Platform design framework: conceptualisation and application

ABSTRACT

Technological platforms enable actors to connect their resources across markets, creating value through complementarities and network effects. The design choices related to different aspects of a platform are crucial for ensuring value creation. Building on earlier literature, we have developed a framework for platform design, involving four elements: 1) platform architecture, 2) value creation logic, 3) governance, and 4) platform competition. Using a design science approach, we provide an empirical illustration of design choices in the Mobility-as-a-Service (MaaS) platform DORA. The study presents an overarching framework for platform design, with an empirical use case illustrating its applicability.

KEYWORDS:

• Platform
• design
• value creation
• ecosystem

1. Introduction

There is growing interest in technological platforms where value creation is based on interaction between different actors, such as content providers and users. Examples include rabidly growing businesses such as AirBnB and Über, but also more established companies, such as Google and Amazon.com. Platforms are seen as hubs for value exchange (Eloranta and Turunen 2016), facilitating both direct and cross-platform network effects (McIntyre and Srinivasan 2017).

Value creation in platform ecosystems is affected through many choices, including governance (Tiwana, Konsynski, and Bush 2010; Gawer 2014), competition (Rochet and Tirole 2003; Van Alstyne, Parker, and Choudary 2016), openness (Parker and Van Alstyne 2008; Eisenmann, Parker, and Van Alstyne 2009), as well as quality and how consumer expectations are managed (Zhu and Iansiti 2012). Platforms also need to balance between value generated for and captured by various parties (Van Alstyne, Parker, and Choudary 2016). Following Gawer (2014), we view platforms as multi-sided markets, but also as engineered, designed entities (Dell’Era et al. 2017). To understand platform value creation, we argue that it important not to just examine aforementioned choices in isolation, but to focus on platform design, i.e. the configuration of specific design elements when building a new platform. To this end, we have conducted an empirical study following the design research methodology (Hevner 2007; Peffers et al. 2007).

Our study addresses two research gaps and offers related contributions to the platform literature. First, we focus on the early-stage phases of platform launch. While the literature provides multiple examples of successful platform-based business models (Zhu and Iansiti 2012; Bonchek and Choudary 2013) and examples of platform launch strategies (Parker, Van Alstyne, and Choudary 2016), literature on the practical execution of the processes preceding the platform launch phase is limited. Second, we take an explicit design perspective to platforms. Despite extensive exploration of the success factors of platform-based business models and ecosystems (e.g. Cennamo 2016; McIntyre and Srinivasan 2017), there remains a need to understand how platforms and related value creation are designed, and what are the key design challenges, processes and outcomes.

In the following, we first discuss the conceptual approach for developing a framework for platform design. We provide an overview of platform literature related to the core design elements in four categories of platform architecture, value creation logic, governance, and platform competition. Following this, we introduce design science research methodology, and illustrate platform value design by using the developed framework. The study ends with discussion and implications.

2. Conceptual background

2.1. Approach and aims

A ‘design’ means creating an artefact that does not yet exist (Vaishnavi and Kuechler 2015). Design can be both a process of bringing into being something new and the resulting artefact (Peffers et al. 2007). Building on this, we define platform design as a scheme for creating conditions for sustaining a multi-actor platform-based business.

In platform-based ecosystems the value creation process is uncertain, with multiple stakeholders involved. To get their commitment, attention and inputs, an ex-ante design is needed. Although platform value creation processes vary (e.g. McIntyre and Srinivasan 2017), certain issues are similar across industries. We label these issues as core design problems, elaborated in four categories: platform architecture, value creation logic, governance, and platform competition. Identifying these guides the core design choices, determining the specific setup over different design elements of a platform-based ecosystems and business models. These need to be considered prior to the platform launch to ensure that the typical chicken-and-egg problems (i.e. motivating initial user or supplier adoption before cross-side network effects are realised, e.g. Parker and Van Alstyne 2005) and other critical issues are resolved.

Building on organisational design literature (e.g. Mintzberg 1979; Burton, Obey, and DeSanctis 2011), we view platform design as a method to manage two interconnected problems. First, how to facilitate and regulate value creation and capture into smaller components and tasks, and second, how to coordinate these to best enable the realisation of platform value and the goals of the ecosystem. Based on existing organisational design and platform literature, we have identified four main categories of core platform design problems, discussed in the following.

2.2. Platform design framework

2.2.1. Platform architecture

Similarly to how the design of a product platform involves the problem of multi-criteria comparison (Meyer and Lehnerd 1997), also platform-based ecosystems have multiple possible building blocks, for which the designers have to make compromises. The platform architecture focuses on problems of setting up the platform actors, the market, and the fundamental structure.

The first issue is to determine the main purpose and core interaction, including main interactions that take place in the platform, and related mission and goals (e.g. Gawer and Cusumano 2008; Van Alstyne, Parker, and Choudary 2016). As platforms are built around two- or multi-sided markets, the second step includes identifying the relevant market structures and key actors representing different structures by identifying the set and the types of platform users and the minimum required stakeholders for the system to be operated (Morris and Ferguson 1993; Van Alstyne, Parker, and Choudary 2016). Further considerations include platform openness and possible restrictions for participation (Hagiu 2006; Parker and Van Alstyne 2008; Eisenmann, Parker, and Van Alstyne 2009). The levels of openness of platform architecture (actors’ access to resources and information) and governance (shaping the rules of trade and sharing) determine possibilities for new value creation (Benial, Hilkert, and Hess 2015). While openness enables more freedom for the actors to create value and innovate, too much openness restricts the platform leader's ability to regulate the core interaction. For instance, mobile operating systems (as multi-sided platforms) operate differently in terms of openness. In fact, the open approach of Google's Android and the more regulated Apple's iOS illustrate how various degrees of openness can co-exist in the markets.

2.2.2. Value creation logic

Creating value on platforms involves design choices related to the roles of the actors using or joining the platform, the value proposition(s) for those actors, value creating network effects, and the revenue model of the platform.

First, the participants need to fill certain actor roles within the platform for value to be created. These roles should be identified early in the platform design by a participatory process (e.g. Jacobides, Knudsen, and Augier 2006; Le Masson, Weil, and Hatchuel 2009; Bosch-Sijtsema and Bosch 2015). However, the roles may shift rapidly (Van Alstyne, Parker, and Choudary 2016), and participants may have multiple roles. Thus, platform designers need to identify the possible beneficiaries of the platform (Jacobides, Knudsen, and Augier 2006; Le Masson, Weil, and Hatchuel 2009; Van Alstyne, Parker, and Choudary 2016) and how to achieve their commitment (Hagiu 2006). Key stakeholders’ commitment may be secured by creating a sense of ownership of the platform by e.g. distributing leadership or decision rights (Tiwana, Konsynski, and Bush 2010), inviting them to co-create platform innovations (Ceccagnoli et al. 2012), or utilising rules and policies that impose switching costs (Kenney and Pon 2011).

Both users and platform complementors (e.g. third party content providers) are heterogeneous in their motivation and attributes (Cennamo 2016; McIntyre and Srinivasan 2017). Therefore, platform design needs to address the value creation mechanisms, benefits and value functions from each stakeholder's perspective to define value propositions for each (e.g. Le Masson, Weil, and Hatchuel 2009; Van Alstyne, Parker, and Choudary 2016). For example, for the customer this can mean money and time savings, and for the supplier (or complementor) increased brand awareness and access to additional customers.

Network effects (where each user's value increases due to adoption by further users; Katz and Shapiro 1985) constitute a fundamental mechanism of how platform value is created. Such effects appear both in the demand side (e.g. the number of Facebook users improves value for all users and the cross-side (e.g. the number of users creates value for the providers, and vice versa). Therefore, one of the most crucial design problems is how the direct and indirect network effects work, where they exist, and how they impact on the adoption and use of the platform (Evans 2003; Rochet and Tirole 2003; Parker and Van Alstyne 2005; Armstrong 2006; Eisenmann, Parker, and Van Alstyne 2006; Gawer and Cusumano 2014).

Finally, it is important to consider how value is captured/appropriated. A key interest in platform studies has long been the optimal price structure and revenue model for the platform (Rochet and Tirole 2003; Armstrong 2006; Economides and Katsamakas 2006; Hagiu 2006). In multi-sided markets connected by a platform, one side might be more price-sensitive than others (e.g. Adobe PDF users), and therefore it is important to consider which side should be subsidised and which monetised (Eisenmann, Parker, and Van Alstyne 2006).

2.2.3. Governance

The health and longevity of a platform-based ecosystem depends on the effective governance of the platform. Governance design choices include decisions on leadership (Iansiti and Levien 2004; Gawer and Cusumano 2008, 2014) and ownership (Nocke, Peitz, and Stahl 2007; Tiwana, Konsynski, and Bush 2010), and the related management practices for the platform (Boudreau and Hagiu 2009; Van Alstyne, Parker, and Choudary 2016). Together, these issues determine how decisions are made and which actors are involved in making them. Some platforms involve strong leadership and clear ownership, which may allow for strong growth trajectories. For instance, Amazon Marketplace, where the platform has a clear owner and strong leadership, has enjoyed rapid growth of both users and third party sellers over the platform (Ritala, Golnam, and Wegmann 2014). However, more distributed models have successfully been applied in platforms such as Linux which relies on open source development (Boudreau and Lakhani 2009).

Designing the platform governance includes also consideration of platform rules: the common regulations, rules and ‘laws’ that are enforced by the platform leader or other instances for the participants (Boudreau and Hagiu 2009; Van Alstyne, Parker, and Choudary 2016). Important choices include data and information protection (e.g. user identity), content creation, and who regulates this content (consider e.g. the variety of YouTube video contents).

2.2.4. Platform competition

Beyond the issues mentioned so far, platform designers also face broader strategic and tactical problems related to platform launch, its competitiveness against rivals, the development of the platform, as well as the logic of growth and scalability of the platform.

First, platform designers need to consider platform launch and diffusion, attracting participants, and ensuring access to the platform (e.g. Van Alstyne, Parker, and Choudary 2016). Platforms tend to face the ‘chicken-and-egg’ problem, where users on each side of the platform are motivated to join only once the other side is sufficiently populated. This is typical to any platform that has users on one side and content providers on the other. While users are reluctant to join platforms with little content, content providers equally find platforms with few users unappealing. Therefore, different strategies for platform launch have been discussed, focusing for example on reaching critical user mass (Evans and Schmalensee 2010) and launch timing of platform technologies (Bhargava, Kim, and Sun 2013).

Second, it is important to consider platform competitiveness against incumbent platforms. Platforms are sometimes subject to ‘winner-take-all’ dynamics (Eisenmann, Parker, and Van Alstyne 2006), where it is difficult to occupy markets where dominant platforms exist. However, a unique niche for value creation may still enable new platforms to enter the markets (Gawer and Cusumano 2008), as demonstrated by various sharing economy companies, such as Airbnb (Kenney and Zysman 2016). Designing unique competitive positioning to the platform provides a feasible starting point.

Finally, setting an ex-ante framework for the development of platform over time is crucial as well. This includes innovation and learning and platform growth. The former refers to choices of how the platform is renewed; who takes part in the development (e.g. the users or the platform owner) and how to ensure innovation possibilities for different sides of the market (e.g. incentivizing and enabling third party content developers’ innovation). Platform growth relates to the scalability of the platform. Some platforms are naturally more scalable (consider Facebook vs. a specialised professional platform), but design choices can nevertheless influence growth. These include e.g. openness of the platform and thus relationships to other extant platforms (e.g. Tripadvisor and Google). In addition, the probability of customers to adopt a platform (such as a gaming platform) rises, if their specific needs are met (providing games in a certain genre) (Dubé, Hitsch, and Chintagunta 2010).

An integrated framework of the core platform design problems and related literature references is shown in Table 1.

Table 1. Platform design framework.

Problem focus	Core design problem	Literature references
Platform architecture	Describes the structure of the actors, market structure and fundamental setup of the platform
Core interaction	What is the main purpose of the platform? What is the (core) interaction that takes place in the platform? What are the value creating assets being transacted?	Gawer and Cusumano (2008); Katz and Shapiro (1994); Le Masson, Weil, and Hatchuel (2009); Tiwana, Konsynski, and Bush (2010); Van Alstyne, Parker, and Choudary (2016)
Market structure	Which markets are involved in the platform (two-sided, multi-sided markets)?	Parker and Van Alstyne (2005); Rochet and Tirole (2003)
Key actors	Who are the actors representing different market structures and providing main functions?	Le Masson, Weil, and Hatchuel (2009); Morris and Ferguson (1993); Van Alstyne, Parker, and Choudary (2016)
Platform openness	How open is the platform and what is the strategy to manage openness? How openly is the data and information shared?	Eisenmann, Parker, and Van Alstyne (2009); Gawer and Henderson (2007); Le Masson, Weil, and Hatchuel (2009); Morris and Ferguson (1993); Schilling (2009); Van Alstyne, Parker, and Choudary (2016); Boudreau (2010); Economides and Katsamakas (2006); Gawer (2014)
Value creation logic	Defines the benefits of the platform and how each user contributes to value creation i.e. describes value functions for platform users.
Actor roles	Who benefits from the platform and how? What are the roles of the stakeholders and how will they change? How to achieve commitment of the stakeholders?	Van Alstyne, Parker, and Choudary (2016); Le Masson, Weil, and Hatchuel (2009); Jacobides, Knudsen, and Augier (2006); Hagiu (2006)
Value proposition	What are the different value propositions for different participants?	Le Masson, Weil, and Hatchuel (2009); McIntyre (2011); Tellis, Yin, and Niraj (2009); Van Alstyne, Parker, and Choudary (2016)
Network effects	How do network effects work? Who is needed to enable network effects?	Armstrong (2006); Eisenmann, Parker, and Van Alstyne (2006); Evans (2003); Gawer and Cusumano (2014); Katz and Shapiro (1985); Le Masson, Weil, and Hatchuel (2009); Parker and Van Alstyne (2005); Rochet and Tirole (2003); Van Alstyne, Parker, and Choudary (2016)
Revenue model	What is the price for participating for each stakeholder?	Armstrong (2006); Economides and Katsamakas (2006); Eisenmann, Parker, and Van Alstyne (2006); Evans (2003); Hagiu (2006, 2009); Katz and Shapiro (1985); Parker and Van Alstyne (2005); Rochet and Tirole (2003)
Governance	Describes the common rules, laws, practices and managerial level of the platform.
Leadership	Who manages the platform and how?	Gawer and Cusumano (2008, 2014); Iansiti and Levien (2004); Katz and Shapiro (1994)
Ownership	Who owns the platform?	Nocke, Peitz, and Stahl (2007), Tiwana, Konsynski, and Bush (2010)
Platform rules	What types of rules are enforced? How are the services/content regulated? What consumers, producers, providers, and competitors are allowed to do?	Van Alstyne, Parker, and Choudary (2016); Schilling (2009); Boudreau (2010)
Platform competition	Describes the setup for launching the platform and competitive selections.
Platform launch	How to ensure access to the platform? How to attract users from different sides of the platform? How to solve-the chicken-and-egg problem?	Van Alstyne, Parker, and Choudary (2016); Gawer and Cusumano (2008); Economides and Katsamakas (2006)
Platform competitiveness	How does the platform compete against incumbent solutions? What is the unique competitive advantage of the platform?	Rochet and Tirole (2003); Eisenmann, Parker, and Van Alstyne (2006); Gawer and Cusumano (2008, 2014); Armstrong (2006)
Innovation & learning	Are platform innovations needed and how are innovation targets set and approved? Who are involved to the platform development and how?	Le Masson, Weil, and Hatchuel (2009); Adner and Kapoor (2010); Boudreau (2010); Gawer and Cusumano (2014); Gawer and Henderson (2007)
Platform growth	How will the platform grow? How big and scalable is the platform intended to be?	Van Alstyne, Parker, and Choudary (2016)

3. Method and data

3.1. Design science research and DORA

The study follows the Design Science Research (DSR) approach. The research produces an artefact – a specific framework for platform design – including core design problems divided into four categories discussed above. Insights from theory are combined with empirical research around the development of a platform called DORA (Door-to-Door Information for Airports and Airlines). DORA is an organised information system (IS) which integrates and exploits mobility information to optimise door-to-door travelling, to connect different actors of the mobility business and provide value for the networked actors. As the goal was to create knowledge and understanding to be used in solving managerial problems by building and applying a designed artefact (Jelinek, Romme, and Boland 2008), design science research methodology was seen especially applicable for this context.

Although the DSR approach is quite new in management research (Jelinek, Romme, and Boland 2008; van Aken and Romme 2009; Sein et al. 2011), it is widely used in IS research (Iivari 2007). The concept of a design artefact is broad, including models, methods, constructs, design theories, social innovations, and previously unknown properties of resources. The approach offers a possibility for future-oriented research, as well as making managerial design propositions and creating new academic knowledge. (Gregor and Hevner 2013) Therefore, the DSR approach is particularly appropriate for understanding platform design in both theory and practice (cf. Jelinek, Romme, and Boland 2008).

3.2. Research process and data

We have followed the guidelines of DSR (Hevner et al. 2004; Peffers et al. 2007; Sein et al. 2011), including consideration of the relevance of the research (bridging the conceptual environment and design science activities), the design cycle (building and evaluating the research process and design artefacts), and the rigour cycle (connecting the research with existing knowledge and experiences) (Hevner 2007). Figure 1 provides detailed information of the research in the DSR context.

Figure 1. Design science research methodology (adapted from Peffers et al. 2007).

The artefact, the platform design framework, was designed based on existing literature by combining insights from product design, organisational design and platform ecosystems. The framework was developed based on identified problems within DORA platform development, connecting different actors of mobility business.

The theory-based framework was tested and evaluated within several workshops in 2016 with experienced representatives of the key stakeholders of the platform (see Figure 2). All discussions were facilitated by a researcher, accompanied by another taking notes. Theoretical memos about initial interpretations were made after the debriefing of group discussions. To ensure the validity of the study, triangulation of data was used, as field notes and questionnaires (and other data sources, such as airport websites) were combined for analysis. Providing a summary of the reports for participant validation, and reviewing preliminary findings by multiple researchers were used to ensure credibility and confirmability (Miles and Huberman 1984). Furthermore, an overview of the findings was presented to academics and practitioners for review and feedback. Further, research rigour was ensured by using the DSR principles (Hevner et al. 2004; Hevner 2007), involving the key stakeholders in the design, confirmation and evaluation process of the core design problems and choices, as well as the iterative development of the platform design framework.

Figure 2. Research workshop information.

4. Results: developing platform design for DORA

The platform design process starts by identifying the boundary business conditions and setting targets based on these conditions. These are referred to as core design choices. In the following, we have derived these choices for the DORA platform by utilising the platform design framework to create an ex-ante design for this illustrative case. The core design choices for DORA were identified together with a group of business experts in several workshops. In Table 2 we provide examples of these choices, divided into groups according to our framework. The following sub-sections elaborate further on how the choices are manifested in the DORA case. This section serves as empirical validation and an implementation example of the literature-based framework.

Table 2. Platform design framework in the context of DORA – examples of core design choices.

Design category	Examples of core design choices
Platform architecture
Core interaction	Searching, combining, connecting and relaying mobility information.
Market structure	Main markets include the mobility industry (public and private companies), airports, authorities (city and society level, transport information centres) and mobility service providers, e.g. car renting companies. The other side of the multi-sided market are individual passengers. The initial business context is mobility to, in and from airports, but may expand to e.g. analytics.
Key actors	1) Passengers (end-consumers) of mobility services 2) Airports and transport operators as supply-side users 3) Public bodies and authorities as data providers 4) Platform provider (maintaining DORA)
Platform openness	Joint standard setting, partially open data and API. Detailed policy for data sharing is required.
Value creation logic
Actor roles	DORA mobility information and services are used by passenger to optimise travelling. The supplier shares data and provides mobility services to users. Passengers’ choices provide information for the platform and the suppliers use it to develop the services. Public bodies and authorities provide data and complementary services. The platform provider manages the interactions and captures, controls and recombines information into valuable offerings.
Value proposition	Passengers: seamless, reliable and fluent user experience with minimal costs. Suppliers: Improvements in operations and service quality. Powerful distribution channel without additional investments. Morally and economically fair participation, including distribution of financial benefits and costs. Society: Greener and a more accessible and inclusive mobility system.
Network effects	Access to multiple information sources and an abundance of supply and demand for mobility services on the platform are required for core interactions. The business is focused on the platform and the mobility information, while third parties may provide the end-user interface and utilise the services. Suppliers and authorities provide the necessary mobility information, while passengers provide the incentive for the aforementioned to participate.
Revenue model	Short- to middle term: Licensing of key technologies to non-competing regions and industry contexts. Middle term: Pay-per-use API access provided to mobility app developers and other B2B clients. Long term: Unique value creation by integrated information offering with ecosystem revenue sharing. Additional revenues from B2B service-products, such as market analytics and mobility asset use forecasts.
Governance
Leadership	Centralized governance where the platform owner enforces rules and policies that ensure fair competition and governs the entry and exit of individual organisations (contractually agreed standard terms of participation).
Ownership	To ensure the neutrality of the platform, it should be owned by a separate legal entity without direct downstream commercial interests.
Platform rules	To avoid excessive transaction and governance costs, the participants agree to a standard ‘rules for participation’ contract upon entry. Especially the handling, sharing and utilisation of mobility information are agreed on. The rules also enforce e.g. fair competition and facilitate collaborative development actions.
Platform competition
Platform launch	The core stakeholders were involved already in the development and design process. End-user testing is done through the DORA mobile app. The platform overcomes the chicken-and-egg problem by first tapping into the existing user bases of other mobility app developers by B2B API access sales and then evolving to a full platform business model, once a sufficient number of users is established.
Platform competitiveness	Unique features: seamless covering and integrating of the information concerning the whole journey, effortless travel planning, optimal routing, real-time disruption monitoring, and neutrality (independent actor) as a springboard for building trust.
Innovation & learning	Co-operation is required for technology, platform ecosystem and policy –level development. Technologies: standardisation, innovation and collaboration to find and develop missing technological pieces. Ecosystem: collaboration to widen the platform network and to increase the overall value and attractiveness. Third party platform integration. Policy: Freedom of choice, data protection.
Platform growth	Organic growth by additional organisations and city nodes joining the platform adds to the value of the ecosystem. Further growth is possible by integration to other platforms e.g. TripAdvisor, or by significant innovations, e.g. unified mobile ticketing.

4.1. DORA platform architecture

DORA is an example of a mobility information integrator (Motta et al. 2013) within the emerging Mobility-as-a-Service (MaaS) –business. These businesses create value by mobility servitisation by combining services and facilitating mobility data sharing to and between suppliers. In DORA, airports, transport operators and authorities form the core, providing a platform-based information system for travelling optimisation. Passengers receive the necessary information (e.g. schedules, disruption information, ticketing and navigation aids) through the platform by a mobile-based user interface (DORA app). To maintain the platform and manage the ecosystem, a separate legal entity unburdened by previous commercial or political interests is formed to assume a neutral coordinating role. Regions or cities may sponsor the platform to sustain its operation and growth until reaching a self-sustaining level of activity (e.g. Van Alstyne, Parker, and Choudary 2016). Furthermore, detailed choices of the openness level and strategy (especially concerning data) are required.

4.2. DORA value creation logic

The value creation in DORA is founded on better exploiting and connecting mobility-related data while mediating the consumption of mobility services. The business is thus dependent on managing information flows. Hence, a critical mass of committed stakeholders is needed, and yet the DORA platform provider may rely on third parties to provide the front-end service. The platform provider focuses on providing a stable and profitable cooperation setting with effectively activated network effects. The more suppliers and authorities participate, the better the quality of information (and services) becomes. Regarding the cross-side effects, a common dynamic is observed where more participating passengers mean more potential customers and value for the suppliers, and more suppliers improve the options available for the passengers. In DORA, both the number and diversity of suppliers contributes to value formation and the addition of a new mode of transport (e.g. rail) may add new multimodal travel options. As the network effects grow stronger, the commitment to the platform grows. Integrating a large number of suppliers and data enables further value propositions, such as analytics services. The basic operation of the platform creates benefits for the core parties: the passengers, suppliers and society (see Table 2). The societal actors may initially sponsor DORA motivated by positive spillovers, such as relieving congestion, and improving the mobility infrastructure effectiveness.

The DORA revenue model consists of three strategies for different time-frames. A strategy of technology licensing to non-competitive contexts is utilised to finance and inform further technological development while building reputation and market references. Revenues come from licensing fees and related technical services. The next step is active development of the user base and expanding to new markets through selling access to the DORA core services (e.g. routing, indoor location) to B2B customers, thus sidestepping the chicken-and-egg problem. Existing MaaS providers and platforms with complementary or partial solution offerings and customer base can be integrated to DORA. This application programming interface (API) access model seeks to reach a critical mass of mobility information and enable the final full-fledged platform strategy. There revenue sharing schemes reward the platform provider for ecosystem management and coordination efforts, while additional revenues are created from integrated information offerings. The specifics of the business models, like the detailed choices of e.g. customer segments, are left open to provide necessary room for adaptation, variation and flexibility to fit into evolving regulatory and market environments.

4.3. Dora governance

As DORA is an open, ongoing research project with public funding and a diverse consortium, only indicative governance choices could be discussed. However, before establishing the business, decisions must be taken regarding the platform ownership and leadership. Clear ownership by a separate legal entity (company) dedicated to DORA business would provide the best assurance of neutrality. Without prior commercial or political interests, it could credibly assume a strong leading role in coordinating collaboration and platform expansion.

As mobility is a market with strong public and private interests and regulation, the platform needs clear rules regulating the service provision and promotion, liability and compliance issues. The rules of participation would be provided to platform entrants in a standard template contract. The supplier side actors highlighted the need for specified data sharing rules and fair and transparent terms of participation.

4.4. DORA platform competition

To ensure access to the platform, and to increase its attractiveness and early adoption, suppliers were directly involved in the design process. The system was tested with multiple passengers contributing to the platform design, where e.g. a free-to-use interface for end-users and the importance of building trust through information reliability were highlighted. The main way to expand rapidly to sustainable user levels is the API access strategy discussed above.

DORA has unique competitive features in integrating the mobility information seamlessly, effortless travel planning, optimal routing with real-time disruption monitoring, and neutrality as an independent actor. These qualities result from the underlying technology, the design choices, and form the basis for competing against incumbent solutions. For instance, real-time disruption monitoring requires the cooperation of public authorities, and to cover the whole journey, the involvement of each stakeholder type is essential. In DORA, collaboration is a key for technology, platform ecosystem and policy –level development and innovation. The MaaS market is characterised by rapid development of innovative, competing offerings and solutions on the private sector, changing policy conditions, and strong public interest. To cope with the dynamic environment, collaboration and innovation on multiple levels is required. Examples of this include co-development of analytics services or unified mobile ticketing across the ecosystem.

Platform growth will predominantly happen organically by the joining in of additional providers, city nodes and customers. One crucial growth design objective for DORA is to enable consolidating the MaaS market in Europe. Due to design for openness and the preliminary 3-staged revenue model, DORA is highly scalable, benefiting from integration with other platforms. This can boost the growth levels and support user base extension by bringing in the committed actors and users of the integrated platforms.

5. Discussion and conclusion

By building on existing platform literature and the design science research approach, this study presents a framework for platform design, along with an empirical illustration. Our study contributes to the existing literature by providing systematic understanding of the platform design process that precedes platform launch. Implications for research and practice are discussed next.

5.1. Implications for research

Previous research on platform-based business has identified its impact on changing value creation models, especially due to the characteristics of multi-sided markets and network effects (for a review, see McIntyre and Srinivasan 2017). Academics have also highlighted the different roles and preferences of platform actors in value creation (e.g. Cennamo 2016), for instance in the context of Open Data Applications (Chien-Chih 2016). Our study contributes to this literature by providing an overarching framework of platform design choices.

The developed platform design framework brings to light the most crucial design choices preceding platform launch, such as considering the core actors, value propositions and how to attract key stakeholders to join the platform and thus ensure network effects. On the other hand, the framework also emphasises design choices that may not dictate early platform development, but are crucial for continued operation and sustainability of the business. These include e.g. clear choices of leadership and ownership strategies.

Our results stress the importance of involving different potential actors in the platform design process. For instance, before applying the platform design framework, it was believed that the DORA business model will be based on providing a mobile app. However, utilising the framework provided new insights, leading to reframing the business and the role of various stakeholders (see e.g. Bosch-Sijtsema and Bosch 2015). Mobility app markets are heavily congested with e.g. many airport and transport operators offering partial proprietary solutions. The competitive advantage rises from providing a hub through which this information is searched, shared, compared, analysed and connected.

Our findings also suggest that the platform business does not only require new approaches to strategy and leadership (Van Alstyne, Parker, and Choudary 2016), but also redesign of the overall business models and ecosystems. Towards this purpose, the developed platform design framework builds on the specific characteristics of multi-sided market and platform economics, which the more traditional organisation-focused business model guidelines tend to overlook.

5.2. Managerial implications

Although the platform design framework is still strongly based on literature-derived insights with limited empirical validation, the results provide interesting implications for managers working in platform-based business. To address the real-life problems of the experts designing the DORA platform, the framework was developed to be as simple to apply as possible. Applying the framework for DORA also provided insights from business actors to improve the framework. For instance, while some technical developers were unaccustomed to value-based business modelling, with proper application the platform design framework was able to facilitate incorporating their inputs into the design.

In summary, the framework is a useful design tool in facilitating the process of linking different stakeholder perspectives, finding common understanding on value creation, and accounting for platform-specific issues (e.g. how to ensure network effects) in business modelling.

5.3. Limitations and further research

The methodological approach of design science has some limitations, as it is often used for relatively content-specific solutions, limiting the generalisability of the results. As the development of DORA is based on an open, EU-level development project, the design choices may vary significantly from the platform design choices for privately managed platform ecosystems. Testing and developing the framework further in other contexts would thus increase generalizability.

Furthermore, other research methods would be useful to examine platform design choices and their effect on the eventual success of the platform. For instance, quantitative or simulation studies could examine differences in the platform design elements and competitiveness, while qualitative studies could dig deeper into how different actors perceive the design choices. Studies could also be done to compare and contrast different platform designs.

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes on contributors

Nina Tura, M.Sc. Tech. is a junior researcher in the School of Business and Management at Lappeenranta University of Technology in Finland. Her primary research focus is in the challenges of managing the value of sustainability-oriented innovations. Since 2012, she has been working in multiple research projects with the topics of innovation management, sustainability-oriented innovations, circular economy, platforms and sharing economy. Her main interest areas include also teaching and (adult) pedagogy, and currently she is preparing her master studies of specialist of adult education at the University of Eastern Finland.

Antero Kutvonen, D.Sc. holds a position as Post-Doctoral Researcher in LUT and has been working in a research position there since 2007. He has published in several journals, such as the European Journal of Innovation Management and Int. Journal of Innovation and Learning. His research deals with issues at the intersection of open innovation and strategy as well as innovation management, sustainability, mobility and knowledge management.

Paavo Ritala, D.Sc. (Econ. & Bus. Adm.) is a Professor of strategy and innovation at the School of Business and Management at Lappeenranta University of Technology (LUT). His main research themes include collaborative innovation, knowledge sharing and protection, coopetition (i.e. collaboration between competitors), platforms and ecosystems, as well as sustainable value creation. His research has been published in journals such as Journal of Product Innovation Management, Industrial and Corporate Change, Industrial Marketing Management, British Journal of Management, and Technovation. He is also closely involved with business practice through company-funded research projects, executive and professional education programmes, and in speaker and advisory roles. Prof. Ritala currently serves as an Associate Editor of R&D Management.

Additional information

Funding

This research has received funding from the European Union's Horizon 2020 research and innovation programme as part of the ‘Door to Door Information for Airports and Airlines’ (DORA) project under Grant Agreement number 635885.