In recent years, we have witnessed a monumental shift from both a social and economic perspective. Business models that were effective years ago no longer meet today’s needs. While the preferred approach used to be the so-called linear business model, it has now been replaced by a much more complex, open model: the platform model, which leverages internet connectivity and software.
For years, the linear model – also known as the "pipe" model – dominated the economy because it responded well to societal needs. Companies created products, released them onto the market, and sold them to consumers. It was a one-way model, much like a stream flowing from a mountain to a valley, where value was produced at the source during manufacturing and then delivered to the user.
Many industries utilised this model, such as manufacturing. Even the media industry could be categorised under this model, as it produces information through television, radio, and newspapers. The content produced is then consumed by users, whether they are viewers, listeners, or readers.
However, while globalisation has shortened distances on one hand, it has accelerated change processes on the other, specifically mandating the rise of new models.
The emerging model is that of the platform. Consider companies like Google, Facebook, Apple, and Uber – to name but a few – which have experienced enormous growth in a relatively short space of time. Their exponential success stems precisely from using a platform that "shortens" distances and creates interactions.
The possibility of connection and interaction constitutes the true revolution of this new business model. One could say that the great difference between the two models lies in value creation. While in the former case value is created and intended for the consumer, platforms allow for an exchange of value between people outside the platform who interact with each other through the platform itself. It acts as an open space where interactions occur. After all, it is undeniable that we have become a world of interactions.
The platform, therefore, not only enables interaction but also looks after the people who use it, governing the social and economic interactions that follow.
