The Next Age of Disruption by MIT Sloan Management Review

Author:MIT Sloan Management Review
Language: eng
Format: epub
Publisher: MIT Press

Hybrid companies contain both innovation and transaction platforms. Their strategies are novel because, in the early years of the PC and the internet, innovation and transaction platforms were distinct businesses. Connecting buyers and sellers, advertisers and consumers, or users of social networks appeared to be a fundamentally different activity from stimulating outside companies to create complementary innovations. In the past decade, however, a growing number of successful innovation platforms have integrated transaction platforms into their business models. Rather than lose control over distribution, the owners of these platforms have sought to manage the customer experience, like Apple has done with its App Store. Likewise, some successful transaction platforms have opened their application programming interfaces (APIs) and encouraged third parties to create complementary apps and services. The owners of these platforms, such as Facebook and WeChat, recognize that not all innovation can or should be internal. Other prominent examples of hybrid strategies include Google’s decision to buy Android, Amazon’s decision to create multiple innovation platforms around Amazon Web Services and Alexa/Echo home AI devices, and Uber’s and Airbnb’s decisions to allow third-party companies to offer services that complement their ride-sharing and room-sharing platforms. Today, the most valuable global companies (which we mentioned above) all follow hybrid strategies.

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