Disruptive Innovation: Product versus Platform

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Disruptive Innovation > Best Practices > Disruptive Innovation: Product versus Platform

Disruptive Innovation: Product versus Platform
Akshay Nirmal, Business Consultant, Australia, Premium Member
DISRUPTIVE PLATFORMS often have a bigger impact than disruptive products. Some examples:
  • Uber owns no vehicle, but is now the largest taxi company in the world.
  • Alibaba has no inventory, but is yet the biggest world retailer.
  • AirBnB owns no real estate, and yet became the biggest provider of accommodation.
Unlike disruptive products, low-end disruptive platforms can change the dynamic of an entire industry. It is more difficult for incumbents to respond to disruptive platforms than to disruptive products. The massive number of people attracted to platforms makes it difficult for incumbents to respond to them.

While DISRUPTIVE PRODUCTS offer new options to buy, disruptive platforms cause societal shifts. They have major effects on people’s lives, how they interact and how they work. For example, they trigger platform-based jobs that many people make a living out.

⇒ What other examples of platform disruption do you know of?

Singh, S. (2012). New Megatrends. Implications for our Future Lives. UK: Frost & Sullivan, Palgrave & Macmillan.
Vazquez Sampere, J. (2016). Why Platform Disruption Is So Much Bigger than Product Disruption. Harvard Business Review, April 2016.

Platform Disruptor: Google
Jaap de Jonge, Editor, Netherlands
Google owned no magazine, radio/TV station, but is yet now by far the world's biggest advertising company.

Disruptive Platforms and Pipes
Rick Mueller, Professor, United States, SIG Leader
There's been a lot of discussion on platforms, the most pertinent among which compare them to pipes. PIPES are the traditional value add orientation where value is added, marked up, and then sold. Linear value chains are pipes.
PLATFORMS (like Uber and AirBnB) are intermediaries that match makers with users/buyers. Google (as Jaap mentioned), uses its search engine and many other services to locate, evaluate and match people interested in good and services with potential providers and monetizes that in through its advertising offering, AdWords.
But that doesn't mean there is no longer a place for great products: Tesla is primarily a pipe. Because of the nature of the product it could take on some of the attributes of a platform, but right now it's a pipe. Netflix is a pipe. YouTube, however, is a platform. Ebay is a platform. PayPal is a pipe.
There are also HYBRIDS. iPods and iPhones are both pipes and platforms (the latter function brought about by iTunes and apps). Android is a platform. Microsoft Windows is a pipe.

Platform Disrutive Food Delivery
Hamza E. M. Salih, Sudan, Premium Member
All over the world including in Cairo you find so many food delivery services having no restaurants and sometimes even no vehicles to deliver the food.

Disruptive Platforms
Osungbadegun Isaac Tayo, Business Consultant, Nigeria, Member
There has been much disruptive innovation in the banking sector in Nigeria, with the advent of USSD code it is possible to carry out banking transaction even on low-end phones without an internet connection. Just with a dial and USSD Code. This platform has reduced traffic in banking halls as well as allow transaction to be done anytime anywhere even on ones bed. The USSD Code in the banking sector is an example of a disruptive platform.
However, I am more interested in reading and researching about disruptive technology in products distribution. I hope a time will come when you don't have to visit malls or physical locations to make purchases or carry out the functions of a market.

M-Pesa in Kenya
Sanjay Verma, Business, Kenya, Member
I live in Kenya. M-Pesa, a mobile money transfer platform is so successful here that we cannot imagine our daily lives without M-Pesa!
A true disruption to traditional banking services.

How will Disruptive Platforms Evolve in the Future?
benjamin, Director, Indonesia, Member
Many business types are changing into simple modern services through an Internet connection. In my view, this business model is for the time being acceptable until people who use it need quality not just a bare service only.
For example Uber etc. have little quality to offer and this business model is duplicated in many other business fields such as banking, food, and online shops. Cutting many cost (distribution, capital, etc.), high gains but low risks.
Users will adopt it for the time being, but in the long run they are still question marks.

A Platform to Enhance Authentic Quality of Experience
srinivas, Lecturer, India, Member
A platform which enables to deliver a higher quality of experience to our services and products which is based on following things may help:
1. Consideration that organization is a human entity and departments are performing the functions similar to that of human organs like that of eye, ear etc in order to improve on the quality of experience of products and services that we offer.
2. Considers the working of people as a cohesive whole.
3. Considers the software agents and humans to work in harmony based on values and system thinking.
4. Considers the evolution of the people working by having appropriate change management models in place.
5. Considers improvement in focus levels (thereby achievement of goals) in the world of distractions thereby increase in the quality levels of experience.

Benefits of Disruptive Platforms
KOEHL Maryse, Professor, France, Member
Platforms create a new type of distribution, satisfy new needs of customers and bring a break in the processes of selling of services. They modify the conditions of an offer of services (transport, for Uber and accommodation for AirBnB) and simplify the act of purchase with a direct implication for buyers.

Worldwide Sales Via Internet
Fred Rivera, Student (University), Peru, Member
Anyone can sell anything worldwide, without having a store or supplies.
That's why these platforms are used by entrepreneurs to satisfy the demands of many people.

IoT & Blockchains Next
Joanne Friedman, CEO, Canada, Member
I think we have to be a bit careful about the use of the word "platform" and its definition.
If Uber is a platform, then so is Lyft, and any other Uber, or Air BnB, or Alibaba competitor that avails itself of a shared economy business model.
I would suggest Facebook is a platform because it changed societal norms; impacts consumers, corporations and governments (societies) and has created a means to generate new value. Similarly I view Amazon in the same light; creating entirely new industries that could stand alone if Amazon or its technology was replaced.

IoT and Blockchain will be the next disruptive platforms because they will encompass whole trading ecosystems and change societal norms.

Disruptive Legal Platform
muthini, Accountant, Kenya, Member
In the US, young lawyers already don't get jobs. Because of IBM Watson, you can get a legal advice within seconds with 90% accuracy compared to 70% accuracy when done by a human.

Are Blockchains Platforms?
Bernhard Keim, Business Consultant, Germany, Premium Member
@Joanne Friedman: I have problems with regards to seeing IoT and Blockchains as platforms. IMHO they are an enabling technology.

No Lawyers Anymore?
Bernhard Keim, Business Consultant, Germany, Premium Member
@Muthini: The problem with systems like Watson is that even a correct answer is not enough if you can't interpret it. Does this sound familiar? Yes, as it reminds us of "The Hitchhikers Guide to the Galaxy". The answer to the question of the meaning of life turned out to be 42.
This is the problem even with correct answers. You need a specialist for understanding. So there will be lawyers in the future, but their job profile is changing i.e. developing.

Disruptive Platforms
Maurice Hogarth, Consultant, United Kingdom, Premium Member
I would consider that 'platforms' of their nature are disruptive, in that they disrupt the 'working mechanism', 'the way' something was always done. So I would add social networks, because of their nature, to the list. Consultants, networking and outsourcing might be seen as disruptive platforms changing how managers and organisations worked.

Special Interest Group Leader
Rick Mueller

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