In the media

Platform strategy and the value of free users

Mandag Morgen

13 November 2017

Read the full article here

In a byline-article, PA business design expert Anders Ørding Olsen discusses the much talked-about platform business model and what it takes for companies to build a successful platform.

The platform business model is based on the creation of a digital market place that allows third parties to meet and create mutual value for each other, like Airbnb, where home owners and lodgers meet to exchange homes. The more users a platform attracts, the more valuable it becomes to users on both sides of the market.

Anders says: "One of the most attractive features of the platform business model is the fact that businesses can create a growing user base without additional operational costs. This opens the door to exponential growth opportunities and for scaling up the business at a low cost."

According to Anders, this is why building a large and dedicated user base is a good place to start for companies looking to build a successful platform business.

This is what MobilePay, the Danish money transfer app created by Danske Bank, has achieved. By offering users a free service which is of great value to them, MobilePay has built up a large user base, making them the leading money transfer platform on the Danish market

"Building or owning a digital platform is not the right strategy for every business. But it can be crucial to their survival to understand the ecosystem they are part of and in particular, how it can add value to such a platform," says Anders.

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