Will platforms conquer the world?
Increasingly, companies are seeking to establish themselves as the standard platform in their space. Tempting them to do so are the vast revenue streams of established platform players such as Amazon Web Services, eBay and Facebook. However, product managers of software and hardware platforms face unique challenges that PMs of ‘regular’ products do not.
In this article #
In this panel discussion at a recent Tafra.io meetup, Hans-Bernd Kittlaus (Innotivium) discusses platform product management with Samira Negm (Raye7), Peter Stadlinger (Freshworks) and Jock Busuttil (Product People).
For more discussion, you may also be interested in the following edition of PRODUCTHEAD, my weekly product management newsletter:
PRODUCTHEAD: Will platforms conquer the world?
[HANS BERNDT-KITTLAUS] With that let’s go to the panel discussion I’m very happy that we have Samira, Jock and Peter with us and I would appreciate if you could briefly introduce yourself before we go into the discussion Samira do you want to start with the introduction?
[SAMIRA NEGM] Yeah hi everyone I my name is Samira obviously I worked for like almost 13 years in the technology field looking back half of it was actually in innovation platforms and the other half was in transactional platforms. And interestingly enough the innovation part of my career was in the automotive field the software layer of the automotive field I can maybe talk more about it in certain points that we will tackle and I worked in Egypt and in Germany. And then I founded my first startup carpooling platform where people share rights when they go to work or to the university and then currently I’m part of Schuna which is a platform for dry crops and agricultural products where we have at one side the farmer and the other side not the consumer but the finite processor before the concealer.
[HANS] All right thank you very much. Jock do you want to continue?
[JOCK BUSUTTIL] Yes hello everyone. My name is Jock Busuttil I am the founder of a company called Product People Limited which is a product management company. I’ve been freelancing as a product manager for the last 10 years and then I’ve been working in product for about 10 years before that as well as an employee. So I’ve had a chance to work with lots of different places and lots of different organizations in the private and public sectors. I was formerly the interim head of product for UK government and for the Ministry of Justice and I’ve worked at organizations from you know relatively large ones like Ometria down to relatively small startups and scale-ups like Tictrac and Prolific. And I’m also the author of a book the product manager … The Practitioner’s Guide to Product Management which is really a collection of stories about how I suck at product management and gradually figured out how to suck less at product management. So yeah have a read if you fancy a laugh at my mistakes.
Uh yeah there is there’s one there’s a Kindle version yep.
[HANS] Good right all right thank you Jock. Peter?
[PETER STADLINGER] Thank you my name is Peter Stadlinger originally from Germany but I’ve lived in the states for the last yeah almost 20 years now I’ve worked for a couple of different companies that offer or are offering platforms that started with Adobe then Salesforce and now Freshworks. At Adobe that was I would say I was part of the journey of building a platform because obviously Adobe is known for products like Photoshop and whatnot but about 10 years ago Adobe started a journey of building a platform for enterprise enterprise companies to deliver marketing and like visual experiences in in general and therefore was building a platform. And when I then joined Salesforce sales was was already a platform with a few different aspects that transcript already covered. And now at Freshworks we are back at let’s say scaling and delivering a platform at scale similar to let’s say where Adobe was. So with different experiences I hope I can provide an experience or like the perspective of what it means to actually build one or maintain it or to further scale it.
[HANS] All right thank you Peter. Well what do you think when when you put yourself into the shoes of a product manager who is responsible for for a particular product. Is a subject of platforms directly relevant for that product manager?
[PETER] Yeah absolutely right I mean maybe I’ll go first because I just talked a little bit about different platforms. When I think of being a product manager for a platform the first thing I think of is how much harder it oftentimes is than when you have a non-platform product. And the reason I say that is that if you have your own little product your P&L is very much easy to digest right. Like you can pretty much understand like what’s needed to maybe move the needle. When it comes to platform it’s much harder right because oftentimes you’re either doing it at no cost right or the the the revenue that you generate is often indirectly or hidden not always but sometimes. And therefore it’s even harder to than let’s say fight for resources or to get certain things prioritized so the first thing that I think of is how much harder it actually is to do platform product management.
When you say that are you are you talking about innovation platforms or transaction platforms I would say innovation right. But I would say even for transaction platforms like when we talked about it earlier right like you gave Uber as an example right the P&L is absolutely very very hard and you basically have to convince a lot of different stakeholders how additional and further investments will then eventually pay off. And oftentimes that’s a a gamble right that sometimes works out sometimes doesn’t work out. And that means there’s a lot of a lot of moving moving pieces to making your business case um, and I would say that in both cases whether it’s like a transactional or or let’s say technology it’s it’s equally a challenge I would say.
[JOCK] So for me the thing about platforms is they need to have some kind of gravitational pull and that’s the difficult bit. So whether it’s a you know multi-sided marketplace or whether it’s a technology platform that enables other businesses to build their own things on top of that, you still got to worry about how to attract people to use your platform over anything else. So if you look at the dominant platforms you’ve got Amazon which is both on the marketplace side of things a trans a transactional platform and on the AWS Amazon web services side it’s a innovation platform. And you have to kind of look at these things and say well why did they become successful. And in many cases it’s because they were able to offer different sides of the marketplace or different sides of the consumer supplier chain or whatever else an option that was cheaper, quicker and easier than doing it for themselves. So who is going to in their right mind invest in building a data centre when you can just use Amazon Web Services and compute on demand? Netflix when they wanted to build their you know their streaming platform didn’t have the money to go and invest in building their own data centre streaming services and Global content distribution networks so they relied on Amazon web services and they’re still one of the largest customers of AWS so this whole idea of platform has to be fulfilling some kind of unmet need in the marketplace something that connects two sides of a value chain, or two sides of a marketplace together that are traditionally difficult to connect. And providing it can do that a platform can be successful. But as so many places so many startups see it’s difficult to get people to gravitate towards your platform.
[HANS] When you when you think of a product manager —
[JOCK] Sorry Samira do you want to come in on that?
[SAMIRA] No no it’s okay. Hans continue and I will comment.
[HANS] But yeah that’s it’s also a question for Samira. When you when you think of a a product manager of a of a let’s say a normal product which would not be considered as a platform as of now, what does the concept of platform mean. Does it mean that every product should be turned into a platform or does it mean that every product needs to build interfaces to platforms. What does it mean?
[SAMIRA] Thank you actually Hans for saying that because I was going to build on the original question which was for product managers in general should we learn about platforms or not and how important is the topic. And I would say to go back and ask ourselves what business is the product manager is in. So for example if I’m working in a startup that is helping people organize their own finances. So this initially is not a platform business so I need first to figure out the best experiences the best interface the best experience like I’m going to give to the consumer first on his own, figure this completely and then maybe I can do something like sending money, so moving this from being just an individual or non-platform to being a platform. So it depends on the industry the stage and the value proposition that the startup, or like the business that the product manager is working in is actually offering. So the value of proposition is offered initially from the startup itself or is it from a third-party stakeholder? So depends on that and on the stage I would say how important is to know and to learn about the platform versus learning about funnels for example and mastering your acquisition and retention funnels of a single user.
[HANS] Mm-hmm. Would you agree with that Peter?
[PETER] Yeah for sure. I think that makes a lot of sense. The one thing that I would maybe add is similar to what Jock actually said said. Like the first and foremost I would argue that the customer comes first right that means you have to kind of build something that attracts people to even invest and flock or like even like a centre around your platform and then and that in itself has like the the the ask or like the requirement there’s like 10x better than whatever else they did. Like let’s say when we think of stripe right I think I I was just talking about that to my girlfriend the other the other day right we oftentimes forget how hard it was to to get approved and get like the account details in the bank. And then in the beginning the way they kind of started that is it’s a crazy story right how they never implemented technology that allowed you to automatically request those account details but they were the ones that send the faxes and the fax to the bank and then gave you the the details.
So that first six months or like the first year I think it was even that long that they never implemented any any kind of technology but they really focused on giving you that that 10x experience. And the 10x experience came from you not having to deal with the bank yourself but to to make it easier for you to give them whatever information you had and then they’ll take care of all the mess and what’s needed to get them the details. So that that’s one thing I would add is that the way I kind of always look at that is obviously starting with a P&L is a little boring and like like why would why would why would you start with a spreadsheet when it comes to product management. But if you can secure like if you can insecure financing right and all of the following conversations and topics are almost moot. But if you can secure financing whether you raise a venture capital or you are able to secure resource within the company but then the next step is obviously to really ruthlessly focus on that 10x experience because without that experience and no one’s going to really bother going going with your platform.
[JOCK] Peter show me any product manager that doesn’t go to spreadsheets straight away.
[PETER] I know it’s it’s crazy right at the end of the day we’re all in Excel yeah.
[SAMIRA] I want to actually add a point based on what Peter said like looking actually at what the customer really wants so if we look at the customer of Facebook versus the customer of uber the customer of Uber or the rider of Uber he really or she wants to be on a ride regardless of the driver is from a platform side or if it’s an Uber employee. What they really want is to have a safe ride from point A to point B but if you look at the customer of Facebook. They are actually interested in the other person in the platform. So here you can differentiate between platforms that are like it’s built on actually the other people versus the platforms like uber it’s good for the business model it’s good for the business it’s good for the scalability but one side of the business is not really interested if the other side was a platform or an employee.
[HANS] Mmm. Mmmm.
[JOCK] I think the concept of customer when it comes to platforms is is kind of a little bit ambiguous. Because really if you look at you know the most successful say for example innovation platforms essentially Amazon is making … in fact in both cases Amazon is making money on every transaction it’s making money in every bit of business that goes through their platform. So actually they don’t really have a concept of customers in the kind of traditional model because everyone is contributing some way. Because everyone is merely interacting through the platform to conduct business so they’re kind of an intermediary yeah. So from their perspective they do need to satisfy lots of different sets of people’s needs if you look just at the you know the Amazon web services they’re not just satisfying the needs of people consuming the APIs but also the customers of the people consuming the APIs they need to make sure that they’re fit for purpose. So it’s kind of you’re either one stage removed but you have to be generating value and that 10x experience as Peter was saying for all sides of that platform. But you you make your money by doing what Amazon and Google and Microsoft does which is getting a slice of the action every single time somebody does something.
[SAMIRA] But the paying user of let’s say Amazon the one is who’s purchasing is actually benefiting from the variety. So if Amazon have a lot of opportunity sellers I’m benefiting and not the not only the quantity. So it’s the quantity and the variety. Compared to Uber you’re not really making as a paying customer you’re not it’s not really a different for you the variety it’s what you want is the quantity or making sure that there is an Uber driver. But it doesn’t really make a difference if the car is blue or if it’s white. Not like when it comes to Amazon selling products and the variety is really important
[JOCK] Absolutely I mean it’s the it’s the utility of the service if you had Uber you know people wouldn’t use Uber if there were no taxi drivers available to actually respond to the call. Similarly you wouldn’t have many taxi drivers going on if nobody was using the app to call the taxis you know. So it’s that you know tricky chicken in the egg problem of beating both sides of that kind of transactional marketplace, and then you know how you generate that. So I I love the fact that you know there’s a saying where if you don’t can’t see where the product is you are the product yeah and so you know places like Google you know they created this free to use search engine got everyone using it they’ve got that gravitational pull to pull everyone on to using them as the the one and only way to search the internet and then it was actually an advertising platform.
[HANS] when you think of of transaction platforms like Uber do you see any examples that the same role or the same person gospels the the software product management and the platform management or is that usually separated in your experience?
[PETER] Yeah from what I see it’s oftentimes separated right so you have from my experience typically let’s call them let’s call them the inbound product manager right they are responsible for delivering the the piece of functionality. And then what I’ve seen is that oftentimes the introduction of like a growth product manager right where like they’re trying to hack it and try to think of creative ways to drive adoption to get it like out there into the market and to get people to even consider using it right. And in in our parlance that could then be the outbound product manager right. So I’ve seen that like maybe like in the beginning it’s a little bit of both. But I would say as soon as there’s like some yeah some fundamental functionality that is available you guys want to see that yeah separation of concern and to kind of split it into growth and let’s say platform and growth right. Whereas like if you kind of look at it from the outside it’s simply outbound and inbound.
[SAMIRA] I agree with Peter and in my previous startup we first had both both and in one role but again because we were a small team but it was we would see a huge difference in growth when we separated the two roles and someone was focused only on growth and someone focused on the tech. And we used to have a weekly meetings for prioritization for the whole strategy. It honestly it was a mess because like everyone was have their own focus but the good thing is we’re able to like get different perspectives into our roadmap and both perspectives were really important. And to have them separated is really important because if you have only one it will depend on the tendency of this person if he’s growth focused but if you’re not taking care of the technology part there will be a mess if he is technology or she is technology focused but not growth focused he will find your grow growth is moving slowly.
[HANS] Mm-hmm. Jock, you want to add something to this?
[JOCK] So in terms of roles and responsibilities I guess yeah you know once the I agree with with everyone else on this one is that there comes a point where separation of concerns is is necessary because actually the purpose of a person responsible for a platform is going to be different to people providing products built upon that platform.
Um so one of the experiences I had was was when I was working in government. And this was when there’d been like kind of a digital revolution and it’d been like a good few years into this now and so there are lots of organizations distributed across government all federated. So none actually centrally controlled they’re all actually independent and they’re all doing their own thing with their own budget their own people so you’ve got all these different you know separate departments and ministries floating around doing their own digital things. And gradually over time what you found was people were reinventing the wheel over and over and over again. So people were implementing their own you know payment or their own notification or their own email services and so gradually what happened is these people got together realized that they’re all Reinventing the wheel they’re all spinning you know cycles rebuilding stuff that people have already done before okay and so there is this government as a platform idea or government is a service idea where they’d start to just build common things.
Like if you’re going to do payments here’s a generic payments platform that you can just implement in your own thing which means you don’t have to write it yourself. If you need to send out notifications to people from your service or from your product then here’s a generic notification thing. If you need to send out paper stuff in the mail here’s a generic way to kind of send your stuff to get it printed and sent out. And so by implementing these modules it kind of emerged out of the realization that everyone was reinventing the wheel and just repeating themselves over and over.
Um but for those things to be successful the platform manager the platform products manager had to go around and make sure that what they created was really really easy to consume by the development and engineering teams using it but also met the needs of the services the applications that were doing it. So there’d be no point in having a payments platform that could only handle 10 000 you know simultaneous transactions when you’ve got 64 million people in the UK plus and you know a large proportion of those are adults who could be using the platform at any given time. So you have to anticipate the needs both of the people implementing or directly interfacing with your platform but also with their own customers and their own use cases and so on. And I think that’s the really challenging part because you’ve got such this broad set of requirements this broad set of needs that you need to take account of.
[HANS] That’s an interesting point that actually currently being discussed in Germany because they they discuss how to give money to people because of the energy crisis and they found out that the governmental systems are not able to transfer to do more than 100,000 transfers per day.
[PETER] (laughs) nice yeah.
[HANS] when you when you look at the current landscape of of transaction platforms, almost all of them are in B2C why don’t we seem more B2B transaction platforms?
[SAMIRA] But there are B2B transactional platforms maybe they are not quite known as the B2C ones but there are. Like platforms for B2B deals like looking for certain suppliers and also for export like in the current startup involved in we’re using a platform to export the dry crops. So in the platform you can find like a requests for proposals for or a requests for crops from other countries so there are but they are not as widely as known for us as consumers maybe they are known for each industry.
[PETER] Yeah because yeah exactly because I would say that if you just go by the quantity of platforms right like by consumers business I I would probably agree that it’s probably way more consumer centric platforms transactional platforms. But let’s say if that was true like even if let’s say let’s say even if we were to like kind of discount that out I would say one argument that would say that why they’re maybe like more on the consumer side is that let’s say businesses. Like it’s like the typical situation right where a business would rather try to build it themselves then to rely on another business to do that. And then only over time certain B2B use cases have become so obvious to basically Outsource and to not build it yourself that it takes a little bit of time to do that.
Whereas let’s say as a consumer it will never ever cross your mind to build your own Uber application right or because you basically rely on a business to build technology for you whereas let’s say beyond the reason that I mentioned in the beginning that they’re just like fewer B2B platforms to begin with um that that companies in most cases billips are electronic within themselves.
And there was one more thought and I don’t like become metaphysical right but like technically what I realized is that any B2B product is in a certain to a certain degree let’s say a platform. Let’s say at least from a technology standpoint. Because like it’s obvious what I see is that every product that I’ve product managed used to be built by each company themselves. Let’s say when you when you look at a content management system or when you look at a CRM like if you go back 10 20 years even today oftentimes the the the main competitor that we deal with is in-house build platform or like in-house build products. And then what you offer is a product that kind of kind of makes it standardizes it across different customers and needs.
And that’s like another observation that came to mind where you say that in the B2B world you still have to deal with the fact that each company thinks they should build it themselves and then you could make maybe make the case that those that do build it themselves like Apple like they’re like known to build everything themselves that that’s typically a sign for them doing well in general.
[JOCK] yeah I was just going to say there’s a really interesting guy called Simon Wardley who some of you may have come across he kind of has this idea around how to map out the evolution of you know software products, hardware products whatever. And he essentially puts forward the argument that everything gradually goes from being magical and new to being custom one-offs to being productised to being made more commoditised to being utility.
So if he gives the example of energy you know electricity generation you know before when you know Tesla was there you know making you know a Nikolai Tesla I mean was generates electricity it was like a circus sideshow. You know and then gradually people started building their own generators or customs they don’t talk to each other they don’t you know interoperate with each other. And then gradually gradually they standardize narrower saying voltages the same currents and so on and then gradually gradually gradually you know we end up with a situation we’ve got these huge generation systems that dual stuff for us and we just plug something into the wall and we have available to utility electricity.
You can see the same thing with Amazon web services arguably as well you know the evolution from magical to utility you know consume on demand. So if everything kind of is generally moving towards that commoditisation towards that utility mode that yeah gradually everything else will gravitate towards that the commonly used functions will become utility in the grand scheme of things and parts of the challenge here I think is to recognize which stuff has already made that leap and therefore it is not worth at all us trying to build again for ourselves, you know.
Who’s going to build a payment transaction you know broker when you’ve got Stripe or when you’ve got you know any of the other ones out there? Who’s going to build their own data centre when you’ve got Amazon web services or Google compute or Microsoft Azure yeah so I guess the thing here is first of all recognizing are you in a market that’s already made that leap towards commoditisation and utility and do you really want to try and build it yourself or have you genuinely found an opportunity where that hasn’t happened yet and everyone’s still dealing with custom stuff or maybe it’s made the leap to product but it hasn’t been turned into that utility service.
You know I like the example of SpaceX it’s kind of like rocketry as a service. It’s they’ve basically brought the cost down and they’ve made their platform reusable and they’ve basically made it available to everyone so if you want to stick something in a rocket and fire into this space you’ve got SpaceX to provide that service to you so you don’t have to worry about building your own rocketry platform anymore.
[PETER] You say I think it’s a perfect example like like I think like when when you hear just Jeff Bezos talk about his business right he says he’s trying to build a platform that allows other businesses to build on top of that. So perfect example there.
[HANS] Yeah but still I mean in in general we still see emerging competition in areas where we may not have expected it right. So currently when you think of of the database market it has been dominated by Oracle for a long time but suddenly there are new players who seem to really hurt Oracle. So that is that is interesting to to watch. So that that may be a bit in contradiction to to what you said, right? That that when everything everything goes towards one big existing solution there may still be room for competitive offerings.
[JOCK] Oh absolutely I mean well assuming Oracle is an example of a monopoly which it isn’t and hasn’t been for a very long time, the the thing here is that when something comes along that’s cheaper, quicker, easier to implement then of course people can use different stuff. Who on earth is going to go and shell out for an Oracle license when you can use Postgres or MariaDB or something else that’s free and open source you know and basically does what they need. If you don’t need something that specifically requires the power of an Oracle database then you’re not going to bother paying for it. And then that is still obviously made into a service now you don’t need to spin up your own servers you just get RDB off Amazon web services again. So you know again it’s that kind of idea of if you don’t innovate, if you don’t recognize that trend towards commoditisation these upstarts are going to steal your lunch.
[SAMIRA] I would also want to add that when whenever a platform is so big there is always a room for competition in niche markets. So either it’s a smaller startups that will not pay a fortune for Oracle or even on the consumer like you can see this on the on the consumer side so Amazon is great to buy anything. But for me if I will buy in fashion I will not buy from Amazon because they didn’t tailor their platform for specific very niche or like niche needs. So one platform to conquer all I wouldn’t say so because there will always be room for niche and specialization.
[PETER] Anything Muhammad raised his hand? If that’s my mistake or
[MUHAMMAD] Yeah it’s not by mistake I have a question but maybe I thought when you finish this. So my my question was about like you know the previous part when you asked them about the platform manager and Samira said something very important and small teams, usually maybe the two roles played by one person, but in other cases. My question here for for the panellists what what should we do like if in a small team we have two different persons and one of them is a platform manager and he’s a CEO as a as I said at the same time. Like he’s he’s responsible about you know acquisition and growth and and all of that like maybe any manager was only the CEO. And definitely on the other side we have the software product manager is the one who’s building you know the infrastructure and every like on and the other aspects of the platform. How how should we deal you know with the different person? Like okay this one this the CEO like this managerial position focuses on growth and acquisition. And the software product manager has a different point of view about this so what do you think about it?
[SAMIRA] I I think what you said is definitely a better and the opposite if the CEO is the technology person is this is a much worse situation than if the co is the one who’s focusing on the platform because the business mostly comes from the platform side and the technology enables that. So the CEO by nature should be focusing 100 on growth so if it’s if it he happens to be the same person as the one who’s managing the platform in the early days I I think that’s not a bad sign. But again he needs to manage with the other responsibilities of hiring and fundraising and so. And managing the platform is a very very important task or job that shouldn’t be prioritized lower than any other task also fundraising also recruitment. So if he was not able to manage, he needs to hire someone who’s focused on the platform.
[PETER] I would I would say something controversial right because and it’s I would say the American mindset. Because like when I first moved from Germany to the US I got it backwards because the German mindset is you build a product first and then you figure out how to Market it right. Whereas in America it’s a little bit different. Like I remember like one of my Executives or like told me once product follows marketing and that was so beautifully said that it didn’t even raise any concerns that you would have with a German mindset where you say are you saying that the that the product doesn’t exist yet right? So if if I had to then use that approach which I totally agree with I would say in in the early beginnings I would not focus on the software part at all right? I would only focus on the growth part and trying to basically um let’s say I wouldn’t even say value-market fit like that that’s like obviously like I always um like product-market fit. Like product-market fit is typically the typical term but I would not even call it product-market fit I would call it value-proposition-market fit or value-product or like value-market fit is the value proposition even in there in being look for and seeked for by the market. That means in the beginning it’s all growth and then when you go back to the example that I gave regarding Stripe where it’s all done manually behind the scenes with no technology, that’s how you then validate that it’s actually in demand. And if there’s demand and you go quickly quickly uh fill the gap and build it right. That’s my controversial take on that.
[SAMIRA] I want to thank you Peter for bringing this up because this is exactly the mistake I’ve done in my previous startup we started with product first and this is completely wrong I wouldn’t advise it.
[MUHAMMAD] But also did you think Peter there’s like nowadays is the right approach when you focus on growth whatever at the early stage or like. And then you try to build the product and maybe discover that your product is not fitting 100 with the market. But at the same time you have you know high potential and have you know numbers growing. But what you are trying to automate or like innovate with is not fitting with the market. Do you think this applies now?
[PETER] I I would say yes because like to I would say, to Samira’s point right, it’s very very hard to build something where you don’t know the exactly like the exact requirements. That’s why it’s so hard to build the product if you do it the wrong way right. Because you’re building for any requirements. But the other way around if you are basically just bringing in revenue right based on a vision that you sold then you can actually much easier go and and then build that product. So I would say yes it is like I said I had to learn it myself because when I moved to the States it was a culture shock right. Where it took me like years to understand how that’s not uh. Because like with the German mindset it feels as if you’re like as if you’re scamming customers right.
And a lot of people actually have that issue where they say like well how can I sell a product that I don’t have yet right. Whereas in this case what you’re doing is simply validating whether the the value proposition even um works and if it does work then you can hold the business. Let’s say worst case is you oversold it to the point how Oracle did it back in the 90s right and then you almost go out of business. But obviously like a lot of us won’t have that issue where obviously the division if you sold will probably be something that you catch up on let’s say in six months right.
[HANS] That is a fine line between creating your business model and cheating your customers right.
[PETER] That’s true that’s true.
[SAMIRA] I I would want to like focus on this point because usually as founders we move quickly between validating the problem two wanting to reach the product-market fit. But this is actually there is actually a step in between that we forget which is validating the solution problem fits so is my so we validated the problem we know for sure so we need to validate the solution and it doesn’t have to be using technology. It has it can be using a call center it can be a very manual exactly a WhatsApp about WhatsApp Group whatever it is Facebook group it doesn’t have to build a mobile a website or a platform you don’t have to build the platform physical platform first. So you have to validate the problem solution first get it working generate revenue as Peter mentioned, and then start start automating what you figured out using technology to scale. Unless you’re building something like Stripe so in that case you have to build a product. But in most cases this is not the you don’t have to build the the physical technological product first.
[JOCK] Absolutely I couldn’t agree more Samira. And I think this idea of trying stuff out as you say to validate what you’re doing and how you’re going to go about solving the problem or the unmet opportunity or whatever is out there is really really important. People like want to just jump in and build the thing right but as you say it’s like you know number of people who sort of do a startup saying oh we’re going to build this two-sided marketplace and we’ll do this this and this and say. Well before you jump in and build your app or you know spend all your seed funding on development how’s about you actually go and figure out whether anyone wants to participate in this marketplace yeah. Is there going to be demand on both sides can you build up a network of people who are interested in this thing and then figure out as Samira is saying how to automate it when you you’ve actually figured out that this is worthwhile doing.
But it’s kind of idea I think is particularly interesting when you set out as your business to be a platform. Whether it’s a marketplace or whether it’s a innovation platform you know kind of a technology platform you’re expecting other people to take and integrate into other things. If you’re setting out your business from the outset to do that then you have this really challenging thing where you’re kind of always jumping between first of all attracting the people to the platform but then catching up with the platform to make sure it can do the things that people want to do. But then listening to what people are trying to do that they can’t do and then expanding it further and so on.
So you’re it’s a really tricky thing it’s got many more moving parts than more traditional products where you just solve a particular problem you sell the product in, end of story. So this idea of kind of testing stuff out testing out aspects of the complex, multi-moving part thing by testing one part at a time and then trying different options for those parts you can pick the best things out of that lot, is is is so so so important. It’s even more important with a platform.
[SAMIRA] I also want to build on what Jock was mentioning. Testing separate parts this is really important. Because we all know what’s agile and what’s clean but on on ground no one is really implementing agile right. So a try to organize the work into Sprints but are we actually selecting the most valuable user story or scenario to tackle and testing it separately. So we don’t have to start with building the login and the sign up. So this shouldn’t be the start of building the products. So like really testing smaller parts that doesn’t have to be at the same. So you can test something using Whatsapp group and another thing using phone call. And it doesn’t have to really integrate. So you can test this and this that are not related at all and start one by one figuring out the different parts of your system, and the components of your platform or product. And then you start building it properly you. So you should start like quick and dirty with different parts that doesn’t have to be next to each other. But you need to start with with what’s really important for the customer.
[HANS] Jock you raised your hand?
[JOCK] No I was just a thumbs up agreement agreeing with everything Samira was saying there.
[HANS] Okay okay. I would like I would like to go back to what Peter said before. I think you said that you could argue that that every B2B product is a platform. I’m not so sure about it and what’s your …
[PETER] No I agree no I agree like I was just saying it was like a like a for the first time that I kind of popped up in my head. And when I say I mean it’s like hard to say like I mean to your point like it’s very hard to make that argument that it’s that is always a platform. But I think it generalizes and kind of pulls out all the features that let’s say each organization needs and then requires each organization to really ask themselves, do we really need to build something ourselves, or could we possibly reuse an out-of-the-box product right. And that’s like like I would say that’s a question and then often um let’s say some of these B2B platforms then also ask you right.
Like do you really need to go ahead and build your own payment processing infrastructure and platform. Or could you possibly initially at least right like because eventually everyone’s clear or like everybody degrees that they should be using the stripe now. But let’s say five six seven years ago it was a different conversation right like where people would then evaluate stripe and then conclude that it’s not working.
Or if you go back to let’s say in early beginnings of SaaS where a lot of customers companies would say that they would never use anything in the cloud because it doesn’t meet their let’s say security standards. In 2022 it’s probably the other way around where no business in their right mind would would use on-premise for the same reasons right. So what I’m saying is that I agree I wouldn’t I wouldn’t want to die on that hill to to make that that argument. But it kind of reminded me of how B2B products problems have the same same characteristic.
[JOCK] Well here’s here’s another interesting thing. So do do will platforms conquer the world you know and we’re kind of looking to these huge platforms like Google and Facebook and Apple. And we’re saying well you know they they can’t possibly fail they’re too big to fail. And then we see the headlines like Facebook had a sort of an internal leak that was showing how concerned they are about the demographic crisis they’re facing. So let’s put it in context what’s happening is Facebook has got a much older demographic than they want they’re not getting the new users, the younger users joining yeah. Because Facebook to them is their mum and Dad’s you know social media platform not theirs yeah.
And so here’s the problem so if your entire business is predicated on having a huge number of users and you know let’s face it Facebook aren’t in trouble yet, but if that audience goes away to something that’s more fashionable, on trend, then you’re left with no audience for your advertisers you’ve got no audience for the app makers who are building stuff to sit inside Facebook Marketplace, you know the app Marketplace and so on. So suddenly if all of your you know if one side of your marketplace disappears then your platform is going to fail because everyone’s already gone somewhere else.
And I think exactly this is this is the the difficulty this is why any platform has to be so much better at innovating than its competitors. And either acquiring or diversifying to address the niche aspects that Samira is talking about. Because they don’t they’ll realize that they’re standing still, everyone’s moving faster than them and then their market will just disappear from underneath them and suddenly there’ll be a platform with nobody on it.
[HANS] Well I mean that’s that’s another interesting subject with these kind of transaction platforms. They all cheat and we know that. I mean the level works for an internet platform you know they cheat because they count dead registrations. And it was so funny that Elon Musk used that argument to get out of the Twitter deal. Because everybody knew that and I’m sure he knew it as well.
[PETER] Love it
[HANS] All right it’s already 10 minutes to nine thank you very much for this most interesting panel discussion. Before we finish is there anything that you would like to to add? Peter?
[PETER] I mean like I think you showed a slide earlier right. A lot of different components like like how to go about it and whatnot. But I think there’s one more component that like one ingredient like we don’t have like have a long conversation about that. But like I think the slide that you showed had like Google Apple and others and then there’s like also the time component right. Like no matter how creative or how smart you are and how good you are at actually capturing the customer demand if if you’re on the wrong side of time there’s nothing you can do right. Like there’s certain network effects that are so strong and if you’re like the first to Market or the first one who gets it right. Then that’s also like the valuations that you talked about right like the valuation is not so much based on how good these platforms are but more so around the fact that no one will realistically be able to um challenge them or even beat them right. So time is then often that’s overlooked and but that’s like obviously the most glaring aspect in my opinion.
[PETER] Which it also means product management is oftentimes getting the timing right right so it’s not only about like all these other things but like are you truly picking the right time to go about solving a particular problem right
[SAMIRA] I would say also quality is something that is really important to address when we’re talking about platforms. So the whole idea from platforms in the beginning that the marketplace or would especially the transactional platform would filter itself via ratings and reviews for example. But then when the platforms got so big we see the tendency that the platforms put their own controls. So you would see for example Amazon having the tags like top seller Amazon verified and you would have also Upwork with a top talent tags. Like you can see that it at first it started with community doing the control and then you can see that whenever the platform grows there is a tendency for getting back and doing their own vetting. So the quality aspect and how much the platform owner should interfere in vetting and ensuring the quality of the platform is a topic that depends on the stage you and it is an important point to take care of depends on the stage of the platform. So early on it’s really important, in the middle somehow it’s self-vetting, and when the platform is very big you will you see a tendency to get back into imposing quality controls again.
[HANS] Mmm. Jock you want to add something?
[JOCK] Yeah I think Samira’s point about being able to trust the platform both in terms of you know does it fulfil the job but do you also trust it not to do something weird and wonderful with your information is is super important. And you know there’s lots of examples you know that Cambridge Analytica versus Facebook kind of situation to drawn from there.
So I think for me the kind of point I want to end on is that kind of concept of nothing ever stands still. Everything is evolving towards becoming a utility so the price will reduce the cost will reduce the ease of consumption will get greater and so on. And so really if you’re trying to build a company that expressly wants to become a platform, you have to think to yourself, how can we be not just the easiest, cheapest, quickest thing on the market right now, but how can we be the cheapest, quickest, easiest option to people in five to ten years time. Where do we need to get to to remain to basically stay relevant and stay ahead of all of these other people trying to eat our lunch.
[HANS] Mmmm so you you are saying these kind of companies better have a long-term strategy?
[JOCK] I think they need to be aware that it’s not just about the here and now. Your long-term strategy is only as good as your ability to understand your context and to see the market trends and see what your competitors are doing and see how technology and user demand is evolving. Because if you lose track of those things, because you’re not doing a user research, because you’re not engaging with the market you’ll be left behind you’ll go in the wrong direction.
[HANS] all right. Muhammad, do we have any questions from the audience?
[MUHAMMAD] So guys if you have any question please either raise your handle like text message or like write a message in the chat box we can have. And actually I have not not like a serious question but the main title of this meetup is will platforms conquer the world and even ask the panellists this question.
[HANS] Okay so what’s your opinion?
[SAMIRA] I would say platforms are getting stronger. But they still will be I wouldn’t say Industries, but some services that cannot be offered by platform, due to its for example criticality. So you cannot really get an ambulance through a platform really easily. Like whenever the quality and the time criticality is very very very important, we will still see the need for the pipeline model where the quality is controlled firmly. But in all the other aspects platform yes will conclude the world.
[HANS] What’s your view Peter?
[PETER] Yeah I would agree with that I mean um. I mean yeah hard to add anything other than what was already said about like but I would agree with that.
[JOCK] I think platforms already have conquered the world. I think we’re we’re already there. What all that’s going to change is who is running the platforms and which platforms they are and how complicated and you know higher level they become. But you know you turn on the TV you pull up Netflix that’s a platform that’s a platform. Your TV talks to Google that’s another platform you know. We’re already there there’s very little of Our Lives that aren’t already running on some kind of platform or combination of platforms. The question is what higher order problems and challenges will these platforms evolve to tackle in the future.
[MUHAMMED] I think the next Meetup hand spread we should talk about what after having you know all of these platforms and to talk about the economy and then what’s behind them.
[HANS] Alright. Well thank you very much. I’ve enjoyed the discussion a lot. I hope our audience has as well. So I wish you a great rest of the evening or rest of the day to Peter and and and take care.
[PETER] Thank you.
[SAMIRA] Thank you Jock, Peter and Hans Mohammed good to catch up and have a nice evening everyone.
[HANS] Thank you everyone.
[MUHAMMAD] Thank you bye-bye.
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