The development, from the accumulation of some houses to a city, as an economic, social, cultural and political center, followed the traffic routes since the beginning of civilization – along coasts and waterways, e.g. from Marseille via the Rhone, Saône and Rhine to the north. Although many German cities date back to Roman times, more than two thousand years ago, most cities were appointed in the Middle Ages and the second half of the twentieth century. We identify many aspects of the medieval city in the architecture of today’s virtual platforms. This makes a medieval city to an ideal metaphor for a platform.
If we sketch the characteristics of a virtual platform, the similarities catch our eyes.
Access control The medieval city was surrounded by a wall that protected the possessions of the inhabitants. Access was only possible for authorized persons through guarded city gates. Within the city wall, the inhabitants lived in defined quarters.
Platforms are also structured according to topic areas and stakeholders. The gate to the platform also opens only for those, who have a corresponding account, i.e. a user ID and a password.
Infrastructure In a medieval city, the residents used common facilities – from the town hall, the market square, public streets, schools, pubs, to prisons and execution sites.
Virtuality also requires a general infrastructure – from administrative facilities, marketplaces, workflows, training areas, entertainment areas, to facilities for the punishment of extreme misconduct.
Cultural diversity The population of the city is made up of different cultures and professions. You find patricians, craftsmen, merchants, day laborers, hangmen and other trades.
The platforms also have a large variety of members, who are divided into providers, consumers and platform operators, who meet there to do business with each other.
Economic hub In the Middle Ages, the reason for the foundation and mainstay of the city was the market place. There were goods for sale, manufactured in the city or procured from far away. In addition, guilds evolved, which mutually enriched their kindred business.
The virtual platform also serves, above all, for the regular exchange of services between providers and consumers and to strengthen the own specialty.
Governance Due to the dense accumulation of many people, strict rules for coexistence were effective within the city walls. The craftsmen were organized into guilds, which determined regulations regarding education, tools and quality for their field of expertise. Non-members were not allowed to practice the respective craft. Taxes were collected to finance the administration of the commons.
Virtual platforms also define rules that certify participants according to certain criteria, determine clear procedures, and ensure the outcomes of their work through best practice. The taxes of the virtual platform are the membership fees and donations.
Future development The progress of the city was the responsibility of the city lords, who were made up of members of the upper class. They decided on the expansion of the infrastructure, the influx of people and the promotion of certain trades.
Accordingly, the operators of the platform are today primarily responsible for the continuous expansion of the functions, the administration of new and existing members, and the definition of new scope of services and standards.
Bottom line: The scope of a medieval city was determined by the physical accessibility, i.e. eventually by the wall. The same applies to a virtual platform – because you are globally only one click away from the platform and it is accessible to anyone, who has access to the Internet. The counterpart to the city gate is the access control, which protects the platform from unauthorized use. A wide variety of cultures can settle and do business within the area, as long as they comply with the regulations. Everyone benefits from the expansions, which offer constantly growing services. The aspects of a virtual platform become visible on the basis of a medieval city. This makes the medieval city the ideal metaphor for a virtual platform.
It is not sufficient to have a promising business idea. There are many hurdles to overcome before the actual work begins. In the days of Henry Ford it worked out well, as soon as you mastered the entire value chain. Meanwhile, the pendulum is swinging in the opposite direction. Today, the one-hundred percent vertical integration is being replaced by a very low percentage – at the SMART plant in Hambach, France, it amounts to ten percent. Digitization will lead to even flatter vertical integration. These become possible, when the many tasks are spread across many shoulders. Platforms provide such shoulders.
It does not matter, whether we are talking about different platforms or one that contains all the necessary functions. With the following offers tomorrow’s entrepreneurs can focus on their actual business model.
The fourth industrial revolution, Industry 4.0, is driven by the opportunities of network-based ICT – cyber-physical systems, big data, cloud services, 3D manufacturing, embedded technologies, etc. The use of these offerings cannot be avoided. However, you do not have to take care of all aspects anymore. These tasks have been taken over by platforms that provide these services in a user-friendly way.
The term was created in the field of IT. The operating system combines different components into a functioning whole. Under the slogan XaaS (Everything as a Service), today platforms are being provided in an application-oriented way – from infrastructure, to production facilities, to special applications that are used when required and paid only then.
Area of Expertise
In 10 main occupational groups you will find the different professions, each responsible for specific areas. The specialization of the individual areas provides today a vast amount of practical experiences that can be used without the need that one has to familiarize oneself with the respective area. The fourth revolution will lead to more and more platforms, where experts offer their deliverables as a service.
The current networks are websites where producers and consumers meet on a platform provided by a broker in order to offer a certain service – UBER, AIRBnB, Paypal, Ebay etc. In the future, exclusive biztopes will emerge, where selected participants support each other in their business. The Henry Ford of today shares his means of production on a platform with his competitors and stands out in speed, good ideas and versatility.
The place to trade has always been determined by the goods and services that have been exchanged, as well as by geographical features. An overlap of markets rarely took place. Today’s markets are just a click away from every user. Therefore on the one hand one is quickly at the point of action, but on the other hand one is also exposed to all offers. The benefits of the classic marketplace, with its reference points and regulations, are already being exploited by platforms where sellers and buyers meet at auctions – eg. Covisint, SupplyOn.
The little sister of a market is the niche that forms in the corners, where big markets do not expect much revenue. Through the Internet, this niche is as reachable as the big market. Depending on the success of the niche, it can quickly develop into a market and cover with its platform more and more areas.
Business model In a modular world, the actual business models use pods (i.e. small, autonomous units that develop value-add) that are needs-oriented created and eventually resolved when they fulfilled their purpose. The required resources are drawn from the various platforms (see above) on an expenditures basis (pay-per-use). The costs are created by integrating the technology, the operating system, the area of expertise, the network, the market and one’s own niche. If the results are correct, then over time the users will optimize the interaction with the platforms.
Bottom line: The start of a new business model no longer requires the immense preparation by building the necessary technology, a coherent operating system, the experience of a specialist area, the lengthy development of a network, the development of a market or its own niche. Platforms allow start-ups or new businesses to focus on designing their core competencies. Platforms make businesses more agile.