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SILICON100 2017

“We help enterprises executives’ scope out platform opportunities; build the products to capture it, and grow the opportunity to it maximum potential”: Applico

thesiliconreview-alex-moazed-ceo-applico-17

“Applico is trailblazing a new type of client services firm, the Platform Innovation ™ Company.”

Applico is the world’s first Platform Innovation ®Company. We provide advisory and implementation services to build, execute, and scale platform businesses alongside large, traditional enterprises. Our clients include Fortune 100 firms as well as multibillion-dollar private companies.

Founded in 2009 by Alex Moazed, It has focused solely focused on Platform Innovation ® for the past 3 years creating hundreds of millions of dollars in enterprise platform value.

What is platform design?

Platform design is a multi-week discovery engagement in which Applico partners with client teams to identify the platform opportunity available and best suited to the client’s needs. Then, the platform is fleshed out using frameworks appropriate to the platform type and we address the specifics, such as go-to-market strategies, rules and standards, matchmaking protocols, to just to name a few.

We specialize in helping established enterprise companies avoid disruption from scrappy startups. The first step is to identify the opportunity and ideal platform type for the client. How should competitors be handled – acquired or crushed? Should the platform be a development platform or a product marketplace?

Next, we work through the four Cs of the platform: create, connect, consume, and compensate. Where does the value emerge and how does it get passed between the consumer and producer? Finally, we identify the right tools and features to make the platform work at an optimal level and build an incremental plan for building up the functionalities.

A number of industries are ripe for platform disruption, whether by a savvy startup or an established business such as Amazon or Facebook. Once a platform takes over an industry, it becomes a winner-take-all scenario, wherein one, maybe two, companies dominate the market and control the flow of value. Beating a platform monopoly is nearly impossible once it’s achieved critical mass, so the advantage almost always goes to the first mover.

A real time application

Multi-Billion Dollar B2B Distributor

Client Challenge

At present, the business is focused on maintaining its gross margins in a highly competitive environment. Over the last few years, the client’s industry has been experiencing accelerating consolidation, with several of its largest national competitors merging with and acquiring each other.

Additionally, the active threat of a large platform company entering the industry had the client unsure of the future landscape. The client’s fiercest competitors in each region has historically been local mom-and-pop shops, but this was changing.

The client’s executive team needed guidance on how to approach its digital transformation in the presence of a marketplace threat from a modern monopoly.

Having worked with us on software development projects previously, the client engaged Applico for its platform business model expertise to help it navigate its digital transformation and the changing industry landscape.

Applico’s Solution

In order to execute on platform innovation, the client needed alignment on the threat represented by a modern monopoly entering their industry.

The client’s executive team lacked a full understanding of how this new platform entrant would impact the client’s business. To demonstrate the potential threat, we combined the market research and business model design done throughout the engagement to build a custom financial model for the client mapping out the path to profitability for a new platform business in the industry over the next several years.

In addition, we built a model that demonstrated the likely scenarios for what the client’s business would look like over the next five to seven years if it opted to ignore the platform component of market disruption, and chose to pursue traditional, linear digital initiatives as its defensive strategy instead.

Since a platform competitor clearly threatened the client’s core business model, the client’s executive team agreed to pursue an offensive option rather than trying to consolidate its position via traditional acquisitions.

A platform business was a radical departure from the client’s existing business model, so Applico worked with the client to help it decide the best route to pursue platform innovation, via either building a new platform, acquiring a platform startup, or investing in an existing platform.

To inform this decision build it vs buy it decision, we built the business case for how to scale a platform in the client’s industry. This business case detailed what the ideal platform business would look like in client’s industry. It also provided the roadmap either for building a platform business or for integrating and evolving an acquired one.

Outcome

According to the executive who was the client’s lead for the engagement, “Applico’s inspired thought leadership has helped us answer a fundamental question we have struggled with for years. Namely, how do we develop a strategic response to impending platform attacks to our industry?”

Applico’s Platform Design process enabled the client to get buy-in on pursuing a platform business opportunity from the full chief executive team. In addition, the client’s chief executive chose to also escalate the findings of the engagement to the holding company to broaden the scope of the conversation beyond our client’s own business unit.

Meet the luminary: Alex Moazed, Founder and CEO

Alex founded Applico in 2009 when he was 20 years old and funded the company with his own credit cards. Within the first three years, Alex led the company to become one of the largest app developers in the industry.

Subsequently, Alex evolved Applico into the world’s first Platform Innovation Company, trailblazing a new type of consulting and engineering firm. In his role as CEO, Alex is laying the foundation for platforms to be the predominant business model of the 21st century.

He speaks extensively about mobile technology, the Connected Revolution™ and Platform Innovation™. Alex is a founding board member of the Application Developers Alliance and a graduate of Babson College, Choate Rosemary Hall and Greenwich Country Day School.

“Applico has worked with large enterprises for over 8 years, launching over 350 successful apps with clients like Disney, DirecTV, Google and startups backed by KKR, Andreessen Horowitz and others.”

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