New Foundations of Platform-Ecosystem Thinking
A research plan for a new whitepaper from the Platform Design Toolkit team
This post is brought to you by the team at platformdesigntoolkit.com and is dispatched in our fortnightly newsletter. In this post we present our 2020 research plan for our new whitepaper: New Foundations of Platform-Ecosystem Thinking.
It’s been a while that Platform Design Toolkit is around: the first version dates back to 2013. I think the Platform Design Toolkit is enjoying some Lindy effect, becomes stronger and more foundational as it becomes older and more people use it. The Toolkit, the Platform Opportunity Exploration Guide and the original 2016 Whitepaper to date helped thousands of organizations to develop their strategies.
Our efforts for 2020 will be strongly focused on helping our Community of Practice grow and thrive: stay tuned for an online-first learning experience comparable with our live sessions. On the other hand, we’re aware that our practice and tools need to catch up with evolution: after more than three years we’re aware that the context and scope of platform-ecosystems thinking have indeed changed deeply, and grew widely.
Organizations from the 2020s need to reckon with the need to engage with platforms and, through them, with ecosystems.
At the same time, massive shifts are happening in markets and society, due to technological, memetics and cultural evolutions and— due to increasing degradation of human habitat. An interweb of related crises, that brings more risk of destabilization at the social and political level.
We released the whitepaper on 20 November!
Download it directly from our webpage: platformdesigntoolkit.com/new-whitepaper.
Why the topic has never been more relevant than today
Platform-ecosystems thinking has been traditionally used to provide organizations with new possibilities to rethink two massively important aspects: business model innovation and organizational evolution.
More complex opportunities in the consumer space
From the perspective of business model innovation the marketplace-platform paradigm is gaining ground (see our: The Real Future of the Platform Economy) and enormous opportunities are surfacing. The consumer market, especially the services space, is still industrially organized for its 80% and the application of platform and marketplace design is poised to unlock a massive amount of value, by allowing the long tail of personalization, and the efficiency of platforms to penetrate such economic spaces.
In the consumer space, aggregators are set to play a crucial role in enabling suppliers and consumers to self-organize thanks to the so-called “managed marketplaces”¹. Industries that are more regulated and capital intensive, sectors such as housing, healthcare, personal services, entertainment, education… have all been so far pretty much protected from the disruption of aggregation platforms. This resistance, though, won’t endure. Signs of transformation can be seen in the early and sometimes incredible success of services such as wonderschool and outschool (education), opendoor (housing), care.com(care)… and many more. All these services are inherently more contxtual, location based, trust and mastery sensitive: while everybody wants to make the Uber for X, none of these incredible opportunities can be really tackled with a Uber approach. We definitely need to understand more from a design perspective about how to tackle such more “systemic” opportunities, that normally feature multiple sides and stakeholders, longer relationships between parties, usually bigger transactions and inherently call for more participative governance processes and the need for more skin-in-the-game for participants.
More systemic strategies in business ecosystems
On the other hand — when it comes to the industrial economy and business ecosystems — systemic coalitions are emerging as powerful approaches to developing infrastructural and technology-intensive layers. In contexts such as in telecommunications, computing, logistics, mobility, financial services, aerospace… industry consolidation is essential to allow efficiencies and ubiquity. In such contexts, organizations that succeed are those which find the leverage points that allow them to gain a position of influence, at the same time embracing systemic governance models. These approaches ensure whole-system and whole-industry transformation and development. Stories like that of Android, Hyperledger, or Open Compute Project show that companies can cooperate on whole-industry enabling platforms.
Corporate evolutions experiences such as that of Haier — that we described on this blog here — are setting the bar in breaking silos and boundaries for cooperation. Haier’s new artifact — the Ecosystem Micro Community — is a great example: a self-directed, self-organized ensemble of micro-enterprises that sets a shared systemic goal to which all parties commit, within a cascading set of success incentives. All powered by an emerging technology such as smart contracts that help the Chinese giant eliminate the bureaucracy otherwise attached to such a swarm-contracting: thanks to such a breakthrough idea in organizing, the Chinese giant created opportunities in food, fashion…much beyond its original white goods heritage.
Challenges to traditional framing of ecosystem strategies
While it’s good to handwave to the increasing opportunities, we must also acknowledge that our global society is subject to rising social, economic and environmental risk factors². The current global crises — from environmental degradation to social inequalities — have cascading destabilizing effects on the political and economic sphere pushing us to recognize how platforms should, not only be used to engage with today’s wicked problems but also be subject to deeper scrutiny and reframing.
The practice of platforms-ecosystems thinking needs to be able to integrate a higher order of human systems complexity, the “civilization” level: it needs to zoom-out.
A massive process of business models reinvention is foreseeable in the short term as asset-heavy, energy-consuming, and infrastructure intensive business models could soon become liabilities: as new policies targeting reductions of environmental impacts (such as energy consumption, carbon footprint, or plastic pollution) are being put in place, organizations need to learn to enable more by owning and controlling less. Entire industries need to be reinvented and this will need to happen through what John Hagel calls opportunity-based narratives⁴.
Not only companies, but also consumers will need to embrace these new paradigms and change their habits: platform thinking, with its capability to leverage on distributed resources, helps us shift towards shared access from ownership of idling resources, and may offer ways to accelerate the transition towards a circular economy, low-energy and low-carbon business models. In a few words, dematerialization and decoupling.
Our economy will need to reconcile with limits — as in Kate Raworth’s doughnut economics — and with interdependence, in Batesonian terms: in both aspects, platform thinking can be useful by being a design practice that is inherently relationship-centric and intrinsically outside-in.
This transition towards such new business and organizational models is enormously challenging for incumbents of the XXth century. They used to live off the profits of an economy based on consumption, exploitation and massive externalities: all needs to end now.
An evolving landscape of organizing
Emerging organizational models are catching up with the enablers and drivers of the platform-ecosystem shift: pervasive technology and the expectation of personalized experiences. The continuity between the inside and outside of an organization is being acknowledged, business model innovation and organizational innovation are coalescing: borders are being torn down. New technologies such as blockchain (or holochain), crypto tokenization, machine learning: all are opening new frontiers for design, and making new strategies possible for organizational development.
New experiments in distributed governance — leveraging on plummeting coordination cost— are making it possible for actors such as cooperatives and communities to self-organize in distributed ways around the production of a growing number of products and services.
On one hand, we see such decentralization and horizontalization of organizing happening in the corporate space, on the other, we also see a growing and renowned interest for cooperative ownership models, powered by platforms: it’s not a surprise that this year the platform cooperatives conference in NYC was the biggest and boldest ever.
While companies such as Haier use blockchain to facilitate the expansion beyond the traditional corporate boundaries — through autonomous coordination of a wide web of internal and external micro-enterprises — a growing community of practitioners is aiming at exploring how decentralized governance mechanisms can enable wholly new organizational models.
This transition towards organizations based on multiple-centers, and powered by distributed technological architectures not only requires research in the field of governance but also in understanding what this evolution means for incentives and value perception. Network effects are an expression of how value is perceived in large scale networks and therefore we need to understand better how networks effects “scale across” distributed and collaborative systems. We must keep the best of the technique (network effects) while mixing it with a completely different intention of building networks: more democratic, open, accessible, conscious, participative and entrepreneurial.
How does aggregation theory work when there’s no centralization and no defensibility moat?
We have a quite good understanding of these “modern monopolies” but they work on the premise of controlling digital identities and stores of reputation: what happens when such information is controlled by the user itself? What happens when communities can “fork” a platform based on the fact that the data is public and owned by the nodes of the network?
Here, technologies such as Blockchain — or Holochain, with its evolutionary agent-centric information and computing model⁴, based on localized systems of information where there’s no need for intentional control asymmetries over data — represent innovations that organizations need to understand and integrate, otherwise risking abrupt obsolescence.
Decentralization & Institutional innovation
This particular aspect of the evolution of platforms — towards new systems of a cooperative, distributed, collective, decentralized governance — and the resulting increase of local, communal, and cooperative sovereignty that can come from it, points a direction of development of platform thinking that shouldn’t be underestimated. By means of such upending innovations, digital technologies and organizational designs, entrepreneurial citizens — possibly supported by true platform states, regions and cities — will be able to reinvent institutions radically:
- by designing new financial assets for long term investments into regenerating their cultures, landscapes, and communities;
- by running liquid organizations based on do-ocracy and empowered collective decision making that can shape productive processes with platform strategies;
- by accounting individual contributions to the organizing, building a reputation that can be related to decision making power, giving birth to a new form of liquid leadership.
Citizens will end up prototyping something that is in the middle between entrepreneurship and democracy, a new institutional layer that will thrive in the space between public, open and private.
Certainly, opportunities to design, execute and run citizen-led, contextually and locally focused platform strategies that effectively obsolete the globalized market for some key economic processes (think education, energy, food production, culture…) are eventually becoming more visible.
Challenges to the design process
But what happens then to the platform design process as we move from designing for growth and exploitation towards an approach of design as participation⁵ one that is “revealing instead of obscuring”?
How can a platform design process emerge that factors in shared and collective ownership and governance from the very start?
How does such a design process work? What’s the role of co-creation, empathy, solidarity, and learning? How can humans cooperate in such a design process and how can different organizations cooperate — at a higher level of systemic thinking? What’s a concept of “strategy” that fits into this new, inherently non-competitive landscape? All these questions must be asked and experiments must be run as new technological and organizational enabling factors are made available, in the coming decade.
Re-examining success
In light of this transition, towards a reframing of the organization and its business model, a reexamination of success factors, concepts such as “business case”, KPIs and impact will be needed. The polycentric and ecosystem centric nature of emerging platform-strategies requires to measure success not only from the shaper’s perspective but it needs to factor in and incorporate the ecosystem’s success and its willingness to participate.
As we work to unearth what we call the “platformization index” for 2020s platform ventures, we’re indeed exploring several questions:
- is the organization fit for leveraging the platform opportunity?
- is the ecosystem ripe on the other end to resonate with that?
- is there a whole system (user, regulators, stakeholders) acceptance or resistance to the narrative that the platform is favoring?
- is there a capacity for network effects to multiply value at scale and — at the same time — scale across by preserving users' right to their data, freedom, choices, and their ultimate right to participate in decisions and in the economic activity?
All these questions will need to be asked from a new lens, one that factors in multiple polarities and distributed ownership, one that brings us co-evolutive platforms that are able to evolve within the environment but also across different environments, bringing insights and solutions across different communities.
Entrepreneurship and Development of the Human: the Future of Work
Finally, all these challenges demand us to recognize and nurture the flourishing of human potential that has been — so far and too often — channeled into platforms as a way to provide a less-regulated alternative to industrialized supply, and just (ab)used until a machine can take over and definitively improve efficiency, as per Kalanick’s infamous idea to get rid of the “dude in the car”.
Topics such as how to build sovereignty in humans and communities, how to develop the essential psycho-technologies, needed to take part to the hyper distributed, partially coordinated, messy, radically innovative, jugaad and at the same time ambitious and exponential platform explosion that we are set to see in the 2020s, will become humanity’s bread and butter.
Too often when exploring the so-called “future of work” pundits provide visions of a tech-powered passion-economy where talented and independent gig-worker can find success thanks to centralized marketplaces connecting them to their 1000s true fans⁶.
Our bet is different: the future of work, we dare to imagine, is made of self-organising entrepreneurial communities, sharing common technology stacks and protocols, where the talented contributors of the 2020s can not only monetize their personal talents through global platforms, but also collectively organize with other fellow citizens, to co-invest and take over some key productive processes such as welfare, education, food, energy, mutual credit.
All these developments will be radically transforming for current institutions: some will crash in such a pace of change — it’s no secret that the current organizational lifespan is shrinking widely. The leaders will instead be able to rethink how they work and play such emerging paradigms to cope and cooperate with the citizen-led sovereign competition. Entirely new types of organizations will emerge, with a radically new way to relate with the brand, narratives, and stories.
Exploring the Future: our 2020 Whitepaper
Download it directly from our webpage: platformdesigntoolkit.com/new-whitepaper.
To explore such an unpredictable future, and provide you with visions of the gist of it — plus the tools to design it — we are venturing this year into writing a new research whitepaper.
This new whitepaper will be based on interviews with real people reinventing platforms now, rigorous analysis of current trends and speculative peeks into scenarios. It will hopefully provide the reader with new foundations for thinking about platforms and ecosystems in a changing world, a new visual language and most likely help us integrate the Platform Design Toolkit 3.0 release — coming contextually — with additional tools to design strategies for the 2020s.
“The common theme is obvious. It is the idea that we can no longer afford to see people only as ‘consumers’ or ‘workers’ or ‘owners’ or ‘voters’, but rather, first and foremost as citizens: members-of, and contributors-to a community & a society”
Alastair Parvin — “Progress, Again.”
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Thanks for your support!
Many thanks to Lucia Hernandez, Stina Heikkilä and Yolanda Martin for the early reviews of this post.
References
[1] Jin, L. (2019). 8 Things to Consider When Building Managed Marketplace Companies. Andreessen Horowitz.
[2] Check out the just-released World Economic Forum 2020 Global Risk Report)
[3] John Hagel III (2019). On the Edge of a New Decade.
[4] Luck, N. (2018). Holochain: Reinventing Applications.
[5] Slavin, K. (2016). Design as Participation. Journal of Design and Science.
[6] Kelly, K. (2012). The Technium: 1,000 True Fans
Photo by Henning Witzel on Unsplash
