Twitter’s Fate Depends On Elon Musk’s Understanding Of Platforms; Healthcare Can Learn From That

Little has generated as much media attention in the past week as Elon Musk’s $44B prospective takeover of Twitter. “My strong intuitive sense is that having a public platform that is maximally trusted and broadly inclusive is extremely important to the future of civilization,” Musk noted at a recent TED conference. By most accounts, ‘inclusive’ here means the protection of speech; it is not certain what he means by ‘trusted’, although addressing that component will be critical to the success of this new endeavor, as Twitter is a platform whose source of value is not the product itself, but the network of 396 million people (of whom 77 million are in the US).

In that respect, Twitter represents a very different type of business than the other three companies Musk runs in Tesla, SpaceX, and The Boring Company. These other companies are all ‘pipeline’ companies, which create value by controlling aspects of a value chain; Tesla, for instance, may rely on suppliers for some components, but controls the design of the end product and how those components are put together.

Twitter manufactures nothing, and if anything, the products themselves are tweets produced and consumed by the people using the platform.

Musk has proven brilliant at engineering new solutions to some of the world’s toughest challenges. And he was an early executive at PayPal, a payment platform. But that was 20 years ago.

Can Musk successfully run a can he run a multi-billion dollar platform company, where he won’t be able to flip a switch to flip a switch to change human behavior? And what can the healthcare industry and digital health platform companies learn from a pipeline expert taking over a platform business, especially in an industry that is vastly different from those in which he’s operated to date?

Below are some of the critical points that healthcare platform companies, investors and partners must keep in mind as they develop, launch and grow their businesses, based on Musk’s proposed acquisition of Twitter:

Pipelines versus platforms:

  • Twitter: Elon Musk is a skilled operator of pipeline businesses, with Tesla and SpaceX his two biggest endeavors. Per the above, pipeline businesses take ownership of a portion of the organization’s value chain, create value through differentiation of a specific set of activities, and then sell the fruits of their labor (eg, Tesla owning the end-to-end production and sales channels). As opposed to pipeline businesses, platforms facilitate exchange between different sides of a network; typically, one side is a producer or supplier (of information , services, or goods), and one side is a consumer, with monetization based on the strength and breadth of the network.
  • Healthcare: There are very few (but increasing) digital health platform success stories: Surescripts, CoverMyMeds, GoodRx and Doximity being some of the pack leaders. Platform businesses are notoriously difficult to scale in any industry, and healthcare is more complex than most: it’s highly regulated , has a complex payment system, interacts with people’s most sensitive data and serves them during the most sensitive times of their lives, and healthcare itself is not a normal economic good.
  • Lesson: platforms are different, and require very different expertise to run, grow and scale than most experienced healthcare executives have. Companies seeking to build platforms should seek to understand the differences between pipeline and platform businesses. There is a burgeoning field of literature on the business of platforms; unfortunately, much of it translates only loosely to healthcare, so founders, investors and executives should be mindful and realistic about what it will take to achieve the flywheel effect of platforms in healthcare.

Power of platforms:

  • Twitter: Twitter is just one of many platforms that’s changed the way society interacts; Musk calls it the “public square.” Platforms are usually driven by network effects: the idea that the platform gains more value as the number of users increases. Paying attention to not just the platform capabilities, but how those capabilities manifest in user transactions with each other, is critical. For platform networks, it is the presence of other users that will most likely attract them and keep them there (or repel them), so developing a close eye on user interactions themselves is critical.
  • Healthcare: Opportunities for network-effects driven platforms in healthcare abound. Think about the ability to connect people searching for healthcare services with providers (for example, Buoy Health). Or a network that connects primary care physicians with specialists able to provide timely consults virtually (such as as RubiconMD). Or a technology platform that connects digital health companies to thousands of health systems, reducing the need for an expensive one-to-one integration (such as Redox). There are numerous opportunities for platforms to match people with services they need , to reduce information asymmetry, and to solve for information silos. There is perhaps no other industry outside of healthcare who could benefit from these capabilities more.
  • Lesson: Investment in digital health has been rising steadily for years, reaching $29 billion in 2021. Rising even faster? Investment in digital health platforms, and for good reason.

The importance of trust and governance:

  • Twitter: Musk bought Twitter to reduce “content moderation.” Twitter (and Facebook) both implemented content moderation in an attempt to reduce the spread of misinformation. Questions now at hand include how users should be verified, and what type of behavior and/or content should be allowed on the platform in order, as Musk notes, to “build trust” in the system. While Musk may want to reduce content moderation (or perhaps change how content is moderated), such action is risky, as it may erode user and public trust in the safety of the platform: if users don’t feel safe, they may drop off entirely. Of note, the recent mass account deactivations after the Musk deal was finalized, says Twitter, were just “organic fluctuations,” and not from any bot-purging. In reality, this may be a warning-sign about Twitter users’ perception of how the platform will be governed going forward.
  • Healthcare: Trust in healthcare is sacrosanct: the doctor-patient relationship is paramount, and everything must flow from that. While every health technology company must implement stringent privacy and security policies as part of their core operations, platform operators in healthcare must do with with the realization that every user relies on the platform to vouch for every other user.
  • Lesson: Create rules of the road so users have confidence in the integrity of the network, and provide the necessary oversight to assure users their best interests are also your best interest. Create mechanisms for feedback loops – such as network advisory boards – to ensure that concerns are raised and heard, and further policies be established as necessary.

What quality means in a platform context

  • Twitter: Following and unfollowing, muting accounts and keywords, and curating how a user’s feed is displayed are mechanisms that allow users to manage their own experience on Twitter. Some have argued for an ‘edit’ function once tweets are posted (which raises its own question, such as: what if I retweet something that becomes edited and no longer reflects what I liked about the tweet?). A recent article catalogs user-generated ideas for functionality to provide users the ability to improve their own experience of the platform.
  • Healthcare: Investing early to figure out the core use case is critical. Interoperability as a whole has largely failed because of poor focus on quality of user experience, and what represents the core use case for each constituent (hint: everybody is looking for different things at different times, which makes it difficult). Users across a wide-array of electronic medical records (EMRs) and interoperability networks are quite familiar with the complexities and lack of quality data that crosses these platforms daily. Applications with a very narrow focus and use case , like e-prescribing, are exceptions to the failures the broader and less-focused networks have seen to date.
  • Lesson: Start with a narrow focus and be use-case specific. Figure out what makes the difference between a successful interaction and a bad one for different users, and keep refining until there success can be repeated and scaled. Be mindful that, as more users come onboard and new use cases are considered, each user’s needs and preferences may evolve.

Monetization options:

  • Twitter: The social platform has had trouble monetizing its network of users, but has primarily driven revenue through traditional advertising on its users’ feeds. It has not been able to match its social media competitors’ ability to monetize their networks, however, and has largely been seen as struggling business in the social media world in spite of its outsized impact on public conversations. Given Musk’s $44 billion price tag and Twitter’s 2021 revenue of $5 billion, it’s fair to assume that a key area of ​​focus will be the company’s ability to monetize (Musk’s protestations notwithstanding).
  • Healthcare: Different companies have developed different strategies, but monetization typically occurs on one side of the network, with potential subsidization of the other side of the network. CoverMyMeds, a multi-sided platform that connects doctors, pharmacies and pharmacy benefit managers to improve the prior authorization process, figured out that a novel path to monetization: it charged nobody using the network, but sold data and analytics to pharma brands seeking to advantage their own products in the market.
  • Lesson: Monetization in platforms is an entirely different animal than pipeline businesses. It’s important to assess each side’s willingness to pay; understanding underlying economics of each side (and whether outside parties are relevant) can also be helpful.

While healthcare and social media are extremely different industries, the concepts of platform strategy development can apply in both contexts. For Twitter’s sake, let’s hope that Musk knows as much about platform businesses and people as he does about building cars and sending his new Twitter users to Mars.

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