Lee Hower - a VC at NextView Ventures - has a good post entitled “Odds Are Your Startup Probably Isn’t A Platform.” It was even reblogged by CNN Money. In it, he argues that many startups are throwing around the term platform when they really shouldn’t be.
Countless startups pitch themselves as “platforms” these days, in part because it’s become a buzzword in the last 18 months or so…
But the reality is that most software-based startups aren’t really platforms. At least for me, pitching a business as a platform when it really isn’t tends to degrade what might be a really interesting vision and story in and of itself.
While I definitely agree with Lee’s point about exuberant founders throwing around buzzwords, I’d venture that Twitter - notably missing from his examples - didn’t know how it would be a platform when it started, only that it could be a platform. They then kept those aspirations in mind and executed extremely well.
For that matter, only a few of the platforms Lee lists as examples started out as a platform from day one. Google? Nope. Facebook? Noooope. (Trust me, I was on Facebook in its 2nd month in existence… it certainly wasn’t a platform then, though it was great for figuring out who the hot girl was in your anthropology class).
Traditionally, multi-sided platforms are structured by building one side as a product/service, creating value for a given set of customers, then opening that up to another, distinctly different group of customers who may create their own value.
In other words, one step at a time… baby steps.
In his defense, Lee isn’t saying “if you’re not a platform, you suck, don’t pitch me” he’s just saying, don’t try to be something you’re not. But hell… we’re all trying to sprint to be real companies and let’s face it, most of us aren’t even walking… yet.