A study of more than 250 platforms reveals why most fail – Michael A. Cusumano, David B. Yoffie, and Annabelle Gawer

Michael Cusumano, SMR Distinguished Professor of Management, MIT Sloan School of Management

From Harvard Business Review 

Platforms have become one of the most important business models of the 21st century. In our newly-published book, we divide all platforms into two types:  Innovation platforms enable third-party firms to add complementary products and services to a core product or technology. Prominent examples include Google Android and Apple iPhone operating systems as well as Amazon Web Services. The other type, transaction platforms, enable the exchange of information, goods, or services. Examples include Amazon Marketplace, Airbnb, or Uber.

Five of the six most valuable firms in the world are built around these types of platforms.  In our analysis of data going back 20 years, we also identified 43 publicly-listed platform companies in the Forbes Global 2000. These platforms generated the same level of annual revenues (about $4.5 billion) as their non-platform counterparts, but used half the number of employees. They also had twice the operating profits and much higher market values and growth rates.

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MIT Sloan Experts Twitter Chat: #FailBetter – Anjali Sastry and Kara Penn

 

MIT Sloan Sr. Lecturer Anjali Sastry

MIT Sloan Sr. Lecturer Anjali Sastry

Smart leaders, entrepreneurs and change agents bravely push innovation to the limit, but do so with a key theme in mind: ensure every failure is useful.

Join Anjali Sastry, Senior Lecturer at MIT Sloan (@AnjaliSastry), and Kara Penn, MBA ’07 (@kara_penn), on Tuesday, December 8, from 7 pm to 8 pm as they discuss the research and inspiration behind their book, Fail Better: Design Smart Mistakes and Succeed Sooner.

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