WHAT’S THE DIFFERENCE BETWEEN DIGITAL PRODUCTS & PLATFORMS?
Just as we think differently of how we grow grapes and how we make wine, digital products and platforms yield value in different ways.
The way in which we think about digital products and platforms can impact the way we manage and prioritize them. Referring to products as “front-end” and platforms as “back-end” might be true but it doesn’t explain the value each has on its own. Understanding the differences will enable you to leverage each of them appropriately.
Digital products provide experiences, platforms provide capabilities
Experiences are composed of capabilities.
An airline provides its passengers the experience of traveling to and from a destination through different experiences and touch-points. Those experiences are comprised of the capability to search for flights, book, and check-in. Digital products are the touch-points between end-consumers and the business. They provide value by facilitating interaction, engagement, and a combination of our capabilities. Platforms are the underlying set of services & assets that provide one or more capabilities.
Understanding your opportunities for product experiences can help inform the highest impact platform capabilities you need.
Digital products serve D2C, platforms serve B2B
Especially in the digital age, organizations must provide different channels to reach and engage different users.
The experiences provided by digital products are primarily direct to consumer (D2C). Platforms have the responsibility of being interoperable not only with other internal platforms but also interface with the array of digital products and potentially external partners. The teams surrounding products or platforms have to keep this in mind as they should operate in alignment with those business models.
Considering which type of market you want to focus on, it helps to know the trade-offs that come with prioritizing products or platforms.
Digital products are streamlined, platforms are extensible
You can be generic or specific but it’s difficult to both at the same time.
A company that focuses on fast food delivery will function quite differently than a company that provides delivery & shipping management. A great set of platform capabilities can enable a broad set of experiences but doesn’t solve any specific experience deeply. The inverse is true for product experiences that solve a specific problem but will have difficulties abstracting their capabilities for adjacent use cases.
Balancing both are critical and will depend on the maturity of your portfolio.
Just as we think differently of how we grow grapes and how we make wine, digital products and platforms yield value in different ways.