The double-edged sword of market platforms

December 27, 2010 § Leave a comment

In a recent TechCrunch post, the guest blogger makes a thoughtful point about the resergence of business “platforms” (e.g., Facebook or Twitter), and the risks that companies take when they become overly dependent (the way many former businesses did on the Operating System before computing was pushed to the cloud).  For sure, when you tie your product or business to a market platform like Facebook, you’re capping the upside, and inscribing a dependency that you may one day regret.  But let’s face it — many product ideas aren’t strong enough to exist outside the platform they enhance, and are destined to be product features, not businesses in and of themselves.  In other words, they wouldn’t even exist without the platform.  So when the proprietors of these businesses complain openly about how their “hosts” are holding them back, well, it seems just a little whiny.

The rare exceptions will successfully leap to a 2nd platform (if an appropriate one exists), be acquired by their underlying platform (Facebook has bought 10 companies this year, and more area planned), or transition to an independent business model (as Zynga is attempting to do).  If your business can not only stand on its own two feet, but be nurtured into becoming a platform itself (meaningful and broad market need, scalability, open API and user friendly SDK, partner-focused and efficient software developer program, etc.), well then, now you’ve got something to write home about.

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