by Anant Patel
Facebook. Amazon. Expedia. Booking.com. What do these companies have in common? Besides being incredibly successfully, they all offer something beyond just a product – a platform. Customers are enticed to engage with these companies in order to have an experience – whether that’s connecting with friends, finding the perfect book, or creating a travel plan from research to booking.
Interaction & Partnerships
As these companies, some of the most successful in the world, demonstrate, the platform business model is rapidly replacing the once ubiquitous pipe business model. In the pipes model, businesses create value and then send it downstream for customers to consume. The customer doesn’t have much say in what is produced. In the platform model, however, customers, partners and other businesses play a critical role in creating value. Imagine Facebook without your “friends” or Amazon without reviews. The interaction and contribution of different groups of people make the platform what it is.
Another key trait of platforms is innovation. Since the platform is centered around the customer experience, it is critical that the experience is the very best. That requires constant innovation to stay on top of, and ahead of, both customer desires and the latest technologies. From user interfaces to back-end algorithms, platforms are constantly pushing the envelope to provide a unique and seamless experience for its users.
The third trait that defines platforms is the ability to scale at speed. If a platform can’t grow as fast as its customer base, another platform is bound to take its place. Successful platforms must ensure that their technology can scale and also that their product offering can evolve. This can be done in two ways: by investing in technology and talent, and through the acquisition of companies that enhance the offering. As one example, Booking.com started out as a hotel website. Now, through strategic acquisitions, they have a portfolio of six brands that offer customers the full suite of travel offerings, from hotels to flights to car rentals and even restaurant reservations. CEO of Booking Holdings, Glenn Fogel, has been vocal about wanting the Booking brand to be synonymous with travel for consumers and the go-to place to research, book and buy travel.
Partnering With A Platform
So how can your business benefit from learning about the platform model? First, you may consider how to incorporate the three traits of platforms into your business – interaction and partnerships, innovation, and scalability. Second, you can consider partnering with an established platform.
Platform companies are beneficial to partner with because they have a vested interest in making their platform the best it can be, which means you can focus your energy in other places. Companies that partner with Expedia get visibility, marketing, and global reach. A company listing its product on Amazon gets access to their customers, and also their technology platform, search functionality, and the expertise available to a billion-dollar company.
A Platform For Payments
Just as Booking.com aims to be synonymous with travel, WEX strives to be the platform where businesses go for all things payment. As a payment platform, WEX goes beyond a product offering and provides a solution to maximize its customers’ payment strategies. Just like Expedia and Booking.com, WEX harnesses the power of platforms to provide an experience built around the customer, informed by the customer, with heavy investments in innovation, and an eye toward scaling at speed.
WEX does this by focusing on these key areas:
- Expertise: WEX has unmatched industry expertise and the strategic know-how to guide each customer to a best in class payment solution.
- Technology: WEX invests in and owns its technology platform so it can fully control and evolve the platform to meet ever-changing needs.
- Agility: From ensuring we have the currency and issuing capabilities to enable truly global payment strategies to building robust product optionality and expanding our partnerships to achieve maximum acceptance at best cost, we are one step ahead of the rest.
The real value in partnering with a platform like WEX or Facebook or Amazon is that you’re not buying a static product that will soon be outdated. You’re partnering with an expert in the field who is dedicated to being best-in-class, an early-adopter, and who puts the customer at the center of its offering. That is the power of a platform.