This article originally appeared in Forbes on August 10th, 2017:  View Here

A cursory examination of the S&P 500 leaderboard reveals that the shift from asset-heavy to digital-centric business models is gaining steam. This is not just a transition from selling manufactured goods and services to bits and bytes, but rather a change in how organizations drive value for customers. Corporations have capitalized on innovations from machine learning to smartphones to cloud computing and delivered the results to their customers via a relatively new business model: the platform.

While previously a technology company’s value was equivalent to the value of its product, a platform business encompasses the value of the sum of its applications, network and openness to third parties.

While a product is a good or service, a platform is a gateway for access. If a hotel room is a product, then Airbnb is the platform. Because platform companies are asset light, they’re flexible and scalable by nature. It’s much easier and cheaper to add code to Airbnb to allow users to book rooms in a new city than it is to evaluate and purchase the equivalent number of hotel rooms. This asset-light model makes platforms attractive to investors who see the growth opportunity and to business customers who value a partner that can scale and adapt with them.
(more…)