2: Digital Business Models

The concept of ecosystems has been integral to business strategy, evolving from general collaboration frameworks to innovation ecosystems driving technological progress. Digital ecosystems, initially rooted in engineering, now encompass manage-rial and strategic dimensions, are explored. Platforms, exemplified by companies like Amazon and Uber, epitomise this evolution, transitioning from linear value creation models to dynamic, multi-sided ecosystems leveraging external resources. These platforms, categorised as innovation or transaction platforms, harness network effects for exponential value creation. Effective platform management entails defining market sides, crafting unique value propositions, stimulating network effects, and solving the chicken-or-egg problem through strategic growth and engagement techniques. Governance mechanisms are crucial, encompassing value-sharing, leadership roles, and participation rules to sustain ecosystem growth. The chapter ponders the shift towards digital ecosystems and underscores the need for companies to adopt collaborative, flexible approaches, ensuring robust and sustainable business models in an increasingly interconnected and complex market environment.