“We are in the midst of transformative shift in business design as business models move from pipes to platforms.” -Sangeet Paul Choudary Platform Scale
So what does that even mean? And if we are in the midst of a transformative shift, are we even aware of what it is?
However, before we get to those questions, let’s imagine the quote above with the word business extracted from it. Now layer that lens upon your organization, whether that is education, government or business. Let’s see how that sounds…
“We are in the midst of a transformative shift in ________ design as ________ models move from pipes to platforms.”
And while we still have not answered what it means to move from pipes to platforms, I think it is beginning to become a bit clearer, that the design of things, from our systems to our organizations, is undergoing, or in definite need of transformation to match the speed of change in today’s world.
Let’s begin by digging into this idea of pipes to platforms that Choudary discusses in his book Platform Scale. He takes the traditional concept of the education model to describe the idea of pipes. Where he shares that, “Our education system often works like a pipe where teachers push knowledge to receptive students.” For which he adds, “There is a linear movement of value from a producer to one or many consumers in all examples of pipe businesses.”
Whereas, in contrast, he shares that “Platforms enable value creation and exchange by matching the most relevant resources from producers in the ecosystem with the consumers on the platform that need those resources.” For which he puts forth, “Platforms allow participants to co-create and exchange value with each other.”
It is this idea of pipes to platforms that gives us a much more visual view of this transformation that is spilling out across the entirety of our societal landscape. It is no longer about owning and pushing, but rather, sharing and connecting across the organizational ecosystem and beyond. It goes back to an idea that I’ve shared before…
For all intents and purposes, knowledge is no longer a commodity, as much as it is a collaborative tool.
Choudary shares in Platform Scale that there are three primary shifts as we move from pipes to platforms.
First, from consumers to producers.
Second, we a shift from resources to ecosystems.
Third, a move from processes to interactions.
As we weave our way back to the opening questions, it is becoming very apparent that we are in the midst of a truly transformative shift that is spreading virally across the entirety of society. A shift that is moving with such a ferocity and turbulence that it is engulfing everything that stands in its path. A shift moving at such staggering speed that we often fail to notice and comprehend how quickly it is changing everything we do, from how we connect socially, interact professionally, how we learn and curate knowledge, to even to how we buy and create things.
It is a much more connected world. A world that is quickly moving from pipes to platforms.
And it is disrupting our perception of everything.
“Platform scale leverages a global ecosystem of interacting producers and consumers who are always on, ever producing and consuming, and collectively have the potential to power transformative business models. As businesses move from pipe scale to platform scale, they will reduce focus on ownership of resources, which formed the basis of traditional competition, and will instead compete on their ability to facilitate interactions between producers and consumers in their ecosystem.” -Sangeet Paul Choudary Platform Scale: How An Emerging Business Model Helps Startups Build Large Empires With Minimum Investment