Forbes' linked article on how platforms are 'eating the world' and helping to create indispensable trading partners, is one of those short but stand-out reads for anyone interested in starting and/or developing their business. For me, it's right up there with the question of whether, in today's world, you need a website, which I recently explored too. (Why your website may shortly become irrelevant)
I've long been fascinated with ecosystems and distribution platforms. Anyone familiar with my blogs will know that I'm a not so secret admirer of Amazon's approach to creating an ecosystem out of its many tentacles of business (e.g. its massive and diverse online site, content ownership - think ebook self-publishing, device and consumption controls (Kindle, Amazon Prime TV, etc).
And as an advisor, to several of Amazon's suppliers (and some 'wannabe' suppliers) in the past, there have been occasions where I've felt their frustrations at Amazon's seemingly omnipresent supply chain impact and for many, its indispensable, trading partner status.
The fact remains however that love it or not, it's seriously impressive. And for many businesses, trading successfully on Amazon is a 'north star' ambition. Very few others today can offer distribution at the level that they can.
Historically, at least, it used to be the assumption that to be an indispensable trading partner (perhaps even an unavoidable one), you needed to be a monolithic corporate player capable of throwing around its weight and grabbing all the bargaining power. A position that also takes a lot of time, risk and investment to attain - not to mention luck.
Growing up as an antitrust lawyer, with a background spanning almost 20 years (most of which broadly involved advising, structuring and defending 'dominant' international businesses), I was pretty much schooled in the notion that being an unavoidable trading partner was a highly desirable outcome for many of my clients, but often considered a dirty word by markets at large. Nobody likes the notion of being held to ransom by a heavyweight player. It got to the point that nobody in that position liked to admit it out load as a status, or even as an objective.
But it is also a fact that reaching these dizzy heights is the dream of many entrepreneurs and small businesses. Imagine being the platform or the partner that everybody wants. The 'go-to'.
And imagine getting to that position not by manufacturing the best product in the world, but, like Amazon (at least initially), by building the best platform to showcase the best products created by others. Others who are already the hottest trends or mainstays for consumers.
It's not unattainable. In fact, the solution could be closer than you think. Indeed, it's exactly what we've been exploring at elXtr. With real success.
A platform proposition does not have to be 'all-Amazon' - particularly not when it first starts out.
Whilst some may build up to the strength of an Amazon style eco-system, (where many 'feeder' components are ultimately owned by the platform itself), there are increasing numbers of industry-disruptive, consumer-beneficial platforms springing up today who have started out in much the same way that Amazon did.
Not on The High Street, AirBnB, Uber, Deliveroo, Appear Here, MyParcelDelivery and many others have more recent, similarly humble, beginnings that did not set out to own everything that they sell at every level of the supply chain.
Quite the contrary.
They in fact own as little as possible, relying on collaboration between themselves and fantastic consumer brands and propositions to propel themselves to prominence amongst the consumer 'love' and 'must have or use' lists. It's a more service-driven mentality in many ways - but one that adds tremendous more value than your average intermediary.
Making yourself indispensable is not a morally suspect objective. It never has been (even if success brings a greater level of accountability and responsibility as a result of such heavyweight influence). More fundamentally, in these times of technological enlightenment, becoming indispensable it's also easier than ever. Collaboration, savvy-vision and strong leadership are the best 'tools' you can wield.
So join us at elXtr in stepping away from the traditional ways of doing business. If platforms are indeed eating the world, wouldn't you rather collaborate, share and eat than be eaten?
I'd definitely recommend the linked article as your next read. Then give yourself time to reflect on how you could collaborate to reach new levels of business potential.
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...strategy in a networked world is different. Competitive advantage is no longer the sum of all efficiencies, but the sum of all connections. Strategy, therefore, must be focused on deepening and widening networks of talent, technology and information and we do that by accessing ecosystems through platforms. ...many firms are establishing internal venture capital operations and incubators to get in on the action. And instead of mere trying to improve bargaining power with buyers and suppliers, they are partnering with them to co-develop new products and services. Today, power is shifting from corporations to platforms and the best way to become a dominant player is to become an indispensable partner. Smart strategic moves today are not necessarily the ones that allow us to control value chains, but those that will move us closer to the center of networks.