We are surrounded by platform companies.Literally. Look at your phone. It is probably running on Android or Apple. Your computer has most likely windows running the operating system. When you want mobility you have Uber or Taxify . When you are hungry you order food on Glovo or Uber eats. When you travel you use Airbnb , BOOKING.com or EXPEDIA for your holiday logistics. When you want a book or electronics AMAZON is your site. When you want to pay you use MPESA or VISA. And when you want to relax you have Youtube, Facebook,Instagram and twitter at your hands for entertainment (depending on your tastes). These few platform companies that come to mind as I wrote this. These companies are not only omnipresent but also powerful.
My first conscious encounter with platform companies was about 7 years ago when we were struggling to run a electronic medical records system business. We were struggling with cash and we did not have enough funds to buy a server in our little office. One of our developers casually mentioned we could use the “cloud” (a buzz word then). instead of buying a server. We took the option as we had no options. On further research we found ourselves using a free version of Amazon Web Services . With this “free” resource, we were able to, – unintentionally- build one of the first cloud based medical records systems. At that time we looked “cool” to be using ‘cloud’. But for us, we were happy to use a resource that was free, reliable and secure. We were able to operate for two years without significant costs and that was when I saw clearly the value of a platform.
But what is a platform company? We have spent countless hours at our office debating the correct definition of platforms. Quite emotional these debates get I must say.
I define a platform company as one that builds a cost effective solution that other companies can ride on to create value both for customers and shareholders. Cost effectiveness is important. If the cost is too high then other companies just build solution themselves. Smart companies understand how platforms work and are building new businesses by leveraging on these platforms e.g. Google Ads
Pure tech platform companies like Google,Airbnb, Uber and amazon have been gaining foothold in the new digital economy. Uber and Airbnb are platforms on platforms. They have layered their solutions heavily on google maps and Amazon Web Services which are other platforms. I expect these business models will get more complex as the race for the customer’s pocket heats up. Platforms on platforms on platforms? That sounds crazy but not impossible. It is like inception of platforms.
Another interesting trend happening is with the older tech companies like Microsoft and Apple, that initially sold products. They are now moving into the platform space. They are seeing the main benefit of platform solutions which, in my opinion, is a more predictable revenue model. Products sales predictions are not as certain as those of people who consume your platform daily.
In healthcare we do not have entrenched platform companies. Health,as complex as it is, has proved a challenge even to the silicon valley behemoths. These silicon valley giants are investing heavily in health care tech. However we will not have to wait too long. We have companies like Babylon, open IMIS and many others who are taking a stab at creating cost effective platforms for the health industry to run on. Chinese financial service businesses like PingAn and AliPay also are looking at changing how healthcare financing is done.
Kenya is also proving to be a hot tech spot and healthcare solutions and platforms are coming up fast. One such technology company is Carepay (where I currently work) which one among a number that was developed in Kenya and now scaling in Africa . But as I mentioned in an earlier blog, no one platform in healthcare can cater for the vast and complex value chain. Is it in health wearables? Is it in medical records? Is it in payments? Is it in data analytics? Is it in personal health records? Is it in insurance? The list is endless and at most daunting.
Maybe I have been in the system too long. Maybe I have become pessimistic to think that one platform can be the one and all for everyone in healthcare. Perhaps. But I am happy to be proven wrong. For now, we look at building platforms that can easily interconnect with others in the healthcare value chain. That is the only way to make the lives of our customers easier.