Jan Bosch is a research center director, professor, consultant and angel investor in startups. You can contact him at jan@janbosch.com.


Platform lesson #10: One ecosystem platform stakeholder at a time

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Although platforms can be used purely for internal purposes, many reach a point where they’re opened up to third parties, becoming an ecosystem platform. Ecosystem platforms serve, by definition, two- or multi-sided markets. This means that you have multiple stakeholder groups to support to make the platform successful.

When thinking about ecosystem platforms, I often distinguish between the ‘operating system’ class of ecosystems and the application-centric class. An operating system ecosystem needs to be built up by encouraging app developers to provide content and users to use the content. But both stakeholder groups have no interest in the platform until the other group is sufficiently large. In this case, you have no choice but to fuel the ecosystem by heavy investments in paying app developers to create content for a tiny user base in the hope that this content will entice new users to join and existing users to stay. As you can imagine, it’s very hard to achieve this stage and there’s a winner-takes-all pattern in the industry as the network effects are extremely strong in these types of ecosystems once you get to the ‘ignition point’ where users and app developers join the ecosystem without needing to be encouraged by you.

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