The Downside of Depending on a Platform

product platform

Image Credit: bonnie-brown

In a post for his blog, Chris Dixon outlines the risks you take on when you depend on a platform for your product’s distribution.

“When your product extends a platform’s functionality, one of the main risks you face is that the platform could embed your product’s key features within the platform,” he writes.

Oversaturation

This happens, he says, when the risk that supply of products on the platform significantly outpaces demand.

(See Product Strategy: Should you be building a platform?)

Barriers to discovery

Dixon says the risk that the discovery methods on the platform aren’t meritocratic.

He cites the example of Apple, which has other app discovery mechanisms like its Featured Apps and Genius features.

Currently, social networks like Twitter and Facebook seem to have the most meritocratic discovery mechanisms, which is one reason so many startups target them for distribution.

(See On Platform Ecosystems- A Coming Explosion of the Facebook Ecosystem?)

Throttling

Dixon says there is a real risk that the platform will throttle distribution or monetization (for apps that rely on paid advertising, throttled monetization also means throttled distribution).

He reccomends, if you are launching a new website or app, you should have a distribution strategy beyond just “people will love it and tell their friends about it”.

“It is worth noting that some of the most successful startups grew by making bets on emerging platforms that were not yet saturated and where barriers to discovery were low,” he writes. “Betting on new platforms means you’ll likely fail if the platform fails, but also dramatically lowers the distribution risks described above.”

For more on platform distribution, read Dixon’s full post here.

Full StoryFrom Chris Dixon

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