My Platform or Yours?
Earlier this month we opined, while arguing that social media is all about the data, that many companies are beginning to re-think their Facebook Page / Twitter strategies.
New Market Entrepreneurs looking to leverage social media both in their product and as part of their marketing execution, the question actually boils down to this: What platform do you want to be on? Your own or someone else’s?
We sense a debate is kindling that’s beginning to question the wisdom of building on top of Facebook or Twitter or the next big thing, especially when developing product. In recent days we’ve seen some similar opinions expressed. Here’s one from a New Market Entrepreneur with a vision for a new type of platform. Here are some passages that describe what’s wrong with the current world.
This word, platform, is a very important one. Companies like Facebook and Twitter have actively encouraged companies to think of their APIs as “platforms”. They want people to base their businesses on top of them. If you unpack that word, they are saying that you should think of the APIs they provide the same way you think of an operating system like Linux, or a hosting platform like Amazon Web Services, or a programming platform like Ruby on Rails.
Platforms are great because they enable you to get all sorts of benefits from the work done by others. I am convinced that Facebook and Twitter reallyare platforms in that sense of the word, because if you choose to use their APIs you can do amazing things that would be impractical if you attempted to build the entire service yourself from scratch. The concept of platforms is one of the key reasons that Web2.0 actually did meet its promise of widescale global adoption and technical innovation. Long live Web2.0.
However this “platform” word starts to get very troubling when talking about business models. Building on top of a platform is a foundational risk, and if your platform decided one day that it doesn’t like what you are doing, or likes what you are doing so much they want to compete with you, it’s Very Bad. Your platform partner can easily damage your quality of service, or simply shut you down. If that happens, your business is dead. Web2.0 built a lot of really cool, shiny things, but the foundational aspects of them are built on what I am arguing is a flawed premise. I am not simply criticizing, I am saying we can do better.
Then there was this one, from Sarah Lacy, some selections below:
…when Facebook opened up its platform to third party developers and launched a Valley-wide obsession with all things “platform”. It was mostly reflective of the Valley’s polarization between companies who raised hundreds of millions to become massive tech giants and everyone else wanting to flip.
For the giants: They needed armies of developers making their product even more relevant to the world. For the flippers: It gave them a quick and cheap way to get massive distribution, a built-in way to easily charge users (in the case of the Apple store) and skirt the challenge of having people create a log-in and password for your fledgling Web product (in the case of Facebook and Twitter). For both sides, though, the major benefit was distribution.
I’m expecting bitching about platforms to start anytime now…
…I’m not suggesting you can’t build great businesses on top of platforms. But for too long, developers have considered them a Pleasure Island of distribution without strings. Those things on your arms and legs? Those are strings, Pinocchio.
One of our internal incubation projects, DAZZMOBILE, recognized this platform dilemma as we drafted our product blueprint for event-based mobile/social apps targeting corporate events and professional sports teams. For many of the reasons cited above (and others), rather than build on top of Facebook / Twitter API’s, we decided to offer a white-label custom-branded platform of our own. Having our own platform that we can re-skin on behalf of our client-partners will allow us to manage the user experience while also maintaining control of the data and the monetization opportunities. After all, most of the new apps described by Sarah above turn to the big platforms for user acquisition. Our clients don’t have this need. They already own and have access to their audiences. In effect, Dazzmobile turns the proposition inside out. Our platform is built for proprietary social/mobile/gaming. All the action takes place on the platform. Yet, we make it easy for individual users to “bring-in” from or “share out” to their favorite platforms like Facebook and Twitter. We believe this approach offers the best of both worlds. To learn more about our Dazzmobile project, click here.
We share our own experience (as well as the reflections of others) above in an effort to help fellow New Market Entrepreneurs think through the right approach. And please don’t misinterpret what we are saying. We are not suggesting you ditch Facebook or Twitter. For example, we still believe strongly in the opportunity presented by Facebook’s Open Graph (as you will see here and here). We are just offering words of caution that your strategy and execution plan must have elements to endure on your own.