The Platform Story: Part 1

Orientation, and the problem statement.

To get more of the below directly to your fancy internet mailbox, please subscribe on Substack. This is part 1 of an n-part series about platform and product development, most of which will be spent yelling at my own mistakes.

Right then, off we go!

The problem statement

If you’re looking to launch a platform, you’re probably somewhere along a belief-fear spectrum that goes a little bit like this:

• “I believe that adding platform capabilities will create a competitive moat that will increase my ability to acquire and retain customers. Also…”
• “…I fear that if I don’t explore platform, I will cede competitive ground, and hurt my ability to acquire and retain customers.”

And you’re probably right! You might also have a high standing demand from customers or (potential) partners, an executive mandate to explore new revenue opportunities, or some combination of all the above.

The fact is, your belief, fear, and curiosity are all reasonable and sane and probably correct.

You should listen to them.

And if you’re already building toward a platform launch, I’d wager good money that you’re doing it wrong.

And you should get used to that feeling. Embrace it. Fail fast. Learning is more important than getting everything right, and if you learn as you build, you will succeed — or at least give yourself a half-decent shot at it.

Problem summary

Your instincts are probably right, your choices are probably wrong, it’s all normal, and the best you can do is gather loads of context, apply it to your unique situation, and see what happens.

So that’s where we’ll start: gathering context.

The big “why”

Ok, but aside from the fear, why launch a platform at all?

To start, let’s assume you have some software, and it’s probably SaaS, because of course it is. ✨

And you’ve probably looked at your competitive set, or the companies you’d like to model, or just generally the most successful companies in the world, and you’ve had thoughts like:

• Slack had its 10th birthday, surpassed 10 million DAUs, and filed for IPO this year.
• Wow, Salesforce has made over $17B in acquisitions to grow its platform _this year so far_ (most of which is Tableau, but still).
• Oh, hey, most of Apple’s $80B+ in quarterly revenue is selling hardware running proprietary platforms, one of which (iOS) paid out over $30B to third party developers in 2018.

Even standouts aside, I imagine you’d be hard pressed to find a successful software company that doesn’t have some way of talking to the world outside its own doors.

Words of caution

Having north star companies is GREAT. You could even say, right now, “I’m going to try and be like Slack,” read three or four articles about Slack, follow Slack’s playbook, and launch a pretty OK platform.

But here’s what you’ll be missing:

• Every company and vertical are different.
• There’s a very high correlation between companies with successful platforms, and companies with straight up great products. For each company you examine, look hard at the product and platform separately, and together.
• Technology moves really, really fast. Even if you have a great north star, and you’re confident about your roadmap, take a second, third, and fourth look at your tech needs before making big choices. Don’t assume what worked last year for someone else will work for you now.
• Every choice is a bet. When you’re chasing your north star, you’re most likely just seeing the bets that worked. You’re probably going to make some bad bets. They probably did, too. We certainly have. Chin up. It’s ok.
• Keep your eyes on the road. You won’t be Salesforce tomorrow; and they weren’t you yesterday. While it’s great to try and emulate the companies that impress you, you should focus on the journey as much as your desired destination. Otherwise, you’ll constantly be disappointed that you’re not there yet.

In all, remember— you’re forging your own path here. Don’t look for a playbook to follow. Look for signals, think hard, and build a roadmap that fits your needs, your tech, your company, and your vertical.

So what’s a platform?

This is actually really important, but we can keep it brief.

There’s a fantastic Stratechery article from 2018 that cites a 2015 interview, in which notable VC Chamath Palihapitiya recalls a conversation he had with Bill Gates. In the conversation, they’re discussing what a platform is, and isn’t, and in Palihapitiya’s recollection, Gates remarks:

A platform is when the economic value of everybody that uses it, exceeds the value of the company that creates it. Then it’s a platform.

Agree or disagree, this story has stuck with me as a strategic beacon. APIs and services are what they are. Making your internal API public and letting people use it is cool. Partners pushing content into your system is great. But if you’re truly focused on driving success on other peoples’ terms, and growing an ecosystem that can scale wildly beyond your own company’s success — you’re building a platform.

Digging into a couple examples

Slack is a platform-driven company. Yes, the software is great on its own. And that helps everything, including driving demand for platform development. After all, if people weren’t already screwing off in Slack all day, there wouldn’t be much point in helping them run polls, conduct remote stand-ups, or import their Google Docs.

But as a product, it’s very much become platform-first:

• Over 470 open source projects in 28 different languages.
• Public ideaboard and developer roadmap.
• The Slack Fund, which to date has helped launch at least 40 other businesses.

Now consider the benefit to the end user: endless customization, deep integrations into most of your other software, and so, so many reaction gifs. By releasing thoughtful, extensible, and highly discoverable tools, Slack has created a perfect storm: external developers win, mutual customers win, and Slack wins.

If there is a single playbook to follow, at least from a pure technology perspective, it’s probably theirs.

Salesforce is another great example. For anyone interested in platform roadmaps or philosophy, I highly recommend taking the time to read through this whole presentation, in which Ron Pragides, VP Eng at Carta, walks through Salesforce’s rise as a “rapid development platform.”

For those of you who aren’t into slides, I’ll summarize here:

• In 2000, Salesforce began their journey by introducing custom fields. From there:
• 2003: Custom objects
• 2004: Custom workflows
• 2005: Custom apps
• 2006: AppExchange and Apex
• 2007: VisualForce
• 2008: Force.com
• By 2019: Over 1,000 platform engineers, 57 acquisitions (including 7 exits), and over $10B in annual revenue

What you’re seeing here is a scaling investment that begins with a single, customer-facing feature, and grows into an ecosystem that includes its own programming language and conference. This isn’t exactly a blazing hot take, but: not bad, Salesforce!

More examples!

Going back to our friend Mr. Palihapitiya, here’s Bill Gates’s answer on the notion that Facebook Platform is a platform:

That’s a crock of shit.

• Twitter? Arguably a platform, especially in its middle years when 75% of its traffic was via API.
• Zapier? Platform.
• Desktop operating systems? All platforms.
• iOS? Probably a platform, but there’s so much of a focus on the provider’s cut that it feels a little grey to me. Some of things are grey, and none of them are hills worth dying on.

Ok! We’re oriented as we’re going to get. Let’s boil it down and move on:

A platform is a toolkit that enables not-your-company to deliver unique value that benefits the end-user, and enables not-your-company to scale on its own terms.

Well, we might need to workshop that a bit, but it’s a start.

Coming soon:

• Part 2: Background, goals, and expectations.
• Part 3: Risk, measurement, and focus.
• Part 4: Choices, mistakes, and lessons.
• Part 5: More choices, more lessons.
• Part 6: The partner pivot.
• Part 7: Keep your head in the game.
• Part 8: TBD…