A client of mine asked my views on how to value a platform business he is building. Since it's a fun blast from the past (remember when everyone wanted to be a platform?!), I thought I'd share the method we use. In simple terms, there are two questions you need to answer: What’s the business model of the platforms that you’re considering rolling up? Where is value retained in the platform? Question 1 is a weighting factor, which in combination with Question 2 gives you the standalone value for the platform. There are three predominant platform business models: Trade , in which the value is in identifying and rendering liquid otherwise underexploited assets Co-creation , in which the value is in identifying and rendering trustworthy and productivity collaborators who could have otherwise not have found each other Outcome , in which the platform enables the assembly of data or assets from multiple sources and thus enables the platform owner to monetize the combinat
Thoughts on strategy in a Digital Economy