Are You a Platform, or a Plank in Someone Else’s?
In this month’s issue of the Harvard Business Review, platform businesses are described as those that “bring together producers and consumers in high-value exchanges. Their chief assets are information and interactions, which together are also the source of the value they create and their competitive advantage.” Sound familiar?
In 2007, Apple had no market share in mobile phones. So, how then did the Apple iPhone generate 92% of global mobile phone profits in 2015? Because Apple created a platform that connected two important groups – app developers (the producers) and app users (the consumers). They delivered value for both with a seemingly conventional product. Their products are elegant, well-designed interfaces connecting you to your own customized ecosystems (entertainment, banking, shopping, communications, etc.). For example, your iPhone connects you with producers such as Uber, Spotify and Facebook.
The race is on to be the industry platform across each formerly vertical sector of the economy. Platforms unite and integrate ecosystems. Google is the information platform; Facebook is the social platform; YouTube is the video platform; and Amazon is the retail platform.
Associations have great potential to be platforms connecting ecosystems of consumers (members) and producers (business partners seeking to efficiently market, sell and add value to the members). Add to the equation that you also deliver education, information, advocacy and a shared community, and you have many of the key ingredients to becoming a platform.
The challenge is that associations are designed in almost exact opposition to the platform model. Specifically, platforms are successful because they optimize external interactions within and among entire industry ecosystems, creating an open architecture, not a walled garden. They are inclusive, they reduce barriers to participation and they focus on creating more value through optimization.
In contrast, associations focus so heavily on member value that overall ecosystem value is often not the priority. Member-focused association models seek to add value primarily to those who are members rather than applying an equal weight to the producers, suppliers and business partners in the ecosystem. A transactional buy–sell model is no longer going to be competitive in the landscape of other organizations that pursue the entire ecosystem and build a platform that effectively harnesses the power of the network.
Imagine if your association looked out at the ecosystem and viewed the industry holistically, not just through the lens of members, non-members, exhibitors, sponsors, legislators and policy-makers. Imagine the customers served by your industry, philanthropic organizations serving those most in need within your industry and adjacent economies served by your constituents. How would you add more value, create more connections, advance the interests of all parties and, in turn, better serve your core audience?
Consider traditional member benefits such as education, trade shows and conferences – they must change and adapt to the new rules of the platform. A new equilibrium must be achieved to bring a broader constituency into the fold – new partners, previously competitive associations and new start-ups that typically wouldn’t be on your radar.
If you were building a platform today instead of a member-centric association, how would you design it? How would you monetize it, and who would be on your board? How would you win? The good news is that associations have a 100-year head start – an established network, economic power, brand value and convening authority. To see the power of the platform (and how this new open architecture approach can transform your organization), the pivot must occur at your leadership and board level. I hope you’ll share this idea with your fellow leaders and consider how your association can become a twenty-first-century platform.