Innovating Business Models and Ecosystem Design

Guest Kevin Boudreau

Bio • Professor of Entrepreneurship and Innovation at Northeastern University • Studies digital practices and platform-based organizational forms that drive the economics and management of knowledge, innovation, discovery, and science • Former chief economist for the NASA Tournament Labs

Summary This episode features Kevin Boudreau, who discusses his evolving perspective on platforms, beginning with a systems design engineering perspective, and then moving to an economic and strategic perspective. Kevin initially saw platforms as having a foundation of technological capabilities upon which one could build and later came to view platforms as intermediaries and nodes within a network of relationships. His current view of platforms is that they are digital spaces where an actor controls core assets and capabilities and governs a broader ecosystem. He emphasizes the need to move beyond old views of platforms as simply intermediaries with network effects. Kevin argues that platforms are evolving into practices that will transform all firms by enabling scalability, modularity, and the use of data.

We discuss the impact of AI and data on platforms, noting that they are becoming increasingly data-rich environments where humans and machines work together. Kevin believes that AI, particularly large language models (LLMs), will change the way platforms operate and potentially substitute some functions previously performed by humans. He also points out the issue of how unique innovation can be protected when LLMs are used to create new products and that data often flows to the LLM itself. Kevin also notes that established companies can leverage platform-based mechanisms to make better use of their data.

We also discuss how Kevin teaches about platforms, with an emphasis on platform design and data science. He stresses that platforms are designed and built and that their externalities are not simply given. He includes the design of data systems and AI into the platform business model in his teaching. He emphasizes that a platform's value proposition is translated to every side of the platform and that each side has a choice to join based on the value they perceive. Kevin also highlights the importance of platform culture as a shared understanding and a set of norms that helps the platform function. He sees the current period as a time of change analogous to the emergence of the modern firm and notes that business schools need to have a more active role in helping companies adapt. He also believes that universities can help by prototyping new capabilities and running experiments with industry and government partners.

Publications & Projects Mentioned • Boudreau, K. J., & Hagiu, A. (2013). Platform Rules: Multi-Sided Platforms as Regulators. In A. Gawer (Ed.), Platforms, Markets and Innovation. Edward Elgar Publishing.

Links Kevin's Linkedin profile Email: kevin@northeastern.edu