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Benefits of a Platform Business Model


For many companies from all over the world, a platform business model has made it possible to conduct their operations on a massive scale. Uber and Airbnb are two of the most successful companies who have adopted this model. From their success stories, it’s easy to say that such business model can indeed be beneficial in more ways than one.

What is a Platform-Based Business?

Before I discuss some of their benefits, allow me to give you a quick look at what this business model is. Simply put, this is a business model wherein two or more independent parties are being connected. The creation of value is achieved not through production, but through interaction. This means that the more interactions are present, the more valuable a business becomes.

As a plug-and-play business model, platforms allow a connection, interaction, and exchange of values across multiple participants. Its value creation is not one way since there are many parties that are involved.

To know more about platforms and other business models, consult with the pros at who will help you better understand the concept and what it can do for a company to succeed.

Benefits of a Platform Business Model

Here are some of the benefits of platforms, which can explain their rising popularity:

  • Enhanced Interaction: One of the benefits of a platform is that it brings enhanced interaction with the consumers. With this, a collaborative ecosystem is established. There is a constant sharing of resources. It encourages people to work with one another for the collective good. Unlike in the case of traditional models, customers are part of the business and they will never feel aloof.
  • Fast Growth: Another good thing about a platform business is that it scales fast. Since the launch of Uber in 2010, it has already penetrated more than 700 cities and 80 countries. It’s just one of the many examples of how quick the growth is. This can be attributed to the fact that the business model is technology-driven and information-based.
  • It Creates Jobs: Platforms have also opened job opportunities to a lot of people. It presents new ways to generate income. For instance, those with real estate properties have realized massive success in offering Airbnb rentals. It provides opportunities for self-employment. While it creates jobs, it allows people to work almost anywhere they prefer, at their convenience.
  • Monetizes Data and Insights: Big valuations are common for platform businesses because of the fact that the information that they have can be monetized. They own massive data that they can even sell to smaller organizations. They can also make sense of your behaviors, and use these insights to further improve their services and earn bigger profits.

Without a doubt, a platform-based business can offer a lot of benefits, including enhanced interaction, fast growth, and job creation, among other things. The success stories of global multi-million-dollar corporations are living testaments that this business model is an effective alternative to the traditional approaches.

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