The nature of business is changing. Rather than one-way production lines that deliver goods to consumers, future-proof enterprises offer platforms for users to co-create products and services with them.
“No doubt that businesses worldwide are all undergoing a strong transformation these days,” he says. “In the age of interconnectivity the new frontier for businesses is being built around tribes, communities and shared interests.”
Based on Alex Osterwalder’s Business Model Canvas, Cicero’s Platform Design Canvas helps organizations grow around two classes of interacting entities: the stakeholders who cooperatively grow, maintain and adapt the platform, and peer users who interact on the platform with different, but potentially overlapping, roles.
Shareable recently chatted with Cicero about how to use the Platform Design Canvas and how it can help grow the sharing economy.
Shareable: For those who aren’t familiar with the Platform Design Canvas can you explain why it’s a useful tool.
Simone Cicero: The Canvas is useful as it helps you design complex things such as companies, organizations, products, services, more like multi-sided platforms than linear things. In the age of interconnectivity each of the players that interact with an entity can have a role in a complex value creation process. That’s how the Canvas helps: understanding and optimizing this process and growing around it.
The Platform Design Canvas is very balanced visually. Can you explain why it’s laid out in such a manner? How does one read a finished Canvas?
As you know, the Canvas is a fork of the very famous Business Model Canvas, primarily released in the creative commons by Alex Osterwalder. That tool was a milestone in business model design, and many people, including me, still use it when dealing with linear business design.
The structure of the Platform Design Canvas is inherited from the Business Model Canvas since at the time of the first release, I wanted something people could easily understand, even if only for the cognitive reason that they had already seen a tool like it. There’s a suggested step-by-step process to fill in the canvas, but there’s no special way to look at it. It just gives you the big picture in a way that can be improved.
How does the Platform Design Canvas help to enable the shift from consumer-centric businesses to community-centric platforms?
Respect to the Business Model Canvas, the Platform Design Canvas introduces a few aspects that are strictly related to shared value. The left side of the canvas is entirely dedicated to community dynamics and, in fact, hosts the Community Support Services section: a section dedicated to the actual services that the Platform Stakeholders run in support of a healthy community exchange. Furthermore, the canvas introduces the concept of Peer Segments that, different from the concept of Customer Segments, implies some level of peer to peer exchange between users. Exchanges are transactions and eventually could be authentic relations. There, you have communities.
What kind of knowledge about a community can the Platform Design Canvas provide?
You can gain a lot of insights. First of all, thanks to the Canvas and the overall Platform Design Toolkit, now including also a Motivation Matrix template you could understand the roles and motivations of the members of a community. Then you can understand how, in a community, value is being created and how this is exchanged, in what forms and through what channels. At the end you can grasp the overall healthiness of the community, and design to make it thrive.
How is the Platform Design Canvas being used within the collaborative economy? Can you give us an example of how it serves the sharing movement?
I should ask you a question maybe: what’s the sharing economy? I think we don’t really know yet. On the other hand, we know that we live in an age of interconnectivity and access to tools that gives everybody the power to create and co-create value, not only sharing idle resources. But that’s the point: any given working ecosystem is based on interactions and the so-called sharing economy, whether collaborative consumption, a p2p marketplace or an open source software project, is designed around interactions. That’s why the toolkit is needed.
The Canvas focuses on brainstorming sessions. What’s the importance of these sessions? How can they help businesses transform into platforms?
I would say that in general, facilitation, co-creation and workshops are the new keys to consulting and coaching. When I face a customer or a partner challenge I always try to adopt co-creation approaches because the real knowledge about the context is in the people that run the business itself. It’s the human factor in a way, it’s always about human potential and motivation. As Joe Justice once told me, “Morale is a multiplicator of productivity.” Once you’ve co-created the strategy then you can move forward from there, but to do it you need to understand the landscape by applying analytic tools like the toolkit.
A good deal of emphasis is put on the interaction between stakeholders, community and peer segments. Is this interconnectedness the heart of the platform?
In a way, you’re so right. The point of platform thinking is exactly to enable interconnectedness because these bonds are the ones that generate long term effects and resilience. If you’re the owner of a platform and you succeed in generating these bonds, you’re pretty safe from disruptions in the mid-long term because interconnections are value exchanges and people are attached to value.
Once the brainstorming is completed and all the boxes filled in, how do we interpret the Canvas? Please talk us through what the end goal of the Platform Design Canvas is and how it is used.
Usually the Canvas walkthrough is preceded by the identification of peers and stakeholders using various facilitation techniques, and later by the application of the motivations matrix. At the end you’re able to fill in the Peer Segments, Platform Stakeholders and, since you investigated also intrinsic motivations, the value proposition of the platform.
From there you should move to analyse transactions, channels and value exchanges in terms of who gives to whom, in what forms and throughout which process, and focus on creating new channels if needed and trying to understand what currencies of exchange are used in addition to monetary exchanges.
Lastly, you move on with the analysis of the platform as represented by a set of core tangible and intangible resources and a bunch of services that could support community value creation.
Once you’ve done that you can think of the best ways to extract value, fairly, from the platform, in exchange for maintaining this machine, running it and innovating it.
Simone Cicero at the Frontiers of Innovation, discussing the Platform Design Canvas
Cicero created a detailed step-by-step guide to using the Platform Design Canvas. Below, he provides a brief overview:
Step 1 – Identify the Value Proposition: the value proposition is about solving people’s problems and is therefore tied with the intrinsic motivations of peers and stakeholders to participate. In a marketplace, for example, the value proposition is often related to the ability to monetize intellectual assets, skills or resources.
Step 2 – Enumerate Platform Stakeholders – from previous analysis
Step 3 – Enumerate Peer Segments – from previous analysis
Step 4 – Identify Key Transactions: the identification of ongoing and possible transactions between peer segments
Step 5 – Identify existing and required Channels: a crucial step of identifying if existing channels are sufficient to model the existing transactions or if new channels have to be created
Step 6 – Analyze Value Exchanges: Platforms exist to facilitate value exchanges between peer segments (take note of the form of value exchanged, it helps make it tangible).
Step 7 – Identify Key Platform Components: tangible components of the platform: may be simple tools (e.g. software development IDEs in software development platforms), physical spaces and infrastructures or others.
Step 8 – Identify Key Community Support Services: support services needed to facilitate the emergence of quality, enable discussion and confrontation on future changes and can generate powerful innovation dynamics.
Step 9 – Analyze Value Extractions: once value is created it can be fairly extracted by the platform owners, in exchange of the services and components that the they provide.
For more information on the Platform Model Canvas, the Platform Design Toolkit and more of Cicero’s work, visit Meedabyte.com.