3 Things Platform Companies Do Differently from Non-Platform Companies

Platform companies are the most successful business model of the 21st century. After transforming numerous consumer markets, they are now entering more and more B2B sectors.

A recently published study by a research group from the Alexander von Humboldt Institute for Internet and Society (HIIG) identified 160 German platforms operating across different industries that aim to attract medium-sized businesses as customers. Considering Germany’s (historical) economic strength, this number is relatively low and globally, American and Asian platforms continue to dominate.

Nevertheless, paralysis is unnecessary. These 160 German platforms demonstrate that platformisation can work in Germany. However, it is crucial to first understand what distinguishes a platform company, as the underlying logic of this business model differs fundamentally from that of product-focused organisations.

This article highlights three key differences between platform companies and non-platform companies, illustrated with concrete insights from the d.velop platform.

Difference 1: Lone Wolves Unwelcome – Platform Companies Thrive on Cooperative Networks

In their widely acclaimed book Platform Revolution, authors Geoffrey G. Parker, Marshall W. Van Alstyne and Sangeet Paul Choudary distinguish between platforms and pipelines. Pipelines represent “traditional companies” in which sequential activities (e.g., manufacturing or software development) are undertaken to deliver a product or service to customers. The output at the end of this linear value chain is the potential value these pipelines can offer. Of course, suppliers and partners exist – yet most of the value creation still takes place within the company itself.

For a platform company, the way value is created differs fundamentally from this linear, closed process. Platforms bring together an ecosystem – a network of diverse actors – who each contribute their own individual part to the overall value. The company operating the platform sets the rules that govern value-adding interactions between these actors. Parker, Van Alstyne and Choudary therefore refer to the platform model as the “inverted firm”: internal processes become less prominent, while value is generated by the network. Coordination and orchestration between the various actors emerge as key additional responsibilities for the platform company. At their core, platforms are participatory and built on strong, trusted relationships.

How is this difference reflected at d.velop?

The d.velop competence network has long been an integral part of the organisation. For many years, d.velop has collaborated with a broad network of trusted partners. This is also why “Trust” is the motto of this year’s d.velop partnersummit, which – due to the ongoing pandemic – will take place fully virtually in 2021.

As part of the further development of the d.velop platform strategy, a new type of actor has recently been introduced: App Builders. To support them, d.velop has created a comprehensive Developer Portal containing guides, tips and complete API documentation. This enables App Builders to make their expertise available in the form of bookable software on the d.velop platform, thereby complementing and extending the d.velop portfolio.

Difference 2: More Innovation, More Speed – Platform Companies Focus on Their Strengths, Innovate Faster Through Their Ecosystem, and Deliver Better End-to-End Processes

While a platform company takes on an additional task by orchestrating its ecosystem (a challenge not to be underestimated), it also gains the ability to focus more sharply. A single company no longer has to provide every feature or solution customers might need. Instead, a collaborative network of companies offers a bundle of complementary elements that create value together.

Apple’s App Store – powered by third-party solutions – is a classic example. It was the decisive advantage that allowed the first iPhone to outperform long-established competitors. Nokia and others were unable to replicate the powerful network of app developers around the iPhone. As a result, even though touchscreen devices quickly flooded the market, none could match the breadth of functions and optional apps available on Apple’s platform.

Many platforms are built around specific core offerings and provide open infrastructures that development teams can build upon to extend the offering. As the example shows, a platform company can focus on its core value, while relying on the network for specialised functionality.

This creates clear benefits for customers:

• The core offering is continuously improved.
• A broader range of functions and solutions becomes accessible.
• Innovation cycles accelerate significantly.
• Complete end-to-end processes become feasible.

And for development teams working with the platform:

• They no longer need to build everything themselves and can rely on established components provided by the platform company.
• Time-to-market is reduced.
• Their functionality can become part of an end-to-end process, allowing them to benefit from synergistic value.

How is this difference reflected at d.velop?

At d.velop, everything revolves around document-centred work and the digitalisation of business processes. The core offering is the document management system d.velop documents, available as a SaaS solution and continuously enhanced by the d.velop team.

Through the App Builders, organisations can already extend their DMS at the click of a button:

1. Struggling with contract management?
2. Looking to streamline contract creation?
3. Want to improve customer communication and efficiently collect digital documents?
4. Need additional inbound channels specifically tailored to invoices?
5. Want documents generated in your ERP system to be transferred into the DMS in a lightweight yet automated way?

All solutions share a common foundation, meaning users only need to be set up once. Things become especially powerful when these building blocks are connected intelligently. For example, imagine using Westphalia Forecast to predict demand and trigger corresponding orders, then processing the resulting invoices with d.velop smart invoice, and finally automating your bookkeeping with LD connect for DATEV Rechnungswesen. This already brings you remarkably close to a holistic purchase-to-pay process.

This small selection illustrates the vast range of possibilities that a platform company can offer through its ecosystem.

Difference 3: Trust Is the Foundation – Platforms Enable Young Companies to Reach Customers, While the Platform Company Remains a Constant Point of Contact

For a platform company, coordinating and orchestrating also means curating—carefully selecting which additional providers may join the ecosystem. After all, by admitting these partners, the platform company implicitly recommends that customers build relationships with them. When the platform company does this well, everyone benefits: customers gain access to innovative solutions they might never have considered due to a lack of existing business relationships or the third-party provider’s relatively short company history. The third-party provider benefits from the trust that customers already place in the platform company, which partially transfers to them.

This means that a platform company not only needs a code of conduct for its own organisation and employees, but also clear rules for the other actors in the ecosystem.

How is this difference reflected at d.velop?

At d.velop, no app enters the d.velop store without being thoroughly reviewed through a clearly defined process covering several criteria. Above all, data security is paramount. As d.velop works with sensitive documents and customer information, App Builders are required to follow the same rules as d.velop’s internal development teams, all of which are documented in the company’s Security Guidelines.

Equally important is the personal relationship: d.velop ensures that every App Builder is known personally. Partnerships with App Builders are designed for the long term, making shared values essential—such as customer-centricity and a collaborative, partnership-driven approach.

The transformation into a platform company requires fresh thinking, patience, and the willingness to leave familiar paths and build new relationships. From d.velop AG’s perspective, however, the journey is unquestionably worthwhile.

I would be delighted if you, too, became part of the d.velop platform—as a partner, App Builder, customer or even in all three roles at once—accompanying us on this journey.