Platform business models have the potential to revolutionise how charities operate and deliver impact on a scale they have never experienced.
For any charity serious about digital transformation, getting a new website and running some Facebook ads isn’t going to cut it. Developing a platform business model based on a solid understanding of internet-era principles will be essential for success in the twenty-first century.
Charities still utilise industrial-mindset pipeline business models. These conceptual models about how the charity creates value involve a linear process of taking in inputs, processing them, and then outputting them for consumption. This approach is called a pipeline model because it involves one-way flow and input is not affected by any previous output.
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Pipeline business models grow through replication or by the pipe becoming bigger so that more value can flow through it (which explains the difference between small charities and large charities, the qualities and characteristics of the value don’t change just the amount of value that flows through the pipe).
Pipeline business models are ok, but it's the twentieth century, the internet changed everything. Charities have to move with the times.
A platform business model that utilises knowledge might look something like this:
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Data, information and knowledge (see below for more explanation on the difference between the three) are brought into the platform. It could be generally available data or specialist knowledge that comes from a person with years of experience. Recruitment is one way to bring knowledge into an organisation. Starting the model requires the charity bringing knowledge into the organisation.
Data is turned into information, information is turned into knowledge and knowledge is codified into goods (for want of a better word, explanations below).
Distribution includes all the mechanisms for taking knowledge from within the organisation to the world outside. It includes people answering phones, websites, people having discussions with other people, etc.
Knowledge is distributed to people who don’t work for the organisation. The more useful the knowledge the more people will want it, which is why the feedback loop through
Knowledge
The faster the knowledge goes round the virtuous circle the faster the flywheel spins.