Fri, Jan 3 2020

The rise of online platforms is unstoppable. Here are its most important challenges

Sprout published an article about the most important challenges of platforms. During the interview, Richard Straver (founder of Online Payment Platform) gives his opinion about the platform economy. "They are everywhere, online platforms that bring supply and demand together. From meals and taxis to art and holidays. But do not think that we are running out of industries for platform disruption," Richard said in the interview.

The founder of Online Payment Platform (a payment service for platforms and marketplaces) speaks with three to five new platform-startups on a weekly basis. Derived from an estimation of a graduation student at the company, there are approximately 175 marketplace platforms in the Netherlands, equivalent to Spain.

 

These platforms are sometimes dealing with unique challenges. ''But 80 to 90 percent includes things you will find elsewhere.'', Straver tells. The entrepreneur, previously operating in Silicon Valley with payment service TinyPay, decided to share that knowledge in the form of Platform Day last year. Platform Day is an event specifically targeted on platform businesses. On March 19th, the 2nd edition of the single-day event will take place, where approximately 250 founders and managers of platforms can be expected.

 

Keep it clean

Those platforms are for example dealing with employment regulations and privacy. Keeping it real and clean, is how Straver phrases the challenges with his smooth American English. Being a car sharing service for example, how do you ensure that all users own a (valid) driver's license?

Some platforms are experiencing that users must have these licenses or permits before they are allowed to offer their service. How do you safeguard if it is true? [of het werkelijk waar is] Straver: ''And in such manner without having barriers for your user or yourself. After all, your company must remain scalable.''

 

Users

An important subject for platforms is user interaction, Straver explains. ''That goes much deeper than a webshop. In a certain way, your users are also owners of your platform. Imagine someone trading on Marktplaats for over 10 years, that somewhat becomes 'his' spot/place. You are building a community and they should be listened to. That for example makes it difficult to carry out a radical change. How do you create support for that?''

Another hot topic for platforms is internationalisation: when do you take the step to different countries, and should you immediately organise your platform accordingly? Perhaps the question of which digital infrastructure you will pick: which cloud-service will you select and for what reason? What are the benefits of Google, Azure or AWS. Why would you choose one and not the other?

 

Find people 

Every startup recognises the question of how to find good people. ''To match the right people to your mission as company. It might be an open door and a challenge that not only applies to platforms, but the approach to recruitment is where you can differentiate as platform. You have a certain range and image. You could use that to recruit people that feel connected to your platform and mission statement.''

For example Nature. house, the holiday house platform of Tim and Luuk van Oerle is doing that very well, Straver mentions. ''Nature. house has 300.000 Facebook followers. If they are looking for new employees, they will publish on their social channels. That is how they often find people that feel intrinsically connected to the company.''

Which other branches could be 'disrupted by platforms' as well? Straver recently noticed several remarkable examples passing review. For example a platform for VVE's, the associations of landlords of which there are a couple of thousands in the Netherlands. The platform assists in money management, creating renovation project proposals, and sending payment requests to all participants. 

Or Clair Automotive, a platform for car garages. With their app service, garages inform their clients that for example have annual car checks (APK) scheduled with the necessary repairs and costs. After a click on the button, the client accepts and is immediately able to pay. An alternate distinctive example Straver recently dealt with is World Whisky Index, the company of founder Michel Kappen allows individuals to invest in rare whiskeys through an online platform.

 

Dark side

If correctly, an online platform ensures user friendliness and efficiency, Straver explains. ''They make sure you find your needs faster, hopefully with a better price and in a user friendly manner.''

But the platform economy also has a dark side, the entrepreneur admitted upon request. ''For example the distance/gap between employee and employer increases. When you do your job on a platform, you are not working in a team of an organisation anymore. The focus of working in a group fades into the background and you are slowly becoming more 'data piece' rather than a human that is understood by others - even though there are some who see this aspect as a benefit.'' 

Perhaps the biggest pitfall of platforms is their growth towards monopolistic giants draining entrepreneurs and users. On the other side, giants like Booking.com and Takeaway result in other initiatives, Straver proposed. Often from frustrated entrepreneurs responding with counterweight. Where Takeaway serves as lord and master, new parties such as Bezorgland, Eten.com and Thuiseten.nl pop up.

 

Niche players

Straver: ''In the past, there was the case of a monopoly, it was just a matter of acquiring all market share. Now there are niche players that are better at 'resolving' a specific market whilst becoming the largest in their sub category. Have a look at Ticketswap, Catawiki and United Wardrobe. In terms of hand-made items, Etsy is larger than eBay.''

With all these topics you can easily fill 3 days, Straver admits. ''In the long run, it could potentially be Platform Day.'' 

Read the entire interview (in Dutch)

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