The Concept of Postal Platform and Its Applications

An Overview and Framework for Postal Platforms

September 19, 2013

Outline

● The concept of platforms What is a platform? Why are we talking about them today? Examples of commercial platforms & ecosystems

● How to apply this concept to the Postal, Mailing & Shipping industry Postal ecosystem and infrastructure A postal platform: Why and How? Next Steps

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Concept of platform

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Concept of Platforms

● Business model Bringing revenue Bringing innovation Managing risk

● Infrastructure Operating system, distribution system

● Applications that interact with users ● Rules of the game ● Network effects

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Microsoft versus Apple 1981-1997

● Apple launched the personal computer market but Microsoft licensed widely, building a huge developer ecosystem. By the time of the antitrust trial, Microsoft had more than 6 times the number of developers.

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Developer Ecosystem

Apple versus Microsoft: Key Business Model Difference

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Apple Mac

Users Claris

Mac OS

• Charged ~$10,000 for SDKs(*). • Controlled OS & HW and dominant Apps. • Vertical integration choked network effects

Apple Microsoft • Microsoft had 6-10X developers • Open APIs / Cheap SDKs • Controlled OS, licensed. • Strong network effects.

Users Dvprs

MS Windows

Dell IBM … HP Providers

Sponsor

(*) Software Development Kit

Microsoft versus Apple 1998-2009

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● Using a platform strategy, Apple becomes the most valuable tech firm in the US, representing $310Bn to Microsoft’s $204Bn. Chart shows % growth.

“I sell songs in order to sell phones”

Network Effects

Network Effects

Users (Demand) ● Consumers of the platform services; they can

be individuals, businesses, organizations, etc.

Users (Solution Developers) ● They provide product or services that attract

users to the platform – information, services, answers, music, games,

Providers ● The contact point for users and value-added

providers. Providers offer common platform components and define rules to facilitate the services.

Sponsors ● Responsible for the overall organizing structure

for the platform: the rules and governance of the ecosystem. May control the underlying platform technology and IP rights.

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Sponsor

Provider

Users (Demand)

Users (Developers)

Microsoft & Apple

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Today, Apple is a Platform Today, Microsoft is a Platform

Other examples

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• Evolved from a single purpose application • Android & Chrome operating systems,

Docs, Gmail, Calendar, and Chrome browser,

• Droid phone, Android tablets, Chromebook, and Music Store

• Google Books, Product Search, Checkout, Wallet, and Cloud Computing.

• Google+, Google Games, Groups, Orkut, Blogger, and Hangout.

• 500 M users, over 50% log in every day, 200M using their mobiles.

• Over 250 M interact with Facebook across 2 million other websites

• 20 million applications are installed per day

• 3 million messages are sent every 20 minutes.

Giving people the power to share Organizing Internet Information

What is a platform?

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Infrastructure • Physical • Information • Financial

Applications

Developers

Planks

Users

Platforms get enormous value from 3rd party developers

Most firms can only concentrate on most

valuable apps

Profits increase when others add to platform’s

“Long Tail”

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In House or Third-Party?

● iTunes/Facebook applications developers are primarily “entrepreneurs” Investing time, providing ideas and concepts, Developing unique marketing strategies and campaigns Risking capital, develop and commercialize products

● Platform sponsors have responsibilities too Manage plank rules (IP, revenue sharing, appropriateness) Run developer forums May subsidize or promote certain projects

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Lessons from today’s Platforms

● Winners in a platform market generally Have the “best” platform strategy, not necessarily the “best” product Follow their mission, leverage their strengths, study the market

● It’s better to maximize the value of their infrastructure and intellectual property, not the terms and conditions that maximize intellectual property protection

Source: Shapiro, C. and H. Varian (1998). Information Rules (Harvard Business School Press). p5.

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How Do We Apply This to the Postal, Mailing and Shipping

Industry?

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What do we have? What’s missing?

Infrastructure Ecosystem Applications ? Business Model Strategy

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The Postal Infrastructure

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The Postal, Mailing & Shipping Ecosystem

● The postal ecosystem Consumers Advertisers Publishers and Printers Consolidators, third-party logistics providers, and other transporters Banks and financial services providers Policy makers and Regulators Postal operators and couriers Technology suppliers and other service providers

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The postal platform

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Infrastructure • Physical • Information • Financial

Planks

Shipper S R Receiver

eCommerce eGovernment

New Logistics Market intelligence

Innovation

Private Capital

Example: Leveraging Communities

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R Receiver

Example: The Moving Community

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R

Change of address records

Moving to a Platform Business…

● The platform business model can have a transformative effect on the postal ecosystem Re-imagining the mail business with innovative applications Extending the value of the mail and the value of the postal

infrastructure Creating two-sided network effects

● Moving to this new business model requires: A strategic approach that aligns mission, corporate strengths and

market needs The identification of application “zones” “Planking”: The definition and implementation of a platform program

within the enterprise

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Application Zones

● eCommerce

● Retail services

● Financial services

● New Logistics

● eGovernment & community informatics

● eMailboxes & electronic services

● Marketing, Affinity & Market Intelligence

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Etc.…

Next Steps

● Charter document Strategic analysis: Mission, strengths, market needs Business case for a platform strategy Application zones Blueprint

● Establish planks Platform organization Communication plan and outreach Business plan, rules, I/P, “give and take” Implementation, new internal processes

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In Summary

● A platform business model can have a transformative effect on the postal, mailing and shipping ecosystem Bringing a continuous stream of innovation Mitigating risks and conserving capital Creating network effects Extending the life of the mail

● A strategic focus is required Mission, strengths, market needs

● A plan must follow Outreach Applications

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Thank You

Questions, comments: [email protected]

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> insight > action > transformation