Popular booking application, AirBNB, allows consumers to book reservations and events that are out of town, by providing important information about these venues, which can help its’ users make decisions. Users can add information in the form of reviews, ratings and photos. AirBNB uses the platform business model.
The platform business model is a scalable business model. It takes advantage of technology to connect people and organizations in order to exchange services and things of value (Parker, 2). Less viable today, is the pipe business model, where stuff is consumed in a linear fashion, like water flowing through a pipe (“Why Business Models Fail..”).
Companies that use the platform business model today are Amazon, YouTube, eBay, Wikipedia, iPhone, Upwork, Twitter, KAYAK, Instagram, AirBNB and Pinterest (Parker, 3).
AirBNB is a company that uses the platform business model approach, and connects to various venues like rental homes out of of the country, and popular reservations, experiences in NY and featured destinations. The platform of AirBNB is a place where consumers can easily access the service that AirBNB has to offer based on the network of connections that the business model enables (Parker, 9).
The “platform” or application of AirBNB has many features of a top-notch platform. The site has a solid, clean user interface in bright, modern colors, simple layout, good color scheme, and an attractive logo. It is simple yet elegant, which gives off vibes of “exploration and connection to external sources.”
AirBNB is a great example of a successful business that started from scratch, but became successful by understanding the importance of platform marketing in order to build customer retention (Parker, 9).
With the platform approach there is a greater user interaction and opportunity for business development. Platform marketing is like the Internet where information congregates rapidly for consumer interaction on social media and forums, Twitter and Facebook. An application that uses platform thinking is YouTube, which has a sleek and simple interface that is poised to host new content, create user engagement, and increase customer retention, by providing opportunities for the music hosted on it’s servers to be shared amongst users, and on Facebook (“Why Business Models Fail..”).
Unlike e-commerce applications online, which use pipe thinking, platform thinking optimizes conversions, analyzing consumer data regularly with modern data-analytics tools (“Why Business Models Fail..”).
These services can grow business as content curators are able to gauge what is popular and interests their consumers, unlike the pipe model that is limited, and only focuses on the products it is selling. Businesses who are interested in long-term growth, and customer engagement should apply platform thinking instead of pipe thinking (“Why Business Models Fail..”).
Meet other digital marketing professionals interested in platform thinking at goElaborate!
Choudary, Sangeet P. “Why Business Models Fail: Pipes Vs. Platforms.” Wired, https://www.wired.com/insights/2013/10/why-business-models-fail-pipes-us-platforms/. Accessed 10 October 2017.
Parker, Geoffrey G., et al. Platform Revolution: How Networked Markets Are Transforming the Economy And How to Make Them Work For You. W. W. Norton & Company, 2016.