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Use the Bill Gates advantage: Create platforms and eco-systems

If you want to dominate your business or socio-political environment, then you must learn the Bill Gates’ advantage in creating a platform and ecosystem rather than just a product(s).

According to “Strategy Rules,” a book written by two prominent business school professors, David Yoffie and Michael Cusumano, Gates’ ability to quickly grasp the value of an “industry-spanning platform rather than merely products” was what made Microsoft a dominant PC player within a few years.

“Bill Gates got it immediately,” Yoffie said. “It took Andy Grove 10 years to figure it out, and 20 years for Steve Jobs.”

Gates had this in mind when he built the Windows operating system, where third party developers were allowed to create software applications on top of it. By doing so, Windows was able to build a massive software ecosystem that helped it dominate the PC market for years.

Intel’s former CEO Andy Grove also saw this coming, and soon built microprocessors that were used across multiple industries.

Jobs, on the other hand, was always focused on building beautiful products that didn’t necessarily have a big set of partners supporting it like Microsoft did. It wasn’t until 2003 when Jobs realized this and released iTunes for Windows so PC users could start using Apple’s iPod on their computers. Even the first iPhone wasn’t going to have a store for third-party applications, but other execs at Apple convinced Jobs open up the iPhone operating system so outside developers could build their own applications on top of it in 2008.

“Jobs was always a product first, platform second kind of guy. But he figured it out eventually,” Yoffie said.

The authors point out the same thinking applies to the tech leaders of the next generation as well: Google’s Larry Page, Facebook’s Mark Zuckerberg, Amazon’s Jeff Bezos, and Tencent’s Huateng Ma all have a deep understanding of “platform thinking,” they said.

Really and truly, people in business for the long haul, must therefore think and create multi-dimensional platforms and ecosystems that get many others involved and thriving rather than just creating mono-directional products and services.



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