Applying platform strategy to EdTech

Platform, like product, program, or project (why do all the nebulous words start with “p”?), is a word we use liberally in business and technology. But what exactly is a platform? Is it just some behind-the-scenes technology, the software system that undergirds a product portfolio? Or is it something else? And what does it mean for educational technology providers?

A platform is, at heart, a value model. It is a business or product that derives value by creating an environment to connect one type of entity to another type of entity. I find it helpful to think about platforms in contrast to their opposite, the pipeline model. Many strategists have written extensively on the notion of the pipeline vs. the platform. For a primer, see this Harvard Business Review article: Pipelines, Platforms, and the New Rules of Strategy (https://hbr.org/2016/04/pipelines-platforms-and-the-new-rules-of-strategy). A key quote: “Pipelines seek to maximize the lifetime value of individual customers of products and services, who, in effect, sit at the end of a linear process. By contrast, platforms seek to maximize the total value of an expanding ecosystem in a circular, iterative, feedback-driven process.”

Here’s the key: In a platform, the value comes not from optimizing the conversion of prospects into customers, but from optimizing the environment in which customers connect with something else or someone else entirely.

Confused? Let’s look at a real-world example: a hotel chain, a classic pipeline business. Hilton or Marriott succeed by marketing to travelers, getting more travelers to purchase their products (hotel rooms), making the travelers’ experience great, getting them to come back, and adding products (services, upgrades) along the way. It’s all linear.

On the other hand, a platform in the same industry is AirBNB. AirBNB doesn’t even own properties. Instead, it is a marketplace that connects one entity (travelers) to another (property owners). Its value is the ecosystem it creates and sustains. Travelers use AirBNB not because it satisfies their need for lodging, but because it connects them to other entities that satisfy their need for lodging.

With that in mind, let’s think about how platform theory might apply to educational technology. What are the entities that can be connected through an edtech platform? One answer: students to outcomes. Imagine a system that uses data to connect students (at any level, from K-12 to adult learners) to outcomes, including credits earned, graduation, skills mastered, jobs prepared for. 

Here are a few keys for an edtech provider seeking to succeed as a platform:

1. A robust data model. AirBNB works by knowing what travelers are looking for, in detail (“We’re a family seeking a 2-3 bedroom place in Brooklyn, NY for these particular 3 days, in this price range, with a nice kitchen, and it needs to be near transit”) and matching travelers to providers based on that data. In educational technology, this means knowing and tracking the details of a student’s history, skills, talents, interests, and performance, and then matching them to evidence of outcomes, like verification of knowledge, attainment of credits, readiness for new challenges, readiness for jobs.
2. Critical mass, built narrowly. This is a challenge for a platform.  AirBNB wouldn’t succeed if it just had a few providers, as consumers won’t use a platform unless there are multiple options.  Smart platform businesses solve this by building critical mass narrowly. AirBNB started by getting deep in New York City. Ebay started by getting deep in Pez dispensers, of all things.  For edtech, that might mean building depth on certain skill sets or subject areas, for certain types of outcomes (credits recovered, e.g.), or for certain grade levels before expanding.
3. Prioritize the network over efficiency. This is another risk of the platform. Once a product team has built a decent initial product, management can be tempted to accelerate the efficiency of the team’s output. And of course it’s important to minimize waste and produce quickly. But that shouldn’t come at the expense of the network or marketplace, especially at first. The edtech providers that win will do so by focusing on building an effective ecosystem, not by just optimizing processes.
4. A world-class user experience. User experience is especially important to platform businesses, since the platform isn’t ultimately the provider of value. Users of a platform demand minimal friction, maximum clarity, and occasional moments of sheer delight, or else they’ll head elsewhere.

Education technology is filled with amazing people doing amazing things with cutting-edge technology and proven pedagogy, like artificial intelligence and data science to predict performance and offer personalized learning, research-based adaptive apps that improve not just mastery of subjects but social-emotional learning, and game-based learning models to drive engagement. This is great and promising technical work, yes, but there’s also tremendous opportunity in this value model of an outcomes platform.

So I urge organizations in edtech: Build a robust data model that matches students to outcomes. Build an insanely usable UX that encourages schools, teachers, and students to keep coming back. Before optimizing efficiency, optimize network effects to maximize connections. And measure success by the frequency and accuracy of matches between students and outcomes. (“We delivered 14,623 meaningful new outcomes to students today!”)

Education organizations (vendors, schools, universities, instititions) able to discover and develop such a platform and get critical mass will find themselves in an enviable position, I think. Now: where are they?