How new platform startups can disrupt the status quo

At the recent World Economic Forum Annual Meeting of the New Champions 2018, I was invited to talk about how we’ve grown our fledgling business, especially in an era where monopolies and oligopolies are stifling competition in the tech platform space.

In today’s platform economy, the success of a platform hinges on the network effects that it creates for its users. It is a given that a platform with a significant network effect will achieve some monopolistic or oligopolistic status in its market. For multi-content social media, it’s Facebook; for ecommerce, it’s Amazon and Alibaba; for ride-hailing platforms, it’s Uber and Grab.

This is because data has become currency in today’s economy, and the companies which grew in tandem with the golden age of internet penetration would likely have a monopoly on it.

So, to create a level playing field which fosters competition and keeps incumbents on their toes, we must find ways to achieve network effects in a shorter timeframe and with limited resources.

The three Ds of disruption

Government support is always welcome when creating a level playing field. Singapore sanctioning Grab and Uber for breaching anti-trust laws is a good example.

However, the government may never step in. So, startups can’t wait for state intervention to start making their market moves. A fellow panel member (a startup founder from Turkey) also shared how government help can even be counterproductive if its public opinion is low.

Instead, we need to deal with monopolies ourselves and challenge the big boys in smarter ways. This was the mindset driving our strategies for Sendhelper and Sendjobs, and we created a basic framework for disruption to essentially do more with less.

Differentiation

This is fairly intuitive. New entrants need to be recognized as a player in the market, while distinguishing themselves from the incumbents and other “me-too” platforms. 

Differentiation factors could be visible or invisible to users, but they must be tangibly or intangibly experienced. Platforms should not differentiate just for the sake of being different. They should do so by adopting the right strategy by first understanding their buyers, suppliers, market forces, and market gaps.

What we did at Sendjobs and Sendhelper, for example, was to isolate our strategy in areas like operating processes, payment methods, user journeys, and branding to differentiate ourselves from incumbents.

One of my fellow panel members who was from a consulting firm also pointed out another way to stand out. According to him, startups should also consider collaborating and integrating with larger platforms. This can be useful, but the startup must be mindful and make sure the bigger player can’t copy their product and remove them altogether.

What the startup can do is help the larger player diversify by providing an added benefit. For example, some companies are integrating their consumer engagement strategies with chat platforms like Line.

Design

How systems and products are designed can have a direct impact. But design doesn’t only refer to the UI/UX elements of a user journey. Companies also need to consider the following: