Beyond the Buzzword: What Makes a True Platform?
Platforms are made to combine two forces: exponentially more for the logarithmically less into a self-reinforcing and self-sustaining power similar to a rising tornado
In business, platforms are designed to harness two powerful forces: exponentially more for logarithmically less. At their best, platforms operate in a self-reinforcing and self-sustaining mode, creating value far beyond their initial inputs. However, not all so-called platforms achieve this ideal. To understand why, it’s important to dissect what truly constitutes a platform and to address the common misconceptions that dilute the term.
The essence of a platform lies in its ability to enable scalability, efficiency, and innovation by:
Facilitating multi-sided interactions: Bringing together diverse stakeholders (e.g., users, developers, businesses) to create a network effect.
Offering extensibility: Allowing third-party developers to build on top of the platform, thereby expanding its value.
Enabling composability: Providing modular components that can be configured and recombined for various use cases.
Fostering openness: Encouraging integration, collaboration, and innovation from external contributors
Cultivating the ecosystem: People, tools, assets, courses, tutorials, and any other artifact that adds value to the community
Governance & incentives: The most nuanced and strategic aspect of platforms.
Yet, simply offering these features doesn’t guarantee a platform’s success in achieving “exponentially more for logarithmically less.” It takes a robust and honest approach to the real business objectives of platforms. Many fall short due to misunderstandings or misuse of the concept. The most common fallacies are;
Confusing a Product Suite for a Platform
Mistaking Marketplace Features for a Platform
Assuming Any API Makes Something a Platform
Calling Infrastructure a Platform
Using "Platform" as a Marketing Term
© Saip Eren Yilmaz, 2023
