Industry Platforms: Case Studies to Measure Platform Capabilities for US Unicorns
Large-sample empirical research by Cusumano et. al. found that US privately-held unicorns with platform capabilities command on average 123% premium over non-platforms. However, measuring the extent to which a company is platform or non-platform based is a difficult problem given the complexities of...
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| Format: | Thesis |
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Massachusetts Institute of Technology
2023
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| Online Access: | https://hdl.handle.net/1721.1/152746 http://orcid.org/0009-0008-0615-2482 |
| _version_ | 1811085056279576576 |
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| author | AlSadah, Yousif Fayez |
| author2 | Cusumano, Michael A. |
| author_facet | Cusumano, Michael A. AlSadah, Yousif Fayez |
| author_sort | AlSadah, Yousif Fayez |
| collection | MIT |
| description | Large-sample empirical research by Cusumano et. al. found that US privately-held unicorns with platform capabilities command on average 123% premium over non-platforms. However, measuring the extent to which a company is platform or non-platform based is a difficult problem given the complexities of business organizations and how these activities interact with each other in non-linear ways.
This thesis attempts to address this by proposing a systems thinking, case-based approach to evaluate the key business activities of a firm with potential platform capabilities using the author’s proposed Platform Classification Matrix on five of the largest US privately-held firms: Epic Games, Databricks, Plaid Technologies, Stripe, and Instacart. Each business activity for a firm is classified as platform or nonplatform, and if it is a platform then it is assessed based on its revenue contributions to the firm and three strength metrics: Network effects, strength against multihoming, and new entrant deterrence. This matrix generates a ‘platform strength’ metric and allows identification of the platform activity with the most potential towards a winner take all or most case.
The author further proposes combining this matrix with a system dynamic approach to identify how differing business activities can boost or hinder the leading platform service which allows decision makers to assess whether retaining or subsidizing seemingly low-performing business lines is strategic for their leading platform.
The thesis concludes by advocating for using both methods as well as the generated metrics to perform a holistic analysis when evaluating firms with platform capabilities potential. |
| first_indexed | 2024-09-23T13:02:13Z |
| format | Thesis |
| id | mit-1721.1/152746 |
| institution | Massachusetts Institute of Technology |
| last_indexed | 2024-09-23T13:02:13Z |
| publishDate | 2023 |
| publisher | Massachusetts Institute of Technology |
| record_format | dspace |
| spelling | mit-1721.1/1527462023-11-03T03:32:35Z Industry Platforms: Case Studies to Measure Platform Capabilities for US Unicorns AlSadah, Yousif Fayez Cusumano, Michael A. System Design and Management Program. Large-sample empirical research by Cusumano et. al. found that US privately-held unicorns with platform capabilities command on average 123% premium over non-platforms. However, measuring the extent to which a company is platform or non-platform based is a difficult problem given the complexities of business organizations and how these activities interact with each other in non-linear ways. This thesis attempts to address this by proposing a systems thinking, case-based approach to evaluate the key business activities of a firm with potential platform capabilities using the author’s proposed Platform Classification Matrix on five of the largest US privately-held firms: Epic Games, Databricks, Plaid Technologies, Stripe, and Instacart. Each business activity for a firm is classified as platform or nonplatform, and if it is a platform then it is assessed based on its revenue contributions to the firm and three strength metrics: Network effects, strength against multihoming, and new entrant deterrence. This matrix generates a ‘platform strength’ metric and allows identification of the platform activity with the most potential towards a winner take all or most case. The author further proposes combining this matrix with a system dynamic approach to identify how differing business activities can boost or hinder the leading platform service which allows decision makers to assess whether retaining or subsidizing seemingly low-performing business lines is strategic for their leading platform. The thesis concludes by advocating for using both methods as well as the generated metrics to perform a holistic analysis when evaluating firms with platform capabilities potential. S.M. 2023-11-02T20:12:50Z 2023-11-02T20:12:50Z 2023-09 2023-10-10T21:04:30.426Z Thesis https://hdl.handle.net/1721.1/152746 http://orcid.org/0009-0008-0615-2482 In Copyright - Educational Use Permitted Copyright retained by author(s) https://rightsstatements.org/page/InC-EDU/1.0/ application/pdf Massachusetts Institute of Technology |
| spellingShingle | AlSadah, Yousif Fayez Industry Platforms: Case Studies to Measure Platform Capabilities for US Unicorns |
| title | Industry Platforms: Case Studies to Measure Platform Capabilities for US Unicorns |
| title_full | Industry Platforms: Case Studies to Measure Platform Capabilities for US Unicorns |
| title_fullStr | Industry Platforms: Case Studies to Measure Platform Capabilities for US Unicorns |
| title_full_unstemmed | Industry Platforms: Case Studies to Measure Platform Capabilities for US Unicorns |
| title_short | Industry Platforms: Case Studies to Measure Platform Capabilities for US Unicorns |
| title_sort | industry platforms case studies to measure platform capabilities for us unicorns |
| url | https://hdl.handle.net/1721.1/152746 http://orcid.org/0009-0008-0615-2482 |
| work_keys_str_mv | AT alsadahyousiffayez industryplatformscasestudiestomeasureplatformcapabilitiesforusunicorns |