A born global business model
With the platform business model, scalability depends on establishing partnerships and networks nationally and internationally and not investing in internal resources like the old linear model. To establish a global platform, the internet and the use of open-source resources have a central role in reducing transaction costs of international information.
Today we see small entrepreneurial digital platform start-ups, also called Born Globals, which seek to derive a substantial proportion of their revenue from selling products in international markets from their founding. Born globals leverage their networking capability to identify and exploit market opportunities. They often facilitate and develop knowledge‐intensive products and support international performance from day one. These firms appear especially adept at allocating their resources under asset parsimony and have a strong learning orientation. They invest in networking, partnership, and knowledge building and sharing and do not invest in internal resources like local sales presence and use organic rather than dynamic sales and marketing campaigns.
The platform business model significantly broadens Born Globals nexus, using networks and the collective power of the ecosystem unparalleled in the old industry paradigm. Moreover, with open digital capabilities like matching algorithms, cloud computing, and social media platforms, many small platform companies participate in global competition.
“Digital platforms companies can tap on value generated cross-border and through ecosystems and are changing international business rules.”
The platform business model connects and matches multiple sets of users, where the infrastructure provider is the platform owner. The core transaction is the key in the platform's purpose and design, or the "factory" and the way it produces value. Today, this factory can be in the cloud, scalable, and using available digital capabilities in the cloud. To scale is not about buying the market but by serving it on your platform with core transactions that produce value for its participants. The platform's core process is the interaction between manufacturers and users. The efficiency/fungibility in this core transaction, partnerships with clear roles, a low marginal cost, and an active community/ecosystem of users are essential drivers to scale and build a profitable platform business model.