Why should leaders stop obsessing about platforms and ecosystems? originally appeared on Quora: the place to gain and share knowledge, empowering people to learn from others and better understand the world.
Answer by Erich Joachimsthaler, Founder & CEO of Vivaldi, Author of The Interaction Field, in his Session:
Company leaders have now learned that the traditional pipeline business model, also known as the experience curve or value chain, though it has been the foundation of every business until today, is also less important. For many businesses, the pipeline or value chain has been globalized, digitized and optimized. It has been the source of value creation through the supply-side economies of scale. In short, scale leads to lower unit cost of output.
Today, it becomes ever harder to squeeze out value from the value chain or pipeline while executives learn in dismay how over the last years, the companies that have created most value have either built platforms from scratch or have evolved to become digital ecosystems. The enthusiasm and hype have been steered by companies often referred to by some type of alphabet soup such as FANGA which stands for Facebook, Apple, Netflix, Google and Amazon or GAFA. Sometimes Microsoft or Alibaba are added as in FAMA or FAMAA. Lately, Tesla would be an option. Facebook, Apple, Amazon, Microsoft, and Alphabet make up now nearly 30 percent of the S&P, a historic height.
These are Wall Street top performing stocks as well. Apple even has become a 2 trillion dollar company in terms of market capitalization, from 1 trillion just two years ago. Hence, there is good reason for company leaders to be obsessed with platforms and digital ecosystems. The fact though is while these companies