So you want to build a platform …

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Becoming a platform seems to be the holy grail of developers these days. Despite the challenges of a two-sided market, which virtually doubles your customer acquisition costs and development complexity, there are so many success stories out there, such as Apple’s App Store, that developers see creating a platform as the path to world domination! Mark Zuckerberg realized this early on, opening up his social network to third party developers, and supporting them with tools and tech support.

So when I came across the article, The 7 Key Principles of Platform Design, sub-titled To design Strategies that mobilize, in the XXIst Century, I read it with interest and decided it merited a blog post.

Platform Design Principle #1 — Recognize the potential that grows at the Edge

I was introduced to this principle years ago by computer scientist David Reed. This is the number one principle for a good reason – it’s the most important:

Recognizing that small entities (individuals, teams, small organizations) have today an increasing potential to impact their own life, create powerful products and services, transform systems, is key to understand the platform model.

Platform Design Principle #2 — Design For Emergence

This is where a lot of founders stumble. They think they can manufacture an ecosystem. Not. Ecosystems grow organically. As a developer you may tend to start from your capabilities and try to design your platform from the outside in. Again, but no. You need to figure out how your capabilities can help an existing ecosystem grow and develop.

Platform strategies need to be designed to help an existing ecosystem to emerge, thrive and work better: platform design is the equivalent of plugging wires between electric potential. Where a potential exists, the current will flow.

Platform Design Principle #3 — Use Self Organization to provide Mass Customization

The concept of mass customization, like the principle that growth of network is at the edge, is something I came across last century. In fact I read a book entitled Mass Customization. The principle of getting exactly what you wanted at a great price enabled by scale is very, very powerful. As self-service was the most powerful business principle of the 20th century, I believe that personalization is the most powerful business principle of the 21st. A key principle is reducing transaction costs through organization.

Platform Design Principle #4 — Enable Continuous Learning 

As I’ve written elsewhere, learning is job 1 for founders.

Learning must be both competitive (with peers trying to outperform each other) and collaborative, through mentoring and tutoring: helping each other works if there’s a promise of a broader market. To really learn, peers in the ecosystem need to also be allowed to give space to their true passions.

Platform Design Principle #5 — Design For Disobedience

Platform designers need to let the participants at the edge innovate.

This is the way platform shapers embed the Innovate-Leverage-Componentize cycle: first let the ecosystem dictate new expectations, then institutionalize them and leverage them (grow them at scale), within time make them components that the ecosystem can use, to invent something new.

Platform Design Principle #6 — Design For Interconnectedness

Relationships and interactions amongst the peers on the platform are the key business elements. The platform builder needs to design for both producers and consumers of value. Think YouTube as a great example of a platform where great care is taken for both side of the transaction: the producers/uploaders of video and the consumers/watchers of these videos. The sum of the value of an interaction must exceed the value of its individual contributions.

Platform Design Principle #7— Let go the identity, identify with the whole

A brand letting go of its identity seems intuitive. After all, what is a brand but a well known and coherent business identity? But the goal of a platform is to get the the participants in the ecosystem to identify more with the whole – the platform – and less with the platform provider. Think YouTube, not Google – owner and operator of YouTube. Or in VR, think Oculus, not Facebook. This enables smaller players to play a role in the ecosystem.

For would-be platform builders I strongly recommend you not only read this article in full but explore the home web site of the authors: there you will find a rich repository of wisdom about building and growing platforms.

Author: Mentorphile

Mentor, coach, and advisor to entrepreneurs, small businesses, and non-profit organizations. General manager with significant experience in both for-profit and non-profit organizations. Focus on media and information. On founding team of four venture-backed companies. Currently Chairman of Popsleuth, Inc., maker of the Endorfyn app for keeping fans updated on new stuff from their favorite artists.

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