[Book Sip] Platform Business, B2C and B2B Strategies Differ Like This

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Platform business is fundamentally different from traditional industries and concepts. It does not produce goods directly but creates value by mediating between producers and consumers. However, competition is fierce. Sometimes, it even resorts to a chicken game through cutthroat competition. This is why careful consideration of platform business models is necessary. The author offers his own answers to how platform business models should be created from both B2C and B2B perspectives. He distinguishes the two and presents business models by type. Along with the characteristics of digital technology, he details insights from firsthand field experience based on the three major laws of network effects (Shanoff's Law, Metcalfe's Law, Reed's Law).

In the pipeline business, which refers to the traditional business form, producers and consumers were clearly separated. The group producing products or services strived to produce good quality products at low prices, and consumers purchased products with good cost-effectiveness. However, in platform business, this distinction has become very blurred. - From "Understanding Platform Business"

The characteristic of network effects is that they fundamentally flow bidirectionally rather than unidirectionally. This can be easily understood by looking at the process of a product being delivered from a company to a customer. Traditional companies have a unidirectional linear flow of producing products and delivering them to customers. However, platform business involves mutual interactions between production and consumption, creating a bidirectional network. Through this process, new value is created, and eventually, a larger and more extensive network is built. This concept is important because it not only reduces transaction costs for companies but also expands market size without incurring significant additional costs. This has been a major factor in the rapid expansion of platform businesses. - From "Digital Technologies and Network Laws Enabling the Digital Economy"

The most important thing when planning a business model based on platform business is to break away from the traditional pipeline business mindset. Traditional business methods focus on providing competitive prices and good quality for the final product delivered to customers, centered on the value chain. Therefore, 'efficiency' at each stage of production and distribution is paramount. However, the most important element in platform business is 'interaction through networks.' Even if the result of these interactions is not directly 'money' but information exchange between individuals, securing activity among individuals participating in the platform is crucial. - From "Platform Business Model Design"

The core perspective in B2B platform business is that activities are solely for 'money,' focusing on short-term sales rather than long-term revenue. Therefore, at the stage of conducting business, the 'barter conditions' of what companies participating in the platform exchange with each other are very important, and this is based on the competitive advantages held in the market. - From "B2B (Business to Business) Platform Business Commercialization GTM Strategy: Ecosystem Construction"

Although the types vary, the commonality is that all customers are general users. Therefore, both the starting point and goal of interactions must be aligned with the users (customers). These users have distinct personal tastes and individuality, unlike the uniform characteristics of typical companies (productivity improvement, cost reduction, issue and risk elimination). Also, since the interaction methods pursued by each type of platform differ, a clear definition of the platform business model you want to create must precede. - From "B2C (Business to Customer) Market Platform Business Model Development Plan"

The left side of the business model canvas consists of the 'organizational efficiency perspective,' and the right side consists of the 'customer value perspective.' The 'organizational efficiency perspective' is the area where you consider which partners and activities to engage in to provide value to customers, and what resources and costs to invest. Conversely, the right side, the 'customer value perspective,' is where you segment customers and consider the process of delivering value to them. Based on these two major concepts, if you refine your ideas, sales environment, and business timing, it will become a more useful model canvas. - From "A Study on Platform-Based Business Model Development"

Supermassive AI Digital Platform Revolution 2 | Hyun Younggeun & Lee Juyeon | Saebit | 232 pages | 17,000 KRW

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