Platform: core to the business, not a feature
Periodically, when I’m in the middle of a blog post, I will poke through my various interfaces to the world of social media to see if anything interesting (or perhaps sufficiently distracting) is happening. Just minutes ago, a twitter post caught my attention. In fact, it was sufficiently compelling that I’ve taken the post I was writing previously, saved as a draft, and launched this missive instead. The tweet was as follows:
As a Platform believer (and some colleagues would say “platform neurotic”), I was intrigued. Richard captures the majority of what frustrates me about the perception of platforms in the industry today. Earlier this week, I blogged about the incorrect assumption that innovation is a buzz phrase. In the case of platforms, the issue is tied more to the recognition of the importance of the platform…but frequently poor implementation.
Before I go any further, go here to read the entirety of Why Platforms Are Letting Us Down.
Back already? Beautiful.
Suffice it to say that I agree, in large part, with the post. But there are a few items of particular import that are worth highlighting.
Platforms that don’t have monetization wired in are only good for marketing. This is why the platforms of the future need to think about not just short-term marketing and buzz, but long-term sustainability and monetization.
Platforms must, must be about value creation. Decreasing costs and increasing revenue for the constituent elements of any platform are a must. Too frequently, the focus of the “platform” is what the perception of an API will have in the market. The focus is on the impact on the company…not the impact on the ecosystem. True platform plays monetize interaction via the platform, but the majority of value created is owned by the ecosystem…not the company functioning as the catalyst for said interaction.
The platforms of the future need to think about not just short-term marketing and buzz, but long-term sustainability and monetization.
I used the term “catalyst.” This is inspired, in large part, by David Evans work on The Catalyst Code. With that said, there is something important about the term catalyst that is oft overlooked. To quote a definition: “Chemistry. A substance, usually used in small amounts relative to the reactants, that modifies and increases the rate of a reaction without being consumed in the process.” Those last 6 words are of extreme import.
If you call yourself a platform, and have no plan for sustainability (aka, not being consumed), you are not a platform. Simple. Blunt. Unpleasant. True.
A platform is not, and cannot, be viewed as a feature. It is a business model, perhaps more aptly, a business strategy. It is not something to be undertaken lightly…
What’s your perspective? Agree? Disagree? Anything to add? Critiques? The comment form is below. . .
October 23, 2008