Question

When a platform provides tools for users to build their own products or services rather than just connecting buyers and sellers, how is that platform type categorized?

Accepted Answer

A platform that provides tools for users to build their own products or services is categorized as a development platform or an innovation platform. Unlike transaction platforms, which primarily facilitate the exchange of goods and services between buyers and sellers, a development platform acts as a foundation. It provides a set of technical components, such as application programming interfaces, software development kits, or infrastructure tools, which outside developers use to create their own unique applications. These external applications add value to the core platform and create an ecosystem that benefits both the platform owner and the users. This model is often referred to as a platform-as-a-service or a multi-sided market that relies on third-party innovation. A primary example is the Apple iOS App Store, where Apple provides the operating system and development tools, and third-party developers build the actual applications that users interact with on their devices.

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When a platform provides tools for users to build their own products or services rather than just connecting buyers and sellers, how is that platform type categorized?