Does your company offer a product you refer to as a platform? If so, you are part of a growing trend and buzz among ed-tech industry managers. It’s a development that begs a few questions: How many platforms can our industry support? Which companies have what it takes to lead the platform charge? And, since there is more than one definition of the “P” word, are we all speaking the same language?
There are lots of platforms out there. There are political platforms, structural and positional platforms. Anything supportive that you could build upon could be a called a platform. Let’s cut to the chase. I think most managers in our industry are touting digital delivery platforms. To be clear, digital platforms that serve the K-12 market are the focus of this short article. What follows is a ten-minute read, an introduction (or a reminder) of how to set your company on course toward a platform leadership position. Whether you are selling a platform or not, taking a little time to understand this topic is important because platforms are front and center at this transformative stage of the education industry. You can’t miss it. The “P” word is popping up everywhere!
What are digital platforms? They are complex solution “enablers” that realize their value when the core functions they deliver are combined with complementary products and services made by a variety of companies. And history suggests that achieving platform leadership is not as simple as calling a product a platform. Likely, it will require you to rethink your notions about which external players might be included in your portfolio. For nearly a decade, researchers at MIT Sloan business school have unpacked several cases and done win-loss analyses. They’ve concluded that platform marketing is different than selling products. I’ve been following their work for many years with great interest because my own experience echoes their findings.
I was on the platform battlefield twice. In the late 1970s I managed a consumer electronics retail store. I was responsible for deciding what products we would stock and promote. I had to choose sides in the emerging videotape platform war. Would it be Betamax, the superior technology, or VHS, the emerging platform leader? I went with the winner, VHS.
Later, as a manager at Apple, I was selling the best technology and was sure I was on the winning team. I spent my days convincing software developers and PC buyers that the Macintosh was superior to Windows. Ultimately, as you know, Microsoft trumped Apple. If Sony and Apple had the better technology, why did VHS and Windows dominate? How does a company win a platform showdown? And, if you are a product developer, which platform do you align with?
I’ve been pondering these important questions again, as I find myself in the midst of a flood of platforms in the ed-tech space this year. I considered the outcome of the platform battles I participated in before and again reviewed the platform case studies. I agree with the answers provided by many marketing gurus and growing evidence supported by the research. There are reasons that predict why some platforms win and others lose. What’s more, there are success pathways that aspiring platform leaders can follow. What does history teach us about strategies that lead to platform leadership? What’s different about marketing platforms compared to products?
A few basic principles have emerged. First and foremost, unlike products, achieving platform dominance is not about winning a features-war. Technical superiority is no assurance of platform success. Also clear is that there are fewer platforms than products. Can there be multiple delivery platforms within the K-12 market? Yes, but it is too early to know for sure how many because there is a great deal of uncertainty about how fast and in what ways the print-to-digital shift will unfold. What we know for certain is that the education market is very competitive and will likely become more so given the opportunities in the midst of this paradigm shift. Also suggested by the case studies is this: playing on the platform field is a higher-risk game than competing in the applications software space. There are more losers than winners. How do you stack the odds in your favor?
Look at the key strategies compared in the table below to ignite your thinking:
Beyond the comparisons highlighted by the table I created, Annabelle Gawer, consultant, platform researcher, and author of books on platform leadership, suggests that a company of any size can become a platform leader. Size may be an advantage, but it can also be a disadvantage. The case studies point to certain business and technology decisions that are better predictors of success than company size and to related strategies that consistently help platform-leader wannabes achieve their goals.
Is the Ed-Tech Industry Ripe for a Platform Bid? Are You?
I am convinced that the educational technology market is no different than other markets. We are now in the midst of a paradigm shift — a time when strategic blindness sometimes prevails. I predict that Gawer’s advice* about the proper pursuit of platform leadership will hold true for companies in the ed-tech industry. Those companies that want to dominate the digital delivery platform space are well advised to develop and execute distinct competitive marketing and sales strategies that will converge to form an "ecosystem.” The value of this economic community is propelled by a matrix of interrelated products that solve problems for customers and also energize a logarithmic value proposition to all the stakeholders. As more and more users adopt the platform and its complements, the value of the innovations that make up the system grows. Consider for a moment the massive ecosystem and financial impact that has been created around just one platform: Microsoft Windows. Thousands of companies, products, shareholders, and hundreds of millions of customers have created a massive enterprise that has approached monopolistic proportions. Apple’s iTunes is another.
Though the road to a sustainable platform leadership position is well traveled, research shows that senior managers often ignore the rules of the game and fail to turn their products into industry platforms. My concern for many in the ed-tech industry as they rush to put their platform chips on the table is that for most of them, their bench strength and comfort is in developing applications-specific products and using incentives to sell product features to end users, mostly at trade-show booths and with direct channels. Much of this is done with a limited view or consideration of competition. The greatest weaknesses across our industry are strategic marketing (competitive differentiation) and channel marketing. Both of these competencies drive the creation of highly-leveraged scalable businesses that can rapidly adapt and expand based on customers changing requirements without long development cycles and capital-intensive investments.
There is much more to this topic than I have the time to address in this short article, but my hope is that you will use the questions I’ve posed to spark a discussion among your management team. If your company is offering a platform, ask yourself if your team has the experience and understanding of platform sales and marketing to succeed. Look at the competitive landscape and see what companies and leaders may be emerging and why. Listen to the interview with Annabelle Gawer on SellingToSchools Radio. Study the research. Then, make plans to make your competitive moves. With some smart strategic decisions and a bit of luck, your company and platform may be come the next market leader!