Platform Thinking in Business Development: Why Companies Like AirBNB are so Successful

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).
AirBNB

AirBNB

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!

 

References

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.

 

 

 

Consumerism Driving Customer Retention

Years before it was the world’s biggest online retailer of books, Amazon.com was “an idea floating through the New York City offices of one of the most unusual firms on Wall Street: D.E. Shaw & Co.” (Stone, 17). Jeff Bezos, entrepreneur and David E. Shaw, financial analyst, with backgrounds heavy in computer science, were able to predict the vision of Amazon.com. At this time, the Internet had just taken off and thousands of households were just discovering it’s beauty. Financial professionals & analytics, were able to determine that “The Everything Store,” as Amazon is referred to now, would be a household name in the turn of the century. The world watched as the preliminary tools of the first computer scientists evolved into complicated applications like Amazon, that were able to make consumerism quick and easy.

consumerism

Amazon took off in Seattle after “Bezos’ parents invested $100,000, in Amazon.” (Stone, 33). On 1995, much of the preliminary work in stocking Amazon’s “shelves” was done by ordinary people. (Stone, 38). In the basement, in Seattle, many supporters packed many boxes of “esoteric” items, well into the night. Setting up Amazon took a lot of dirty work, but soon, Amazon.com plunged into the Internet, like a new animal that was reborn into the wilderness. (Stone, 43). There was an air of excitement post release. Everyone at the new company worked super hard to keep Amazon afloat. (Stone, 49). Jeff Bezos’ and David Shaw’s internet startup became 150 employees. Bezos was a great leader. Customers flocked to the site over the 1999 holidays after Amazon made national headlines. Amazon’s story was a story of supply and demand. It was a story of understanding consumerism (Stone, 94).

During that year, Amazon worked hard to keep up with holiday orders, and Bezos pulling crazy antics to fulfill out-of-stock orders, like raiding toy stores in third-world countries. Employees made sacrifices to work at distribution centers across the country. (Stone, 95). Amazon was “frugal to the bone”. The bombing of the twin towers didn’t phase Amazon, but pushed it further on it’s trek. (Stone, 127).

Amazon pushed onward like a marathoner, with its operations. In the next decade, Amazon expanded for several reasons: supply and demand, free-shipping and next-day shipping, and Amazon Prime, which paralleled Netflix,  Amazon was one major example in technology’s history, of how a new internet startup was able to retain customers. Amazon was there for it’s customers in the times that they most needed it, it worked endlessly to stay alive often at the cost’s of it’s workers.

5 Ways to Increase Customer Retention, which Can Be Summerized from “The Everything Store,” by Brad Stone.

  1. Understand Your Customer, Understand The Market, Understand How Consumerism Works

2. Be at the Right Place at the Right Time

3. Always Make Sure Your Shelves are Stocked During the Holiday

4. Perservere

5. Be a Leader, but be Fair to Your Employees

Amazon is a story of a tech company that took advantage of the Internet “bubble” in 95’ and ran with the idea of e-commerce on the web. It exploited the lower-class in America showering the world with a glittery picture of Internet startup fame, and the people who put there blood into making it a reality today were the lower-class in America.

Today Amazon boasts it gives individuals a “great opportunity to work at Amazon,” to no wit’s end.

The tech company struggled with financial hardship in it’s early years, but is now successful because of Jeff Bezos’s business spirit, and his uncanny ability to fulfill holiday orders in any way possible. Shaw and Bezos, working together, were able to see the vision of Amazon.com as financially possible, and achievable with the uproar of the Internet and the average household computer, especially after the turn of the century.

Decades later and overwhelmed with stock, Amazon and it’s employees are growing weary. Because of the high consumer demand, huge Amazon warehouses have opened. The leadership and skill of Amazon’s leaders is evident by it’s net capital today, and customers are greedily flocking to the site.

consumerism, consumerism, consumerism…

But when does mass consumerism end?

Are we really in the midst of a spiritual awakening, or will America paint it’s own dreary picture in the next decade, grey like Seattle, where Amazon’s journey began?

 

References

Brad Stone. The Everything Store. Hachette Book Group, 2014.

Communication these days?

How do you communicate with your friends these days, mostly in person, mostly online, mostly calls, mostly texts, apps? Don’t lie.

Movies like Wall-E have commented about our lack of physical interaction and our future to come. Scientific studies have proved that we are social creatures of the physical world, yet social media of the digital world has been changing what it means to socially interact. This with technology have been making it easier to tap in and out of the Facebook, Twitter, Google plus and what not and we can talk to these sites to talk to our friends via speech recognition forgetting that a simple phone call can get you an immediate response.

I admit that I am a texter because it ironically frees up my time as opposed to phone calls which i invest more of my time into. Besides our insane amount of time on the computer or texting, the latest subject of discussion that has been brought up is, “emoji overuse” as I prefer to call it.

I’ve also noticed that sites such as Facebook force emoji use whether or not you type a face or pick a face from a gallery of images.

 

This lovely article on Mashable discusses the the use of emoji through the years. I remember the days when they were called “emoticons” and the difference between emoticons and emoji’s being pixel versus a more rendered face. I personally find the emoji’s odd looking myself, but for they cutely convey expressions people are feeling.

Emoji’s are considered something used mostly by females and the younger generations. There have been surveys and studies saying the more emotional you are as a person the more likely you will use emojis to express those feelings in text, and the condensed faces are connected to young folk who simultaneously abbreviate their words as well.

Why Mashable and myself find this so concerning is because emojis are meant for light playful use in certain situations. But according the writer’s personal anecdote of using emjoi’s to express their sadness of their friend moving rather than calling their friend to talk personally.

This casual substitution brings a more stunning realization about blasé treatment of situations not meant to be taken lightly.

Our generation is coming out with these amazing technological revolutions such as Google Glass and smart watches that make communication easily accessible but a lot less personal.

 

http://mashable.com/2014/07/09/emoji-linguists-communication/