customers to plan and build platform businesses, we hope to be on one of those stages presenting successful cases and top learnings next year. We want to provide tips and tricks for identifying platform opportunities, how to prototype these rapidly, how to build great user experiences for the participants of multi-sided platforms and especially how to scale your platform business model. And if we won’t make it to the stage, you will nevertheless see us sharing our insights and methodologies and soaking in the latest platform trends.

If you missed the event and want to dig into presentations and discussions, no worries! Here you can find all the recordings from the event.

Juho Kinnunen, Business Designer

Christian Baumann, Senior Service Designer