From the Crowd

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Your startup probably isn't a platform

August 22, 2011: 9:27 AM ET

Just because "platform" has become the year's tech buzzword, that doesn't mean you built one.

By Lee Hower, contributor

Countless startups pitch themselves as "platforms" these days.  I suppose many folks simply believe "platform" seems sexier than just a "product" or a "service" these days, even if the product is great.

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.

A software platform is truly a foundation on which entire businesses can be built. It encompasses not just a technical infrastructure but also a user experience framework, usually some form of a selling channel, and a defined large-scale developer ecosystem. Facebook is a platform and companies like Zynga have been built upon it. Apple's (AAPL) iOS is a platform. Microsoft (MSFT) has two massive platforms in Windows and Xbox, and has been thrashing about for a decade trying to build one in mobile. Google (GOOG) of course has Android. Salesforce (CRM) is trying to create a platform both through internal efforts on Force.com and acquisitions (e.g., Heroku).

Simply having an API doesn't make your company a platform. Similarly, simply having a piece of software that gets embedded in other products doesn't make your company a platform; that just means your product is usefully extensible or perhaps your a dev tools business.

There are lots of incredible companies that aren't platforms, like Groupon or Dropbox. Even Amazon (AMZN) isn't a platform -- yes they have Amazon Web Services, but it accounts for <3% of their revenue and isn't terribly profitable given the capex & opex currently going into growing it.

So I'm sorry to say, but odds are your startup probably isn't a platform. And that's totally okay. Just be an killer product or an awesome service, and if you can succeed at that (a hard challenge itself) good things will likely happen.

Lee Hower (@leehower) was part of the founding team at LinkedIn, serving as director of corporate development from the company's inception through its early growth phases. He currently is a co-founder and general partner at NextView Ventures, a Boston-based investment firm focused on seed stage Internet-enabled businesses. He blogs at AgileVC.

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