📌 Platform Business Model Summary
A platform business model is a way of organising a company that connects two or more distinct groups, such as buyers and sellers, to enable interactions and exchanges. The platform itself does not usually own the goods or services being exchanged but provides the rules, tools and infrastructure for others to interact. Well-known examples include online marketplaces, social networks, and ride-hailing apps.
🙋🏻♂️ Explain Platform Business Model Simply
Imagine a shopping mall that rents out space to different shops and lets customers come in to browse and buy. The mall does not sell anything directly but helps shops and customers find and interact with each other. This is similar to a platform business, where the company makes it easier for different groups to connect and do business.
📅 How Can it be used?
You could build a website that connects local craftspeople with customers looking for handmade goods, taking a small fee per transaction.
🗺️ Real World Examples
Airbnb operates as a platform business model by connecting people who have spare rooms or homes with travellers looking for short-term accommodation. The company provides the website, payment system and support, but does not own any of the properties listed.
Uber uses a platform business model to link drivers with people needing a ride. Uber provides the app and payment processing but does not own the cars or employ the drivers directly.
✅ FAQ
What makes a platform business model different from a traditional business?
A platform business model is different because it does not usually own the products or services being offered. Instead, it connects people or groups, like buyers and sellers, and lets them interact. The platform makes money by charging fees, offering premium features, or taking a commission, but the main focus is on enabling exchanges rather than selling its own goods.
Why are platform businesses so popular today?
Platform businesses have become popular because they make it easier for people to connect, trade, and share services or products. By reducing barriers and reaching large audiences quickly, they create value for everyone involved. This makes them attractive for both users and entrepreneurs looking for new opportunities.
Can small businesses benefit from joining a platform?
Yes, small businesses can benefit greatly from joining a platform. It gives them access to a wider audience and more potential customers without needing to invest heavily in their own website or marketing. Platforms can help small businesses grow by handling things like payments, customer feedback, and logistics.
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