How to Build a Platform

If you’re a platform builder, what are key things to keep in mind? Let’s first start with a broad definition of what a platform does: a platform allows third parties (ecosystem members / platform users) to build functionality (such as ‘apps’) and businesses on top of that platform by leveraging valuable services from the platform but without requiring the platform itself to change to support that particular functionality / business. Those platform users can be groups within your company or organization, if the platform is an internal one, or can be separate companies or organizations, if your platform is an external one. Having a well-defined abstraction layer between the platform and the stuff that is built on top of the platform is key to the platform’s leverage, to being able to supply a set of standards and services that can be used by many third parties over and over again to accomplish different end goals.

A platform, in the sense that we are discussing here, should have both technology and business dimensions to it, meaning that a technology platform should have an accompanying business platform that facilitates those third party platform users in building their own businesses on the platform, just as the technology platform allows them to build their functionality on the platform. In both cases, a platform should be designed to enable innovation on the part of platform users. Technically a platform should supply a well-defined set of standards that lay out how the platform is to be used, a rich (and growing) set of services that those users can leverage to build their own functionality, ideally an SDK (Software Developers Kit) to leverage services or possibly to create new ones on their own, and possibly a shared infrastructure (likely in the cloud, today), depending on the nature of the platform. These services should be general purpose so that different platform users can do different things with them.

I think that the test of whether you have created a true platform is if you see platform users building things on your platform that you couldn’t even imagine as you set out to build the platform. As innovative as Apple is (everyone’s favorite platform company example), no doubt they could never imagine the full range of apps that are now available on the iPhone. That is leveraging the collective innovation of your ecosystem. Likewise your platform business model should be ‘general purpose’ enough to support innovative businesses — you don’t want to put yourself in a corner where you have to stop platform users from pursuing what seem like good and innovative ideas just because your commercial model can’t account for that business. Apple itself struggled with in-app purchases early, for example.

Platforms are a powerful concept and there are many good reasons to build platforms. Just make sure you are clear, up-front, about whether you are better off as a platform user or a platform builder. When you are out for leverage, it is sometimes not entirely obvious which way round makes most sense. If you do build a platform, make sure your technical design, your business design, and your organizational design are all set up to make it a success.

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