Your Startup is NOT a Platform (yet)
Over the last year, I’ve looked at >150 deals (for some VC’s that’s tiny, for other’s that’s a lot). In that time a number of phrases have risen to the top of the list that makes my eyes roll or create a queasy wave of nausea that overtakes over me. Near the top of the list is: “we are building a platform to do <blah>”.
When you say platform – most often what you’re trying to communicate is that you’re building something REALLY BIG! Something that is likely more than a regular MVP. That’s totally cool and I’m glad you’re building something big. However, what investor think is when you say that is: “you don’t have any customers yet and don’t know exactly what you’re building!” Here’s why.
First, let’s understand what a PLATFORM is as you talk about a company. There’s a great older post, from Forbe’s contributor Adrian Bridgwater that outlines the <historic> difference between a platform and a product. He reaches back into tech history starting with platforms like .Net or JAVA. These are technology platforms that you build products on top off. As he rightly points out, Facebook is both an app and a platform. It’s something you install as an app or use on the web as a product. it’s also a platform that developers build upon.
A Platform can also be a software environment where you can 1) develop 2)run and 3) manage applications or products. Modern platforms include cloud platforms like AWS, Google Cloud and Azure. Application Clouds include Salesforce, and Heroku (owned by Salesforce) are platforms as examples. Platform as a Service (PaaS) represents a category of companies that host these services without the cost of managing the infrastructure.
A Platform is generally in contrast to a PRODUCT, the app, website or software that your customer will use.
Separating your ASPIRATION from REALTY. Remember at launch you are trying to prove you can survive long enough to get to scale. You may become a platform over time, but you’re most likely to start as a product.
Tell us why it’s going to be really big – but not a platform yet!