You think so, but investors have realized these unprofitable "Facebook". Because of their platform-based business model, this investment is very promising.
Platform business model
The so-called platform type refers to a form of interconnection between users and merchants and between users, and their interdependence and mutual reinforcement. Once such a business model is started, it will ride the dust, and it will be difficult for competitors to break it in the future.
Generally speaking, platform-based business models are divided into bilateral platforms and variable platforms. Bilateral platforms not only refer to central enterprises (docking merchants and users, equivalent to intermediary links), but also include stakeholders participating in both parties, such as credit card companies connecting consumers and merchants. There are more participants in multilateral platforms, such as mobile platforms, covering users, merchants, content providers, service providers and other stakeholders.
However, the existence of multi-stakeholders is not a platform-based business model. For example, some department stores will purchase goods from suppliers and sell them to community residents. On the surface, they are also connected with suppliers and residents, but in fact their transactions are isolated, that is, residents have no direct contact with suppliers. Compared with credit card companies, consumers can conduct direct transactions with merchants through the credit card platform. So this can only be regarded as a unilateral city.
The Soul of Platform Business Model
If the characteristics of interdependence and mutual reinforcement between platform-based interests become stronger, it will show a positive feedback, which is also the soul of platform-based business model. There are two kinds of positive feedback.
The first is the positive feedback from different types of stakeholders. Take Suning, a home appliance chain store with rental income, as an example. The more home appliance suppliers, the more types and brands of home appliances. For example, there are brands such as refrigerator, air conditioner and induction cooker in the store, and brands such as Gree, Haier and Midea will attract more consumers. On the contrary, the more consumers, the stronger the terminal consumption power that can be reached through stores, which will naturally attract more home appliance suppliers. On this basis, if stores, suppliers and consumers can be satisfied with each other, stores and suppliers can be profitable, and consumers can get good and cheap goods, it is naturally happy.
However, there are also many people whose platform-based business model has collapsed because of the lack of balance among stakeholders, such as the 263 mailbox that once swept the Internet. Before 2002, 236 mailbox was the leading mailbox, and now 163 mailbox is very famous, and it can only be regarded as the second echelon at that time, not to mention the unborn QQ mailbox and Gmail mailbox.
Free was the biggest selling point of 263 portal at that time, which contributed a lot of traffic and advertising revenue at that time. However, portal 263 made a subversive decision in 2002: mailbox charges. In this way, users will quit, and the competitor next door, 163, will increase the mailbox capacity based on the free mailbox to seize market share. In a short time, 263 users almost collectively defected and embraced 163. At this point, 163 mailbox was successful and became the leading mailbox in China.
However, because of the shrinking user scale, 253 is not attractive enough to advertisers, and the positive feedback of different stakeholders has been destroyed, and it has never recovered.
The second is the positive feedback from similar stakeholders. Take QQ as an example. The more QQ users, the more communication between users, and the greater the attraction to new users. After all, people have the nature of joining in the fun and are social. This is also the reason why there are few latecomers after the emergence of this social software, because most of the friends of users who have already used QQ are QQ users. Changing a new social software requires a group of friends to move as a whole, and the conversion cost is too high. The longer it takes, the more users there are, the greater the stickiness of users, and the greater the probability of realizing traffic, so this platform has potential commercial value.
abstract
Investors are willing to give money to companies that burn money because they have a platform-based business model, and this business model has many stakeholders, interdependence and mutual promotion, a considerable number of users and businesses, rapid growth and commercial liquidity.