Linear product versus digital platform
In the previous chapter, while discussing the characteristics of platform business models, we looked at how the foundation of a digital platform is multidimensional, whereas traditional products are linear. If we expand this concept further, we will see that four major distinguishing factors set digital platforms apart, as outlined here:
- Entity versus mediator
- No ownership of products or content
- Users on both sides
- Accumulation of producers
Entity versus mediator
In terms of linear products, producers directly communicate or connect with consumers, but digital platforms are mediators. They act as a middleman and bind all parties involved in delivering value, such as producers, consumers, and intermediaries such as banks and dashers, who all communicate through the platform to complete a transaction. For example, if a user is ordering food from a restaurant's website, the restaurant is the producer who is also...
