2020 MIT Platform Report

MIT Initiative on the Digital Economy
Platform Strategy Summit 2020
Plaforms adapt
to survive

2 / MIT IDE Platform Strategy Summit 2020
Put to the test
In 2020, the resolve of platform markets—like every other
business sector—is being tested in real time.
03 Overview
04 Siemens assembles a platform future
05 The super-app economy
06 Telemedicine takes a giant leap ahead
07 Ping An’s evolution from finance to platforms
08 Despite the pandemic, the show must go on
09 Tales from a platform pioneer
10 Action items
Digital platforms:
It’s how business operates
in 2020
From Uber rides to Grubhub food delivery,
Spotify entertainment to online healthcare,
digital marketplaces are increasingly
offering new products, services, and
networking.
Nevertheless, the current economic crisis
is testing the resiliency and mettle of these
innovators like never before. Since the
COVID-19 pandemic—and the resulting
economic nosedive—platform models are
being tested.
The question is: Can disruptors like Airbnb
pivot as quickly as they began? Which
platforms will grow and which may fail?
Is this the time for traditional industries to
MIT IDE Platform Strategy
Summit 2020: Where we’re at
and what’s ahead
At the 2020 MIT IDE Platform Strategy
Summit in July, emerging and incumbent
platform leaders discussed their strategies.
The day-long Summit, with more than 900
virtual attendees, featured experts from
several fields and industries.
“We’re living in a platform economy,” said
Peter Evans, manager partner at the Platform
Strategy Institute and a conference co-chair.
“But digital markets are also volatile and
tremendous challenges loom.”
Evans noted that an onslaught of new models
are emerging due to the pandemic. “We’re
moving from obvious to more complex
ecosystems, where multiple platforms merge
Key takeaways
1
Platforms will become more resilient,
especially compared to incumbent firms,
because of their ecosystem design and
network effects.
2
When production takes place largely
outside of the firm (the “inverted firm”),
the business is adept at working with a
diverse set of changing partners.
3
The agility advantage allows platforms
to more swiftly switch to new partners
and new customers, when the need arises.
View videos of the 2020 MIT
IDE Platform Strategy Summit
As platform business
models—and the technology
stacks needed to run them—
become widely understood
and available, talent has
become the next frontier of
the platform economy.
ramp up their platform capabilities?
into one. It’s exciting, but you must know how
to lean into platforms to create new value to
old products and services.”

3 / Overview
A bird’s-eye view
Summit co-chairs analyzed platform market trends
unfolding in a chaotic environment.
Recalibrating supply and demand
The rise of platform professionals
Platform vs federated platform vs
product on a platform
Market
transform?
Resources
to tip
market?
Control
customer
relationship?
Product/service
Coalition
resources
to control market?
Federated platform
Product/
service
on platform
“We’ve seen both precipitous demand drops as well as explosions in
platform markets,” said Geoffrey Parker.
Among those riding the wave are Amazon, which is experiencing
market cap gains in the range of $400 billion and Zoom, which posted
a revenue increase of 355 percent in the second quarter of 2020.
“We’ve also seen huge disruptions in the finance and energy sectors
where market losses have been up to $130 billion,” he said. In-person
dining at U.S. restaurants has shriveled, and ride-sharing platforms
experienced immediate declines when lockdowns were ordered.
“The pandemic clearly has had different impacts across sectors.”
On the supply side, winning firms made end-to-end digital connections
that allowed them to quickly pivot to meet new customer demands.
“The business model is how you realize revenue, and the operating
model is how you deliver value,” said Parker. “These need to be correctly
matched to one another.”
Geoffrey Parker
Professor, Dartmouth
MIT IDE Digital Fellow
Platform Strategy Summit Co-Chair
Three common responses to the COVID-driven crisis
Weather the storm
Go into resourceconservation
mode
Rapidly pivot
Take assets into
other markets
Ride the wave
Demand explodes,
hang on for dear life
Peter Evans forecasts high demand for platform talent and the rise
of platform professionals during the pandemic. “A key component to
successfully launching and running platforms is the talent you bring to
execute on those strategies,” he said.
The key roles that firms are seeking to fill include platform strategists,
product management, ecosystem managers, engineers, data managers,
and privacy and compliance experts.
“Applicants need deep technical expertise, but also broad
competencies,” Evans said. “It’s extremely difficult to find one person
that can meet all these capabilities.”
A significant question—especially for larger companies on the hunt for
platform professionals—is whether to groom from within or recruit from
outside. For example, Nike recently hired a seasoned platform executive,
former CEO of eBay, as its new CEO.
Peter Evans
Managing Partner, Platform Strategy Institute
Platform Strategy Summit Co-Chair
Demand for platform talent during the COVID-19 pandemic
Replenishers
Companies trying
to meet demand or
replace employees
lost through attrition
Builders & startups
Companies hiring
to build their
workforce
Incumbents
Legacy companies
that need talent
to drive platform
strategies
Firms will need to design organizational structures and functions so
that platform capabilities, including strategy, project management, and
ecosystem management, become embedded in the organization.
Platform
To platform, or not to platform
Marshall Van Alstyne explained when it makes sense to become a
platform and when to be a product on someone else’s platform.
When a market is evolving to a platform, a firm must consider whether
it has the resources to tip the market and whether it can control the
relationship with the customer. If not, it may need to partner to offer a
jointly controlled or federated platform.
Van Alstyne also presented research introducing the notion of “intertemporal”
network effects, or the value that users create for other users
that lasts through time.
This model helps explain the success of firms like the Chinese shopping
platform, Meituan, versus the relative lack of success of Groupon in
the U.S. “Despite having identical business structures and the fact that
Groupon had a two-year head start, Meituan designed network effects
that kept interactions on-platform and created more spillover value,”
Van Alstyne said.
Marshall Van Alstyne
Professor, Boston University and Visiting Scholar,
MIT Initiative on the Digital Economy
Platform Strategy Summit Co-Chair
Drawing on principles of information economics, van Altsyne presented
new research on how social media platforms can reduce the lies in
political advertising. Read the report.

4 / Keynote: Manufacturing Perspective
Siemens assembles a
platform future
Siemens AG is among a group of industry leaders that
is actively pursuing platform projects.
Dr. Roland Busch
Deputy Chief Executive Officer and CTO, Siemens
Siemen’s Railigent platform uses sensors to monitor trains within its ecosystem.
While most of the splashy headlines
about platform firms involve digital
native players, much is brewing behind
the scenes at traditional firms.
Siemens AG, the German-based
industrial company with a revenue of
$86 billion worldwide and a workforce
of 385,000 employees, is among a
group of industry leaders that is
initiating several platform projects.
Dr. Roland Busch, CTO and deputy CEO
at Siemens, explained how the company
combines the physical and the digital
worlds, and how platform strategies
are being integrated. “We are preparing
software be decoupled, industries
will change from linear to networked
value chains.”
Busch also oversees Siemens‘ venture
capital arm, Next47, which is involved
in artificial intelligence, cybersecurity,
carbon neutrality initiatives, and Internet
of Things (IoT).
The market for IoT is expected to
reach $11 trillion by 2025, according to
forecasts, and Busch said B2B would be
70 percent of that. The potential of B2B
platforms, therefore, could exceed B2C
offerings by then.
is already monitoring and connecting
railroad sensor data to measure their
activity and status. Railigent is a
software-as-a-service platform that will
soon bring competitors and suppliers
into the ecosystem for mutual benefits
and value.
“We can predict as far out as 10 days
which door in a train is going to fail and
why,” said Busch. “This gives us the
opportunity to run our assets with 100
percent availability and to detect failures
before they occur.”
Another example is Mendix, a no-code/
low-code application development
resources than traditional approaches.
The platform has grown to more than
750 customers across 25 industries,
universities, and developers.
Platforms are nonlinear, they’re
networked, and the highest value lies
outside the firm, said Busch. “We have
to train people on platform ecosystems.
We all have to relearn business models
and revamp our culture.”
“This is how an inverted company
operates, and we have to learn that
lesson. It’s not in the current DNA of
our managers. If we really want to
The industrial
Internet of Things
will unleash the
next era of growth
and innovation
by combining the
physical and the
digital worlds.
for the disruptive changes of Industry
4.0,” he said. “Not only will hardware and
Railigent, Siemens’ open platform
B2B ecosystem for rail applications,
platform that can build applications up
to 10 times faster with 70 percent fewer
play in the platform game, we have to
understand the mechanisms behind it.”
Dr. Roland Busch
Siemens AG

5 / Developing Markets
As general partner at Andreessen
now provides access to street
event platforms, including Run the
The super-app
Horowitz, Connie Chan studies
developing markets to identify
vendors, food delivery, and news
companies—all from one screen.
World, a venture that Andreessen
Horowitz has a stake in.
economy
Super apps—or apps that combine several mobile
platform investment opportunities.
The venture capitalist predicts that
mobile ‘super apps’ will find their
way to Western markets within
the next five years—and perhaps
become as ubiquitous as in China.
Chan maintains that the rise of
single sign-on, frictionless apps
is inevitable. The goal for
businesses is to use low-margin—
but high frequency or long-term
user experiences—as a way to
“Run the World will bring likeminded
people together online,”
said Chan. “Participants can learn
from experts and connect in a way
that feels natural, safe, and fun,
while maintaining professional
experiences—will soon be the new norm.
Connie Chan
General Partner, Andreessen Horowitz
“China is not only a mobile-first
society, but really a ‘mobile-only’
society,” said Chan. “Apps are
accepted more easily there.” She
expects these apps to spread
widely, especially as mobile-only
users become the norm.
generate leads for new, highmargin
user engagement.
The mobile and online payment
platform Alipay offers services that
may appear unconnected, such
as fund transfer and third-party
services. Yet the app allows users
and personal connections.”
She noted that online
conferences are indispensable
and that it’s critical to emulate
side conversations and build
relationships for those with
common interests.
Connie Chan doesn’t anticipate that
privacy concerns will restrict growth.
Chan noted that the rise of super
apps like WeChat, which combine
several mobile services for a more
streamlined user experience, will
burgeon globally. WeChat started as
a consumer messaging app that
to seamlessly access municipal
services, pay utilities, buy movie
tickets, or book a hotel room. As
a payment platform, it can scan
a barcode instead of requiring
separate order and pay functions.
Chan is also bullish on new
All of these technologies depend
on robust data banks to boost their
impact and to help personalize
user experiences, but Chan doesn’t
anticipate that privacy concerns will
restrict growth. She predicts users
in the U.S. will adopt the apps as
opportunities for online social and
long as they offer significant user
value and convenience.

6 / Healthcare
Telemedicine takes
a giant leap ahead
The COVID-19 pandemic is forcing the healthcare
industry to embrace virtual care.
John Halamka, M.D.
President, Mayo Clinic Platform
New professional roles may be needed to help patients navigate online technologies.
Healthcare is a prime example of a traditional
that nearly 40 years of halting efforts in
same outcomes at lower costs and with
sector experiencing major platform strides
telemedicine were condensed into 12 weeks.
greater ease of use for patients.”
during the COVID-19 pandemic.
“Once doctors could no longer have on-
Patients who experience barriers to
Most notably, virtual care and in-home patient
monitoring have soared in popularity due to
social distancing measures.
The pandemic has also prompted longstanding
medical regulatory constraints to
loosen, insurance reimbursement formulas
to change, and stubborn restrictions to be
lifted around the country. Developments
like these were not expected to be widely
available for at least another decade
premise visits, everything was possible,” he
said. “From asynchronous consultations,
to acute home care using sensors and AI,
the Mayo Clinic can monitor COPD, kidney
function, and heart failure in homes, as well
as offer nursing and wound care.”
This platform of virtual care is the new
normal as federal agencies and policymakers
have had no other choice than to accept
the changes.
technology, or those who are not tech-savvy
may experience obstacles with virtual care.
Halamka suggests a new occupation—the
equivalent of what he calls a “care traffic
controller”—to help patients navigate the new
healthcare options. These professionals could
help with tasks such as computer access and
monitoring at home or suggest public kiosk
locations where telemedicine is available.
New healthcare models will require new
We experienced nearly
40 years of halting
efforts in telemedicine
condensed into 12 weeks.
John Halamka
Mayo Clinic Platform
The Mayo Clinic, a 150-year-old national
Consumers will opt for convenience over
human roles and adjustments, and Halamka
nonprofit medical center, is part of the
privacy and high-touch because the gains
admits that there will be stumbling blocks and
telehealth surge. John Halamka, M.D.,
from telemedicine far outweigh any losses
failures along the way. But the long-awaited
president of the Mayo Clinic Platform, said
in personal contact. “You will usually get the
transition will be worth it.

7 / Open Ecosystems
Ping An’s evolution
from finance to platforms
Insurance group expands into B2C and B2B
markets—both online and offline.
Jessica Tan
Group Co-CEO, Ping An Group
In some cases, platform leaders entered
“Think of Ping An as a hub and spoke type of
The challenge of being
their market indirectly. Jessica Tan, co-CEO,
model consisting of 10 technology companies
in so many markets lies in
chief operations officer, and chief information
in various markets,” Tan said. In each market,
the complexity, scale, and
officer of the Ping An Insurance Group of
the company has its own B2C flagship, which
diversity of Ping An’s users.
China, explained how her company leveraged
includes Good Doctor and Autohome, the
“Our users come to us for
its financial services expertise to build out
larger ecosystems.
Many Americans might be familiar with
the Chinese platforms, Alibaba and Tencent,
which began as internet providers that grew
their ecosystems around consumers.
By contrast, Ping An was a financial services
firm that used its finance and technology
expertise to foster open ecosystems.
The company serves approximately 564
million users in China across five verticals—
financial services, healthcare, cars, housing,
largest health and car portals in China. “More
importantly, we have a B2B franchise,” she
added. “We believe online and the offline
have to merge.”
Outside of its Good Doctor portal, Ping An
partners with Smart Healthcare to serve 170,000
hospitals and medical institutions and more than
300,000 offline doctors. The bulk of the economy
in all these sectors is still in the offline system.
Even though China is one of the most developed
countries in internet finance, online business
constitutes only between 10 to 15 percent of
healthcare or to buy cars—in fact,
76 percent of the cars sold in China go through
Ping An,” Tan explained. “But we also think of
ourselves as a huge department store where
users come to shop for many services, all from
one app. Users also come to us for wealth
management, loans, and education.”
Personalization will be critical moving forward
for Ping An and other businesses. With data
analytics, the company is able to customize and
improve the user experience. For example, the
analytics of Autohome can determine when an
insurance policy is set to expire, and allow the
Even though China is one
of the most developed
countries in internet
finance, online business
constitutes only between 10
to 15 percent of the entire
financial services market.
and smart cities.
the entire financial services market.
user to renew with a discount in the app.

8 / Experience Platforms
Platforms are spreading into
Pine spoke with three leaders
When the lockdowns began,
new markets —matching meeting
about how their strategies
Side Door shifted to online
Despite the pandemic,
places with business people, music
events with audiences, and brands
and models have pivoted since
the pandemic.
streaming concerts—and
completed nearly 200 shows from
with marketing opportunities—all
March to September. Simpson is
the show must go on
Streaming concerts, online engagement, and virtual coworking
are here to stay.
Joseph Pine
Co-Founder, Strategic Horizons LLP
while offering users personalized
experiences.
“Consumers, and increasingly,
business people, want experiences
and events that engage each
person in a personal way,” said
Joe Pine, a consultant and author
of The Experience Economy.
Experience platforms can
harness network effects with
the recognition that experiences
serve as the critical link between a
company and its customers in an
increasingly distractable and timestarved
world.
Commodities and goods have
always been sold on platforms,
noted Pine, and service platforms
and experience platforms
followed suit.
First Tube Media
Andrew Beranbom is founder and
CEO of First Tube Media,
a platform that offers brands
a combination of management
services and hosting technology.
He designed a proven model
to use live media for business
results, but now everything
has moved online and new
models were needed quickly.
“Streaming is a new frontier for
branded marketing,” Beranbom
said. “The emphasis is on
experiences that will draw
attention for our brands in an
authentic, scalable way.”
also exploring ways to create
value with online experiences,
such as artist interviews or
building online communities
using recommendation engines
and personalization.
Seats2meet.com
Ronald van den Hoff is co-founder
of Seats2meet.com, an online
platform that matches free agent
workers with work spaces.
Even before the pandemic,
van den Hoff had migrated
his business from an online
reservation system to a fullservice
platform that uses AI
But the COVID-19 pandemic has
to allow users to chat, search
prompted several companies to
for jobs, and share ideas. “We
think differently about how they
realized we could use the data
do business.
and expertise of co-workers to
Take Airbnb, which began as a
service platform that allows users
to rent a couch or spare room
and evolved into a trusted source
of hospitality and meaningful
experiences. Social distancing
mandates around the world forced
the company to pivot to online
experiences—to truly become an
experience platform.
Side Door
Laura Simpson co-founded the
platform Side Door, a virtual
marketplace that offers booking
for performance venues, ticketing,
and finding live audiences.
“We collaborate, vet vendors,
and pull together the people
necessary to make a great online
show,” said Simpson.
enhance the experience of guests
coming to the meeting rooms,”
he said.
What are van den Hoff’s
plans post-pandemic? He
predicts that virtual meeting
spaces will be available even
as physical locations reopen,
creating a hybrid business with
physical and virtual components.

9 / Fireside Chat
Tales from a platform
pioneer
Co-founder and former CEO of Intuit, Scott Cook, shares
his wisdom on taking risks and building platforms.
Scott Cook is no stranger to the turbulence
of platform markets.
As founder and former CEO of Intuit, Cook
was an early advocate and innovator in
platform models. Founded in 1983, the
$7 billion corporation has nearly 10,000
employees and is the maker of popular
financial software, including Mint,
Quicken, TurboTax, and QuickBooks.
Despite Intuit’s success, Cook noted that
the early years were often bumpy—and
he shared advice for companies entering
the market today.
One of the struggles many successful
platforms face is objections. Cook said
that corporations have the equivalent of
Scott Cook
Founder and Chairman of the Executive Committee, Intuit
“The core part of the business says not to
do that silly new thing,” he said. “It’s little, it
won’t work. Instead, give the resources to us
in the core business. Therefore, leaders have
to ring-fence, and either hide or rigorously
defend new things to keep the natural
corporate antibodies from consuming it.”
The gift—or perhaps the madness—of great
entrepreneurs, he added, is the ability to take
what seems like a fool’s mission, transform it
into a fully developed vision, and stay with it.
“For example, we were originally told that
our concept of Quicken was a crazy idea—
that it had been done before and that our
product was inferior because we had very
few features.”
we experienced huge opposition within our
company,” said Cook. “Our payroll group
didn’t want to open QuickBooks to
competitors and we finally had to declare
that we wanted customers to have a
choice—ours or competitors.”
When two Intuit engineers created a
marketplace for tax advice that anyone
could contribute to, tax experts bristled.
“‘Only a tax expert or certified professional
can answer those questions,’ they said.
‘Wrong answers will ruin our reputation, our
brand, and consumer trust in our business.’ ”
The division GM and Cook defended the
right of the team to run the test. “I was pretty
convinced it would fail, but I wanted us to
learn. Then, it actually worked. Customers
started answering about 50 percent of
the questions and we had our own people
a Wikipedia effect.” With that success, the
concept expanded into the rest of TurboTax.
Persistence and perseverance are needed,
said Cook. In the area of small business
lending there were many false starts and
setbacks. “Our lending system now is purely
digital. For example, it takes a business
applying for a PPP loan about six to eight
minutes to apply. Fully 83 percent of the
applications are approved in 10 minutes,
and then we fund it that night.”
Cooks said that without a champion or
a protector, the corporate system will
grind down and eliminate your ability to
do something bold such as becoming a
platform company.
His advice: “Surround yourself with people
who have vision and stick-to-itiveness,
people who have the ability to see a vision
The gift—or
perhaps the
madness—
of great
entrepreneurs
is the ability
to take what
seems like a
fool’s mission,
transform it
into a fully
developed
vision, and
stay with it.
antibodies that show up when they try
to do something radically different.
“Also, QuickBooks is a tremendous product
and we wanted to turn it into a platform, but
answering the other half. If an answer wasn’t
right, it got corrected by other users—kind of
that’s different than what the corporation
has traditionally seen.”
Scott Cook
Co-founder, Intuit

10 / Action items
Action items
Key takeaways and trends to watch from the
2020 MIT IDE Platform Strategy Summit.
Five requirements
for platform success
1
Be
2
Take
3
Get
4
5
Consider
willing to test and fail.
B2B partnerships
seriously.
corporate buy-in and
protections from senior
management; get
champions, or go it alone.
Hire and train
entrepreneurial staff to
carry out the vision.
a federated or
collaborative platform to
build out ecosystems.
Use network effects and
partners to create value
for other partners.
Three key trends
Super apps and
experience platforms
are on the rise
Industrial firms are
adapting business
models to become
orchestrators of
platform ecosystems
Policy issues regarding
data and information
ownership will intensify
as platforms become
engines of value creation
Thank you
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the benefits of the digital economy.
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Content Paula Klein