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  • Stanislaw Banaszak

The Accidental Platform

Creating a platform is the embodiment of the chicken and egg problem. If there are no consumers – producers have no one to sell to. If there are no producers, consumers have nothing to buy.

Starting a platform is not always intuitive and always hard, so most (especially technology-oriented) entrepreneurs opt for building a point solution – not a platform. They follow common wisdom and focus on building a specific solution to a specific customer problem. If they use the term platform, they mean platform in the technical sense.

The upside of this approach is that it is investor-friendly and the path to initial revenue is clear – create a solution people want and will pay for. The underlying hope is that the solution’s market will generate enough revenue to make an “interesting” company. The problem is that in many cases, after initial success in the market, the company needs to expand the scope of its solution to become either a suite of solutions or a platform.

This is the stage when many initially successful startups (wunderkinder) fail. The original solution was not designed as a platform (both from business and technology perspectives) and a lot of painful change and new investment is needed to enable the metamorphosis from solution to the platform.

Building a platform also requires a very different mindset from solution marketing and selling – making it feel like starting from scratch. So instead many startups opt for expanding into a solution suite, not a platform. It looks promising but tends to be a dead end. If they are lucky they are acquired by a larger company looking to expand, if not they become walking dead – too much revenue to quit, too little to really expand.

But there is another option…

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