Health

Understanding platforms part 2: How to leverage on Platforms

I love plane spotting. I have just been watching a video on “heavies” landing in rain. Heavies is the definition of big planes. My friend commented how I love watching planes from the outside and not the inside. This is somewhat true.
After countless hours of watching these videos it hit me! The airline industry works like the tech industry. In fact second to the internet, I believe, the airline industry has been important in globalisation.

In my unraveling, I soon discovered plane makers are platforms of the airline industry. As per my definition in my blog “Understanding platforms: Part 1“(https://torooti.wordpress.com/2019/09/11/understanding-platforms-part-1/) platforms companies are the ones that build a cost effective solutions that other companies can ride on to create value both for customers and shareholders. In the airline industry we have to main players i.e. Boeing and AirBus. These two players dominate skies. All major airlines use either of these two plane makers products. The airlines make minor changes in the interior as well as aesthetics on the outside. The airlines invest billions of dollars to create safe and cost effective solutions for their customers.

So how do they compete if the machines are the same?

Well, it may seem obvious ….delight the customer. The only thing that seems obvious but many fail to do. For airlines this means, good safety record, easy to access information, easy booking, keeping time and in flight customer service. Easy, right? A majority of the time this is not executed flawlessly. (I will talk about this soon and see how we as Kenyans can inculcate a culture of customer service)

How should we leverage on these platforms? Using this simple framework you are able to identify what platforms to use.

  1. Understand your business and your customer.
  2. Understand your running costs and determine what part of costs you can “outsource” to a platform
  3. Do your research on the platforms available
  4. Test them out
  5. Scale

The first case to understand how we can apply the platform framework is an example of a home owner who wants to increase rent through short term leases.

  1. Understand your business and your customer: Opportunities for Rental income from long term leasing in urban areas are decreasing (another blog waiting to be published) due to prevailing economic times. There is an increase in short term leasing opportunities from visitors. From the data available you see these travelers want a local feel, comfortable, clean, cost effective and secure place to stay.
  2. Understand your running costs and determine what part of costs you can “outsource” to a platform: This would be your costs of running the property e.g. electricity and water bills. What can be outsourced to a platform can be marketing of your short stay property.
  3. Do your research on the platforms available : The marketing can be outsourced to short stay platforms such as “AirBnB” or “Booking.com” or social media platforms such as “Facebook” or just plain old “google” (it works)
  4. Test them out for a while and improve on the feedback you get from your customers. This is where you can scale your business.
  5. Scale

Another example more closer to home would be insurances. Earlier this year I wrote on “5 ways Kenya’s Medical insurances can be profitable” and I pointed on the way insurances can ride on platforms to be competitive and get more clients. Using the same framework we can see how they can leverage on platforms.

  1. Understand your business and your customer: The private medical insurance market is shrinking. The market is not growing as expected and the need to tap into the mass market is being felt. The customers want health solutions that are cost effective and can be relied on. The market is there and the insurers know it as well.
  2. Understand your running costs and determine what part of costs you can “outsource” to a platform: Insurance companies need to innovate in designing solutions to customers with a big need to cost effective healthcare that is of good quality. Insurances companies also have the muscle to market to the people and get . What they can outsource to platforms like other companies are the technology infrastructure, back office operations and product distribution. These platforms avoid huge capital outlay upfront and work on a pay as you go model.
  3. Do your research on the platforms available : Infrastructure platforms like Azure and AWS that help reduce your capital outlays and only pay as you grow your clientele base. Back office operations platforms (new buzzword: insurtech) like M-TIBA that handle the health insurance value chain from product distribution, hospital management,claims management and finally paying hospitals.
  4. Test them out for a while and improve on the feedback you get from your customers. This is where you can scale your business.
  5. Scale

As you see, no two businesses are the same. You need to think through your business and see how to make these platforms work for you. In the back of your mind you need to create more time to attend to your client cost effectively.

Go ahead and try this framework out and let me know how it goes.

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