Leverage Economies of Scale to Grow Your Platform Business

The marketplace has experienced a remarkable shift with the rise of digital platforms—business models that use online infrastructure to facilitate interactions between groups. Data from Persistence Market Research estimates the digital platform market to grow from $9 billion in 2023 to $19 billion by the end of 2030.

Yet, after transitioning to a platform business model comes a crucial step: scaling.

If you’re struggling to build your platform business, here's an overview of how to use economies of scale to achieve long-term growth.

Building Your Own AI Assistant

Gen AI can save you time, but once you’re using it frequently, the process of repeatedly uploading the same background files and re-entering prompts for common tasks can really eat into your efficiency gains.

That’s why many generative AI platforms allow you to create custom AI assistants: what ChatGPT calls a “custom GPT,” Claude calls a “Project,” and Google Gemini calls a “Gem.” These assistants store elements of a prompt that you might want to use over and over so you don’t have to include them every time you ask the platform to help you with your recurring tasks and challenges. 

Listen and learn more here.

How Businesses Fail to Scale

The key to avoiding failure as a company grows is ensuring that business leaders agree from the very start on what its products, ideal customers, and internal processes are. Solidifying these is critical before scaling up, as they clearly define a company’s business model. 

Failing to do this step is one of the primary reasons some startups fail in the scaling process, as they didn’t have a clear vision of where their company should’ve gone before the unprecedented growth took place.

Here’s a closer look at what scaling means and its potential impact on your growing business.

Are You Quiet Firing?

As companies face tightening budgets, many may be considering trimming their workforce. But of course, outright layoffs are expensive and risky. That’s why some have turned to a subtler strategy: quiet firing, or intentionally creating a hostile work environment that encourages people to leave “voluntarily.” 

The HBR authors’ new research sheds light on how employees can tell if they’re being quietly fired, including changes to work responsibilities, compensation, and communication, and offers ten tactical steps workers can take before throwing in the towel.

Are You Defining Performance by a Single Number?

According to David Rock and Beth Jones, a few years ago, they noticed around half a dozen courageous companies beginning experiments to remove ratings from their performance management systems.  Is your company one of them?  Companies were still differentiating performance in various ways, and still using a pay-for-performance approach, just not through a simple rating system.

Rather, companies prefer to emphasize ongoing, quality conversations between managers and their teams.

Learn more:  Why More and More Companies Are Ditching Performance Ratings

Article of Interest: How to Defeat Stress

As a business owner, you're pulled in a million different directions, making critical decisions that affect the livelihood of not just yourself but your family and all the people who work for you.  How do you go about minimizing or even defeating stress?  This is how it might play out:

You have too much on your plate, deadlines are looming, people are counting on you, and to top it all off, you still have holiday shopping to do. You are under a lot of pressure — so much that at times, you suspect the quality of your work suffers for it. This is life in the modern workplace.

Does that sound like you?  Then read on with this informative article on how to defeat stress:

Nine Ways Successful People Defeat Stress by Heidi Grant Halvorson - Harvard Business Review

Note:  I don't know about you but just by looking at the photo above calms me down. 

Photo courtesy:   ©2013 Laurel Delaney.  All rights reserved.  "Chicago Lakefront 4/13/13"

Article of Interest: Presentations That Matter

Who hasn't put together what they thought was a killer presentation in their professional lifetime only to find out later on -- during the presentation -- that the audience has a glazed-over look in their eyes, some even falling asleep?

Fear no more.  One of my favorite presentation experts, Nancy Duarte, in the following article provides two big ideas on how to make the audience the stars of your presentation and deliver a presentation that matters.

Create a Presentation Your Audience Will Care About

About Nancy Duarte:  She is the author of the all-new edition of the HBR Guide to Persuasive Presentations, as well as two award-winning books on the art of presenting, Slide:ology and Resonate. Her team at Duarte, Inc., has created more than a quarter of a million presentations for its clients and teaches public and corporate workshops on presenting. Follow Duarte on Twitter: @nancyduarte.

Illustration credit:  Nancy Duarte, Harvard Business Review

Blog Post of Interest: How Stimulating Should Your Work Environment Be?

Is your lifestyle designed to serve as a smokescreen - hiding the fact that what you do doesn't matter?  If you are running a meaningful and successful business, clearly that should not be the case.  But are you?

How can you tell whether you are pushing your employees too much -- that they never have a moment to think outside the box, create new breakthroughs or even look for new opportunities to help grow your business?

Think there's an easy solution?  Guess again.

The answer isn't a simple "yes" or "no."  While Kreider argues that we need a bout of idleness to get inspired and work more effectively, there is evidence that workers benefit from busyness. 

Susan David at the HBR Blog Network addresses this compelling topic and more in "Is Busyness Bad For Business?"  Take the time to read the reader's comments.

My tip for today is:  "Be idle.  Get inspired!

Article of Interest: Wise Up

Around this time of year, we tend to reflect on all the things we did well (or in some instances -- not so well) to keep our business thriving during turbulent times. And one issue I constantly challenge myself on and wonder if you do too, is this: How effective have you been as a top executive?

The late Peter Drucker can help us address this question. As I was I straightening out my office this week, I stumbled upon a June 2004 edition of the Harvard Business Review and came across his classic article entitled, "What Makes An Effective Executive." I re-read it on the spot. It's a magnificent piece and one that is a must-read for anyone interested in becoming a more impactful leader, especially when we are readying up to face a brand new year.

The article begins like this:

"Great managers may be charismatic or dull, generous or tightfisted, visionary or numbers oriented. But every effective executive follows eight simple practices."

And the eight simple practices are as follows:

1. They asked, "What needs to be done?"
2. They asked, "What is right for the enterprise?"
3. They developed action plans.
4. The took responsibility for decisions.
5. They took responsibility for communicating.
6. They were focused on opportunities rather than problems.
7. They ran productive meetings.
8. They thought and said, "we" rather than "I."

Drucker throws in a bonus practice at the end of the article: "Listen first, speak last."

You can order an e-copy here.

In preparation for 2010, think about these eight best practices and how you might apply them as you grow your business. It only requires a healthy dose of discipline.

Article of Interest: Leading Clever People

To make sure clever people do their best work at your company, you must harness their talents.

Who most determines your company’s success? Clever people—employees whose knowledge and skills enable them to produce disproportionate value for your firm. Think the pharmaceutical researcher who formulates a new drug, or the programmer who creates a new piece of code. Their single innovation may bankroll their entire organization for a decade.

To make sure clever people do their best work at your company, you must harness their talents. But that isn’t easy: Clever people don’t want to be led. They don’t care about titles or promotions. And they’re easily bored.

What to do? Find out more here.

Sound Advice: Is Innovation Everything?

In case you missed it, Harvard Business Review announced the 2006 McKinsey Award winners and our keynote speaker at last year's WPO conference in Chicago -- Gary Hamel -- is a winner! Read more here and then visit John Hagel's blog for a commentary on Gary's contribution.

Gary's article in HBR, "The Why, What, and How of Management Innovation," is a available for purchase online.