From What Would Google Do? (pp. 32ff):
Networks are built atop platforms. The internet is a platform, as is Google, as are services such as photo site Flickr, blogging service WordPress.com, payment service PayPal, self-publishing company Lulu.com and business software company Salesforce.com A platform enables. It helps others build value.
Any company can be a platform. Home Depot is a platform for contractors and Continental Airlines is a platform for book tours. Platforms help users create products, businesses, communities, and networks of their own. If it is open and collaborative, those users may in turn add value to the platforms — as IBM does when it shares the improvements it makes in the open-source Linux operating system.
In the old architecture and language of centralized, controlling businesses, Google Maps would be a product that consumers may use, generating an audience that Google could sell to advertisers. That’s if Google wanted to stay in control.
Instead, Google handed over control to anyone. It opened up maps so others could build atop them. This openness has spawned no end of new applications known as “mashups.”
Opening Google Maps as a platform spawned not just neat applications but entire businesses. Mobile phone companies are building Google maps into their devices, which gets maps into the hands of new customers. Platial.com built an elegant user interface atop Google Maps that lets users place pins at any locations, showing the world anyone’s favorite restaurants or a family’s stops on vacation. Neighbors can collaborate and create a map pinpointing all the potholes in town. That map could, turn, be embedded on a blog or a newspaper page. News sites have used maps to have readers pinpoint their photos during big stories, such as floods in the U.K.
Thinking in terms of how to make your company a platform is a key to success in the new economy. So, some questions to ask yourself:
How can you act as a platform? What can others build on top of it? How can you add value? How little value can you extract? How big can the network atop your platform grow? How can the platform get better learning from users? How can you create open standards so even competitors will use and contribute to the network and you get a share of their value? It’s time to make your own virtuous circle.