You Don’t Need to Be a Silicon Valley Startup to Have a Network-Based Strategy
Harvard Business Review | July 14, 2017
By Mark Bonchek and Barry Libert
The success of platform companies like Airbnb, Amazon, and Netflix has led to envy bordering on despair for their competitors. When we asked one successful online retailer “How do you compete with Amazon?” the response was “You don’t.” Publicly, CEOs talk about digital transformation, but privately, they wonder if their efforts will be enough.
Companies are right to be worried. Our research shows that companies with platform- and network- based business models are exponentially better at creating value. They grow faster, make more money, and are more valued than companies organized around products and services.
Building a successful platform business is hard enough when you have an original idea, ample capital, no core business to cannibalize, and a team of top talent. (Just ask the executives at Uber, Twitter, Fitbit, and Snapchat.) So what’s a legacy company to do? You might think that you have to turn yourself into a Silicon Valley startup and reinvent your business model.
