Benjamin Edelman

<article-ideainbrief class="article-ideainbrief">
 <h4 class="ideainbrief-title">Idea in Brief</h4>
 <div class="ideainbrief-contents">
  <h5>The Challenge</h5>
  <p>Digital platforms are attractive businesses because they create significant value and network effects protect competitive advantage. But they face considerable start-up challenges.</p>
  <h5>Why It Happens</h5>
  <p>Every platform is empty at the outset. And most require multiple types of users. It’s not enough that many people want to book taxis by smartphone, for instance. Drivers must also be willing to accept smartphone bookings.</p>
  <h5>The Solution</h5>
  <p>To launch a platform successfully, consider quickly attracting a large group of users, offering features that provide value even if few users sign up, establishing credibility, and ensuring that the platform works with legacy systems.</p>
 </div>
</article-ideainbrief><p>For online platform businesses,&nbsp;customer mobilization&nbsp;challenges loom large. The most successful platforms connect two or more types of users—buyers and sellers on a shopping portal, travelers and hotel operators on a booking service—and a strong launch usually requires convincing early users to join even before the platform reaches scale.</p>

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<p>The ubiquity of internet access has caused a sharp rise in the number of businesses offering platforms that connect users for communication or commerce. Entrepreneurs are particularly drawn to these platforms because they create significant value and have modest operating costs, and network effects protect their position once established&#8212;users rarely leave a vibrant platform.</p>
<p>But these businesses also raise significant start-up challenges. Every platform starts out empty. Platforms need to immediately attract not only many users but multiple types of users. For example, it&#8217;s not enough that many customers want to book taxis by smartphone. Drivers must also be willing to accept smartphone bookings.</p>
<p>Harvard Business School professor Ben Edelman has been studying the dynamics of platform businesses and strategies for launching them for 10 years. In this article he draws on research on dozens of platform sites and products to offer a framework for building a successful platform business. It involves asking five basic questions:</p>
<p>Can I attract a large group of users at once?</p>
<p>Can I offer stand-alone value to users?</p>
<p>How can I build credibility with customers?</p>
<p>How should I charge users?</p>
<p>Should my platform be compatible with legacy systems?</p>
<p class="reprint">HBR Reprint R1504H</p>
<p class="reprint">

How to Launch Your Digital Platform

The ubiquity of internet access has caused a sharp rise in the number of businesses offering platforms that connect users for communication or commerce. Entrepreneurs are particularly drawn to these platforms because they create significant value and have modest operating costs, and network effects protect their position once established—users rarely leave a vibrant platform. But these businesses also raise significant start-up challenges. Every platform starts out empty. Platforms need to immediately attract not only many users but multiple types of users. For example, it’s not enough that many customers want to book taxis by smartphone. Drivers must also be willing to accept smartphone bookings. Harvard Business School professor Ben Edelman has been studying the dynamics of platform businesses and strategies for launching them for 10 years. In this article he draws on research on dozens of platform sites and products to offer a framework for building a successful platform business. It involves asking five basic questions: Can I attract a large group of users at once? Can I offer stand-alone value to users? How can I build credibility with customers? How should I charge users? Should my platform be compatible with legacy systems? HBR Reprint R1504H

How to Launch Your Digital Platform

Summary.

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