The digital armageddon disrupting the real world comes as ‘Platforms’. Platform for this, platform for that. OLX, Housing.com, TripAdvisor, whatever. And platforms come with a power to disrupt existing businesses.
What is the source of this power. Not just match making.
The power is the way they empower the end user. If they just acted as match makers, the only economic value is reduced transaction value. Instead the really good platforms provide multi-dimensional surplus, which means more value to sell for an OK amount. That offers so must to the users for so little that sticking forever is guaranteed.
We’re developing a platform for Location Managers & Film production houses to come together. The three choices we had were
Build all locations data and become subscription product
Bring all location managers & production houses together and become transactional market place
Add value added tools for both location managers and production houses to provide a surplus value that ensure transaction stickiness
By creating Location Manager portfolios and allowing them to bid on new shooting schedules coming up, we ensured their ambit of opportunities expanded drastically. The production houses, on the other hand running on tight budgets and tighter schedules, can now have a certainty about their shooting locations. Too much economic surplus through the value added tools to both parties. That’s user’s creating value for other users -essence of network effect.
And a core value addition is the identification of the risk that platform can absorb better than it’s user – by bringing all location managers on the platform we ensured they are on an industry standard, and because they’re on industry standard we expect zero defaults from them for the pure reputational risk and the risk of getting banned from a business generating platform. In turn, we use this leverage to get better & uniform terms for the production houses and thus provide them stability and predibictibility. Against this predictibility, the production houses must pay upfront to ensure quicker cash flow cycles for the LMs. All sides win.
A platform investment model is therefore different from the efficiency model. Not to have all players but to make them interact in ways where the net surplus benefits all. That’s the true platform strategy executed through a good product.
My business often requires me to think on behalf of my clients. The germ of idea they’ve come up with, is often just that. A germ. It needs growing into an organism that will work, compete, grow and win. And there’s always capital constraint to build the ProductV1.0 of the idea. How do you define the right V1.0.
Many times you’re able to see a V1.0 that’s far larger than what the client thinks would suffice. If you accept client’s version, what sort of product designer are you – cause you’re not really thinking.
And, V1.0 is always in absence of proof from the market. It’s an hypothesis. If the client team is good enough to execute it correctly, then more information on product market fit will emerge during business operations. That will go into redefining the product. And that’s Product V2.0. Prodio has to continue to wear the product manager hat and track the product-market fit data and define ProductV2.0 on client’s behalf and execute this.
The vendor hat, on the contrary is quite limiting. Even if I believe your idea of V1.0 is grossly shallow and won’t take off, its none of my business. You loose your shirt, I gain some and the idea is forgotten. Almost every client we have has come to us after being hit by a vendor hat.
After a totally disastrous vacation, felt great returning to Mumbai. Sitting on my favorite wooden table, sweating off malarial fever, I’d a small discussion with a client. I thought it needed a note.
What should we build – an online market place for rented assets in a particular category or a platform to aggregate inventory and offer to customers?
Shallow analysis calls eComm portals as market models but I say it’s a closed integrated system customer is falling for. When buying –
- Customer needs price, product, substitute comparisons
- Transaction assurances – counter party guarantees, delivery time, returns, refunds etc
And the heart of buying is 2nd point- hence world got over eBay.
So, before a loose call to go for ‘asset light market model’ is taken, it’s important to understand what is at the heart of the problem you are solving. Most often it requires building integrated closed loop system to deliver that value – not just provide handshake with counter party. That time is gone.
All of us have heard of the Indian Foodtech meltdown & juicy stories of startup founder sieged by employees. And it’s some what fashionable to kick the investor’s teeth for being so stupid to throw all the money.
But trying to solve the same issue for a client who’s into deliveries on electric bikes, I formulated the problem somewhat differently.
What is the product that allows me to work with a team of ONE.
And, I think it’s this boundary condition for which product has to designed; at least in the imaginary story board.
If internet business are about creating new business categories where none existed earlier, and none existed because none was possible with that times technology or market, then why is the delivery problem still being solved with more people, capacity overhang, and traditional way of doing business where technology is just seen as enabler.
I believe when enough math is thrown at it, it’s possible to create a delivery business platform with dynamic routing algorithms & alignment of incentives where the ‘corporate’ team will be a team of 5. ceo, hr, ops, marketing & office boy.
And unless the delivery players operate on this razor’s edge, there’s no business to be created in delivery. We’re out to prove this with one of our client. We’ll share the results in time to come.
I’ve never been involved with projects that are not short of something. Time, money, patience, wisdom something.. or everything, is always short.
The the thing that’s always short is – plan.
And designing products while business is being rolled out is the most significant challenge I’ve faced. Product design requires thoughfulness, business rollout requires relentless execution. And, over a period I’ve come to acquire a few ideas in product design from extreme programming.
XP attempts to reduce the cost of changes in requirements by having multiple short development cycles, rather than a long one. In this doctrine, changes are a natural, inescapable and desirable aspect of software-development projects, and should be planned for, instead of attempting to define a stable set of requirements.
Same principle applies creates Extreme Product Design. End goals are fixed, but you’ve to reach there while meeting the market. A good product designs gives up more than it takes, but giving up while taking on clutter during business execution requires a methodical focus and product planning processes in place.
So, an org is working. In their silos — whether emails, cabins, phone extensions, buildings or continents.
But where is the org. It’s in its flow of work. As it happens. And for most layers, there’s no way to see the flow of work.
There is just abstraction of work through statistics that get reported in MIS. A lot lost in translation.
So what we do is insert a simplest layer on top with which the org emails & phones plug. Now whole org is on this layer, but everyone can see everyone, to the extent they want to be seen or shown.
And the fact of visibility creates responsibility.
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