We're trying to figure out how to manage a platform in its maturity phase, once we get past the chicken and egg paradox and reach the critical mass. If we look at large established platforms, we can easily see how they are particularly difficult to read through the pure platform models we introduced. Companies like Facebook or Amazon orchestrate a complex network of relationships among many different sides. Facebook was born with the aim of putting in contact different people who are looking for each other. Today, however, the platform created by Zuckerberg also enables many other transactions, having on board companies, developers, advertisers and other players. Amazon, in a completely similar way, in addition to buyers and sellers in its marketplace, offers services to customers who want buy its computing capacity, sells advertising spaces on its marketplace, and produces and distributes movies and TV series. How can a platform go from being a transactional two-sided platform that connects two groups of customers, such as Amazon's sellers and buyers, to be a large multi-sided platform with multiple customer groups? As usual, to answer this question we can start from the observation of an emblematic case in the world of platforms: Airbnb. The platform was founded in 2008 with the goal of connecting people looking for a place to stay and people who wanted to offer a bed. In late 2016, the platform began to expand, adding a third group of customers: experience providers, people who offer services through which travelers, the first-side customers, can have different experiences in the cities where they are, such as bike-rides or cooking classes Conceptually this move is as if the platform provider decides to create a new two-sided platform, connecting travelers with experience providers. Still they did not begin from scratch. They started from a semi-processed platform that already has the first side on board. This strategy is called Supply Side Extension, going to add a new supply side to the one already present on the initial structure. From a value perspective, the platform enables a new value proposition for travelers by leveraging the critical mass on their side that has already been achieved, and begins to capture value on a second line of transactions. In this way, the platform provider can leverage the existing community to enable new externalities right away, offering immediately high externalities to the new third side. This strategy can then be implemented over and over again, resulting in even particularly complex systems with many sides. AirBnb is an excellent example of adding a third side with a transactional logic, but we can find many others such as Uber with restaurants and Uber Eats. I think it's useful to mention another company that has made supply side extension a successful repeated strategy. I'm talking about Grab. Grab Holdings is a multinational company headquartered in Singapore. The idea of creating a taxi-booking mobile app for Southeast Asia, similar to those being pioneered in the US, first came from Anthony Tan while he was at Harvard Business School. Motivated to make taxi rides safer in Malaysia, Tan launched the "My Teksi" app in Malaysia in 2012 together with Tan Hooi Ling, another Harvard graduate. MyTeksi started with an initial grant of 25,000 US dollars from Harvard Business School and Anthony Tan's personal capital. The name changed into GrabTaxi, and the company expanded to the Philippines in August 2013, and to Singapore and Thailand in October of the same year. In May 2014, in an effort to overcome the lack of public transportation during peak hours, the company launched GrabCar as an alternative form of transportation that uses personal cars instead of taxis. This is the first example of supply side extension, that will lead to many more. In November 2014, GrabTaxi launched its first GrabBike service in Ho Chi Minh City as a trial service. Today Grab has many sides, offering various types of services, from transportation – with taxi or private cars – to food, delivery of various products, tickets for shows, hotels and other subscription services. Grab became a sort of service hub in Asia, by bringing together many of the platforms we used as example in this course. Always leveraging on a supply side extension. From a modeling perspective, supply side extension is the first innovation logic to move from a two-sided platform to a multi-sided platform, adding new sides to the system by doing basic ecosystem innovation and making a platform more sustainable in its maturity phase.
