How Branding Is Unique For A Platform (Two-Sided, Network, Marketplace) Business

By Erik Zambrano

Let’s start off with some definitions.

A platform is a business model that enables the exchange of a value (that is not directly owned or created by the platform) between two or more user groups through technology. Uber, Airbnb, Lending Club, Snapchat, Twitch, Instagram, Facebook, Apple’s App Store, Android, and Twitter are all platforms. We like all types of platforms. We’re the Platform Innovation company!

A linear business creates and owns the inventory and value it provides to consumers.  Mcdonald’s, McKinsey, and Pepsi are all linear businesses. They sell directly to their clients.

Branding encompasses brand origination and development (a new organization’s brand), re-branding (a brand reset or enhancement) and ongoing management of an existing brand structure (brand manager responsibilities). This is the scope of our branding definition.

So how is branding for a platform unique?

1. A platform has far less control over the user experience.

Jonathan Mildenhall is Airbnb’s Chief Marketing Officer. His Linkedin profile perfectly illuminates point no. 1. Airbnb is in the hospitality industry, but it’s not a hotel chain. A hotel chain owns and controls close to 100% of the customer experience from the booking website, room service to how many soap bars are placed in each room. Airbnb probably controls less than 20% of the consumer (renters) experience. Airbnb’s ownership of the user experience is further diluted because it controls equally as little of the experience for its producers (property listers).

The Airbnb user experience and brand is primarily comprised of its users’ interactions with each other. A platform controls less than 10% of the user experience. This is terrifying as a brand manager! Or not.

Mildenhall describes Airbnb as the ‘world’s first community driven superbrand’. If Airbnb only controls approximately 10% of the user experience, 90% of the Airbnb brand is then dictated by its users, not its corporate leadership. Herein lies another benefit of the platform business model, externalized brand building. Linear brands already crowdsource marketing and branding stories from their users. In a platform environment, the stories between two humans are a lot stronger than the singular and linear story of a human and a product or service. Peer to peer stories for the win!

2. A platform is more transitory.

A successful platform business is not easy to establish. As a platform entrepreneur, you have to recruit producers and consumers to solve the chicken and egg problem. Building technology is also required to enable the exchange of value between producers of value and consumers of value. Add to the mix fundraising, business development, branding, etc., and you soon have a very full plate.

However, platforms are magical networks. There are moments when everything just clicks.

Product market fit is one such example. Uber hit product market fit very early on. The market it was going after was black cars. The Uber platform experienced product market fit because its product enabled consumers to easily hail a black car and drivers benefited from the automated process and extra revenue. Uber invested in developing a tech product, recruiting and onboarding both consumers and producers; once the initial heavy lifting was complete, it benefited from massive scalability. Network effects are also a compounding element to why platforms scale so quickly and can achieve monopolistic defensibility.

Platforms are inherently meant to disrupt and scale quickly. How does disruption and scalability make platform branding unique? A. Platform brands must start with utility-focused positioning and b. can experience the Three Platform Branding Stages very quickly (in less than ten years). A linear brand almost always starts at a stage of branding that would come last for platforms and a linear brand isn’t as evolutionary as a platform brand.

Three Platform Branding Stages:

i. Utility: A disruptive platform has to introduce new behaviors to its producers and consumers. This phase of branding should focus on explaining succinctly and convincingly to users (both producers and consumers) the value the platform provides and how to unlock that value. Uber started off as UberCab and had a simple positioning focused on Everyone’s Private Driver. Pushing a button secured a private car at your doorstep. Airbnb was short for air bed & breakfast. The company’s founders started the company under this premise- to rent air mattresses in people’s apartments and receive breakfast. Both UberCab and Airbnb started off as a very utility-focused and descriptive (of the platform’s core interaction) brand. The founders were focused on solving one problem when they first started their company and the solution was incorporated into the branding of their company.

ii. Incubation: This is the period when a platform brand starts to think like a traditional brand. Coca Cola owns the positioning around happiness while Pepsi owns pop culture. Virgin Airlines redefined airline convenience for the millennial market and Uniqlo brought Japanese simplicity and functionalism to American consumers. Now let’s look at some platform brands- Google, Facebook, Amazon. Google picked up steam as a platform by offering a search engine alternative to Yahoo. Their branding at the time was focused on utility and letting the world know it had the world’s best search engine. Google then entered a period of incubation and massive innovation. Gmail, the Youtube acquisition, Google Maps and Adwords, were all platform enhancements to its core search monopoly. How did all these ancillary platforms fit under Google the brand? What was Google’s true north? Google incubated several brand positionings such as ‘The need for information crosses all borders’ and ‘You can make money without doing evil.’ Eventually, ‘Organizing the world’s information’ is where it landed. The incubation paid off; Google now had a concise, inclusive and lofty brand positioning to guide its product brand and business development.

iii. Aspirational: To enter the aspirational phase of platform branding, a platform must have experienced a successful incubation period (and be a massively successful platform business). It must understand what its purpose on this green earth is and why it’ll be valuable to the everyday existence of its users. Be warned, many companies and brands don’t make it aspirational. Let’s take Slack, an aspirational brand as an example.

Slack wants to reduce work complexity, angst, and unproductiveness. More often than not, the company mission will the premise for aspirational brand statement. All marketing at the brand level will aim to relay this corporate mission message. Slack will continue to show how the product features increase simplicity, productivity and general well-being. Another example, Facebook brand positioning is ‘Connect with friends and the world around you on Facebook’, which clearly denotes the their very future orientated mission of connecting the world. The Facebook app, Messenger, Internet.org, and all their endeavours are intended to deliver this reality to life.

3. Platforms have different interaction models based on platform type.

Think of your favorite consumer product like Casper or Warby Parker. Now think of another and another and another. The products are all branded very differently because they’re different types of products. The same is true for platforms. Some platforms connect consumers to spare inventory like Turo and Breather. Other platforms connect content writers with audiences and other platforms connect neighbors. Each platform has a unique core interaction and that interaction will dictate how the platform brands itself in stage no. 1 as the platform announces itself to its users.

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Filed under: Platform Innovation | Topics: branding, enterprise hacks