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In the SaaS world, branching out to a platform business is fairly common. It’s not a surprising move anymore, given the huge benefits of owning the building blocks of other businesses, as we talked about in the first article of this series. Since building a thriving platform ecosystem doesn’t happen overnight, in this follow-on piece we’ll explore the steps for implementation.

In this era of digital platforms, there is no limit to the number of customers you can reach out to. McKinsey noted recently that "companies pursuing offensive platform strategies yield a better payoff in both revenue and growth". Looking at this, one might think the sky's the limit for digital natives having an army of tech-savvy professionals. But this might be generalizing a bit. Incumbents can command a 20 percent share of digitizing markets, compared to only 5 percent for digital natives. But only 3 percent of incumbents have adopted an offensive platform strategy.

Though adoption is low, a growing phenomenon indicates that companies are transitioning from a product-based to a platform-based business model. Technology is at the core of this transition. Cell phones, which were once just typical products, have now become platforms offering a plethora of functions besides only making telephone calls. This is bringing subscribers together with application developers.

According to Harvard Business School, a successful platform strategy involves three components -

Example of a product organization supporting multiple products sharing components of the same platform - by Wyatt Jenkins

If you are considering branching out to a platform business model, the following steps may help in your implementation approach -

A mindset change

Shifting from a product mindset to a platform mindset can be downright counterintuitive—indeed, many firms discovered new platform opportunities almost by accident and in spite of their own missteps. But, like many transformational strategic moves, the successful transition from product to platform should happen in stages that demand flexibility. Platforms are at the core of the successful businesses of the future. By adopting platform thinking and new technology, any business can evolve to join the platform economy.