How Many Successful Platforms Can Coexist?

While multiple platforms can exist in any industry, most platform markets have a strong winner-take-all dynamic. This means that you’ll often see only one or two platforms dominating a mature industry. An obvious example is the smartphone market, where Android and iOS are the dominant platforms, with Windows Phone in a very, very distant third place with only around 4% of the market.

This type of winner-take-all outcome is the result of the strong network effects that drive many successful platforms, making them very hard to compete against.

This dynamic means that platforms also exhibit a strong first-mover advantage. This doesn’t necessarily mean that the first platform to market wins. Many early platforms often fail to overcome the chicken-and-egg problem and never achieve mainstream success. It’s the first platform to reach critical mass that enjoys the major advantage.

So winning in platform markets isn’t just about being first, it’s about being the first to reach mass market. After that point, the network effects of your ecosystem will make your platform very hard to compete against, creating high barriers to entry for potential competitors.

Filed under: Platform Innovation | Topics: android, iOS, platform economics, Platform Startup Advisory, platform thinking, platforms, Q&A Videos