Why The Three P’s Is Winning & Will In The Future
Throughout time, businesses have had to evolve past just selling widgets.
We went from specialists selling a smaller number of SKU’s, to selling huge amounts of SKU’s just to compete. Many then moved to rely on everyday people to sell their products on your platform to compete on search engines and drive enough people to drive another round of investment or keep the lights on.
Many of these changes were necessity, rarely strategic and survival becomes the name of the game, while slowly killing development, product improvements and investment into true growth levers.
In the age of the internet, faster more convenient apps and prime expectations, we have seen the way we browse, broker and buy evolve quickly and many times we did not see the landscape shift and change, why? Because of how discreet and smart these new players are.
In today’s market, we have seen the three P’s step up and win as operating models:
The Partner has always been a core part of business, it has however increased its importance level in the last three years, acquisition costs have increased, retaining customers has become harder, loyalty is at its most delicate and choice is everywhere.
Being the partner and driving the connection is enabling a whole new line of business and reducing costs, alongside offering new products and solving more customer problems.
The Platform is not new but the unbundling and consolidation of companies is happening at records rates. The platforms are reducing barriers to entry, reducing prices for their customers and enabling companies to build other avenues to build revenue, develop their brand, and have a multiple-layered approach to selling products and solutions.
Shopify’s record year growth comes from offering a solution that drove quick and easy DTC offerings alongside making it easy to manage marketing, sales and distribution.
The Piping is relatively new due to technological advances, companies like Twilio and Stripe have taken complex solutions that would have costs millions and reduced friction and cost to create much better customer experiences, Twilio leads the way in making communication easier, stripe leads the way in allowing payments cross-border and speeds up payments to their partners.
Which are you right now?
The Partner, The Platform or The Piping?
There will be unique companies that will be able to operate within the three P’s, Amazon, Google and Apple are operating across the three but not always as deeply and are often treated as frenemies.
Clarity Is Key
You have to clarify what your strategy is, live by this internally and externally. You have to clarify the internal difference between mission, vision, strategy and tactics are and where you are now and where you are going with a timeline.
Many businesses are operating being unclear of what they are to their customers, this is the first failure. Customers have to understand you, whether you are b2b or b2c or b2b2c, if you cannot explain what you do in one tiny image or one short sentence, you will fail.
The second is your actual overarching business leading strategy is unclear to the employees and operating in between the partner, platform and the piping often creates confusion, friction and impacts hiring of the next generation of staff and leaders within your business.
There are many businesses flirting to try and become two of three but are not in deep enough and killing their growth by not thinking mid to long term and only answering today and some of tomorrow’s problems.
Amazon is arguably the leader within two of the three but has taken years to build trust. The Platform with their Marketplace and The Piping with AWS and this transition has taken years of investment but ruthless prioritisation and knowing to stick to their ten years operating plan.
Short-sighted businesses die slowly, particularly market leaders that just don’t understand Product shifts and Market shifts.
This is often down to businesses over-reliance on OKR’s and short term performance-based metrics.
The third and often fatal blow is not being able to understand where you are operating currently is going to be swallowed up by a disruptive start-up operating as a partner, a new platform or as the piping.
You will experience larger companies come into your space and eat into your market share and lastly, you will slowly operate in a blinkered way, ignoring how to perform as one or a smart blend of one of the three p’s.
Do Something About Your Position & Select Your Power P
In your next QBR or LRP, it is important you question who you are, where you are going and which P is going to be your play for the next three years. If you are between P’s really push to understand how you will answer more customer problems and make a long term bet on.
Important Strategy Resources