Digital Transformation and platforms

Digital transformation and platforms

February 10, 2022

Increasingly, established organisations are embracing platform models – often to complement their existing activities. With the help of platforms, entire sectors and industries are going digital.

Jennifer Schenker, Founder & Editor-in-Chief, The Innovator, Christoph Heyn, GVP, Product Management, IKEA, Marie Taillard, Professor, ESCP Business School and Thibault Remy, CEO, Meilleurs Agents, debated on the role of platforms as part of a digital transformation strategy at the Platform Leaders event on the 24th of November 2021.

“Most companies have figured out by now how to digitise at least part of their business operations and service offerings, but many are struggling with what might be called ‘digital transformation 2.0’ – if and how to leverage digital platform and ecosystem models for their industries,” says Jennifer Schenker, founder and editor-in-chief of The Innovator, a leading publication on digital transformation.

Companies have watched platforms succeed but face challenges in developing their own platform strategies. “Seven out of the top 10 most valuable companies globally are now based on a platform business model,” Jennifer says. “Companies like Apple, Google, Amazon, and Alibaba have used the model to grow exponentially and grab significant market share from established firms.”

Now, according to Jennifer, many businesses are asking: “how do I create a core platform that will deliver on the promise of exponential growth?”

“Experts say established companies have the chance to create platforms of their own or become part of another platform’s ecosystem,” says Jennifer, “but every firm needs to understand platforms and figure out their place.”

Choosing the right platform partners

IKEA, for one, had an established history of over 75 years in retail. The company is one of the biggest shopping centre businesses in the world, with 45 shopping centres globally and 370 million annual visitors.

Christoph Heyn, GVP of Digital Product Management at IKEA, traces the roots of their current digital platform approach to the analogue platform model they adopted in the 1970s.
Back then, it was about “bringing customers to a place that they’re interested in.” IKEA saw itself as a “very integral central part of that, […] with the long-term idea of investing into something that will give us durable visitation,” explains Christoph. “[Platforms] are not a recent concept, but something we’ve built on for many, many decades quite successfully.”

More recently, IKEA has expanded their platform approach into the digital space. In 2017, they acquired TaskRabbit, a peer-to-peer services company that is now integrated into IKEA’s core business. “TaskRabbit has really been a great addition,” Christoph says. The collaboration has created benefits for IKEA, TaskRabbit, and their shared customers, which he thinks is important for the success of any such partnership. “It has to provide benefits tangibly for all three parties: for the partnership ecosystem, for the orchestrator, and for the customer. It needs all three.”

Christoph also sees many possibilities ahead for how platforms could enable other initiatives at IKEA. “We announced that we’re planning to be fully circular by 2030,” he says. “We see the opportunities of platforms, both for us in our own transformation, but also in allowing our customers to live a much more sustainable life at home.”

Engaging with existing communities

Dr. Marie Taillard, professor at the ESCP Business School, agrees that platforms offer interesting collaborative possibilities. “We’re moving more and more towards ecosystems where there are new win-win opportunities for all different participants,” she says. “I think there are lots of ways in which partners can contribute to an ecosystem, without being the orchestrator.”

One example is the subject of Marie’s forthcoming whitepaper: LEGO and their LEGO Ideas platform as a case study on building a community-based ecosystem.

Despite their long-standing brand as a maker of children’s toys, LEGO has many loyal adult customers. “There’s a community there that’s ready, excited, passionate, and wants to contribute,” Marie says. On LEGO’s side, open innovation has become a key part of their business strategy. “They need to compete with new products, new ways of thinking about play, new ideas and so on,” adds Marie.

To tap into their enthusiastic community and foster innovative thinking, LEGO created LEGO Ideas: a platform where their grown-up fans can submit ideas for new builds and models. Creators whose ideas get 10,000 votes from other fans can then submit their builds to LEGO for product development consideration.

“It’s a really interesting model,” Marie thinks. “They haven’t had to deal with the sort of typical network-effects challenge because the community was there and ready.” Instead, the platform has given rise to other interesting dynamics.

The community members had pre-established ways of interacting before joining the platform. Marie and her co-author, call this a ‘community logic.’ “They’re interested in belonging, building together, having fun together, challenging each other, and supporting each other,” she explains. LEGO, however, is evaluating the marketability of the community’s product ideas, using what Marie calls ‘market logic.’

An understanding of these different mindsets is important for platforms like LEGO Ideas to succeed. “When you’re tapping into a community […] they’re going to come into the platform with a different mindset, expectations, norms, and ways of doing things,” Marie cautions. “Brands should be aware of that.”

Identifying platform possibilities

Maximising platform capabilities is something that Thibault Remy also knows well. Thibault is CEO of MeilleursAgents, a French digital platform that connects individuals with real estate projects and agencies.

“At the beginning, we did not know we were a platform,” Thibault smiles. Only when co-founder Sébastien de Lafond described their company as a ‘bridge’ between individuals and agencies did the company recognise what they were really trying to achieve.

Back in 2016 when they began to understand and hone their platform business model, MeilleursAgents had to think about how they looked at their two main interest groups. “On one side, we had already succeeded in being the go-to destination when it comes to online estimation tools for individuals,” Thibault remembers. “But on the other side of the platform, we had only 600 agencies out of 25,000 in France.”

With all this in mind, MeilleursAgents identified a concrete goal: attract more agencies to their platform. The result was a striking ‘flywheel’ network effect:
● more agencies on the platform led to better data about properties and pricing,
● better data meant that the platform could improve their recommendation models and create better experiences for consumers,
● better experiences for consumers attracted more individuals to the platform,
● and more consumers on the platform attracted more agencies, repeating the positive cycle.

In Thibault’s view, “it’s not for every company to be a platform.” But in the case of MeilleursAgents, embracing a platform model unlocked major growth. “It opens you up to so many improvements and levels of growth when you see your business as a platform,” he says.

Platforms as part of a digital transformation strategy

As experts in digital transformation, Christoph, Marie, and Thibault have a wealth of knowledge to share. These platform leaders have several pieces of advice for businesses considering making a platform part of their digital transformation strategy:

1. Focus on building expertise. In Thibault’s experience, investing in their R&D department was key to MeilleursAgents platform success.
2. Understand your role as orchestrator. Christoph knows that orchestrating platform ecosystems “ is a constant process and will need to always be revalidated over time.”
3. Connect with the needs and goals of participants. Marie’s advice is to “think about the range of problems that are being solved for different kinds of stakeholders.”
4. Look for ways to kickstart positive network effects. Christoph suggests asking yourself, “What is that first tangible customer experience challenge that you can really turn around?”

And Jennifer emphasises both the possibilities and the urgency: “Platforms represent a big change in the way industries have traditionally been organised, and first-mover advantage is important in an environment where the winner often takes all.”


To go further 


This panel with Jennifer Schenker, Christoph Heyn, GVP, Marie Taillard, Professor, and Thibault Remy was part of the Platform Leaders event organised by Launchworks & Co on the 24th of November 2021 (full list of speakers and agenda). To watch the full event, play the video below.


The Platform Leaders initiative has been launched by Launchworks & Co to help unlock the power of communities and networks for the benefit of all. All Launchworks & Co experts live and breathe digital platforms and digital ecosystems. Some of their insights have been captured in best-selling book Platform Strategy, available in English, French and Japanese.

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The Platform Leaders initiative has been launched by Launchworks & Co to help unlock the power of communities and networks for the benefit of all. All Launchworks & Co experts live and breathe digital platforms and digital ecosystems. Some of their insights have been captured in best-selling book Platform Strategy, available in English, French and Japanese.