I’m bombarded daily by so many people building “ecosystems”, I think I’m living in a dog’s mouth or the Amazon river basin, so teeming with life is our 3D printing world. Everyone is building an ecosystem or a platform. I think that it’s generally very insightful to take a step back and conclude that it’s absurd that a lot of players in this industry seem to have exactly the same strategy. And if you ask them what an ecosystem is, or what matters, you get very different answers from all concerned.
Vaguely from the mists emerges a series of thoughts that seem to indicate that a company can be a platform upon which other companies do business. For someone to do this, they have to have some kind of marketplace functionality and take some kind of a cut. Their customers will then benefit, as do outside firms, and, altogether it’s a seamless dream that drives ease-of-use and extends your products. External people will make their stuff better and charge others.
They are not a machine maker. they are building an eBay for injection molding or an AWS for filament. Where is this stuff coming from? Is there a Jim Collins–Spencer Johnson collab called Good to Grater that I missed out on? Where’s the data that this even works? Who could this work for?
I’m the platform and I moved your cheese. Image Didriks.
The “platform strategy” concept is sometimes used interchangeably with the “ecosystem” claim. But, other times, they are different. Sometimes the ecosystem seems to be that you have a product and then all sorts of other people partner with you to in-fact standardize themselves on your product.
In this scenario, you are not a candle manufacturer, but a luminary platform for connecting the unlighted with end-to-end lighting solutions. Under that guise, everyone should make their candelabras, lamps, and chambersticks to your specifications. Once they do this, they should give you 15% of all lighting-related revenue. Or maybe they don’t give you anything, but after many cordial handshakes the spirit of enlightenment glistens off your pasty skins with such luminescence that your saintly glows will metamorphose hope into EBITA.
I mean it’s nice being ambitious and great that you’d like to emulate Amazon or Apple or Salesforce, but why would this work for you? What do you have to offer? The aforementioned corporations had huge resources and a giant client base that was in near-perpetual contact with them.
Platforms are a plutocrats’ game, where a dominant player entrenches and extends itself through harnessing unparalleled reach and a giant customer base into adjacent markets. Platforms and ecosystems are, to me, a billionaire’s second act or a way to recycle existing customers by cross-selling them services. For the leviathans, this is a game that will get you a bigger plane. For the rest of us, it’s probably not a wise or realistic choice.
They willed their platform plays into existence with billions in funding and millions of customers. They are big enough to make their own gravity and planets. You are an asteroid at best, careening around a universe upon which you can not exert any control. Their moves are news and they have huge reach and credibility. Can the rest of us achieve the same escape velocities with our dreams?
In which cases could a platform make sense? For what markets, value chains, or circumstances? No one, so far, can answer me that. And it’s this that has my internal bullsh*t meter going haywire. A platform is proposed as a near-universal sop—a catch-all strategy that can be universally applied in all cases for everyone. And this to me signals that it is a worrisome choice for most.
On the Caribbean island of Curacao, and in many other places, they have a product called Alcolado Glacial. It’s a little bottle that you can take everywhere that has a menthol aroma and is 76% alcohol. They call it “air conditioning in a bottle” and spray it on when it’s hot. But Alcolado Glacial is so much more. Have a headache? Rub some Alcolado Glacial on your temples. Trouble sleeping? Spray some Alcolado Glacial on your forehead. Flu coming on? Alcolado Glacial. Joint pain? Sore muscles? Upset stomach? Insect bite? Alcolado Glacial.
A friend told me once that, when he was a child, whatever the injury, a quick dab of Alcolado Glacial would be applied by his mother or grandma. It was also used to help babies sleep. In some cases, Alcolado Glacial may have a beneficial effect, but in all cases, the people of Curacao have conditioned themselves to experience love and tender care from a bottle. The smell and sensation mean that the pain will go away and will not last forever. I believe that a platform strategy is the business equivalent of Alcolado Glacial.
Wanting to be a platform is like me waking up one morning and deciding that It would be nice to be a football club and proclaiming this loudly to the world. If enough people hear me, surely I will transmogrify into a football club. This is plainly absurd, but so is your strategy. This example is just clearer because it is not couched in ConsultantSpeak and doublethink.
I don’t understand the underpinnings of the ambition of why specifically this would be a good strategy, and what steps are being taken to make this happen? There’s a disconnect between the moment of proclaiming this strategy, partnerships with like-minded folk, and any subsequent building of the reality. I’m really beginning to think that platform strategy may be a kind of corporate magical thinking.
“Magical thinking, or superstitious thinking, is the belief that unrelated events are causally connected despite the absence of any plausible causal link between them, particularly as a result of supernatural effects. Examples include the idea that personal thoughts can influence the external world without acting on them, or that objects must be causally connected if they resemble each other or came in contact with each other in the past. Magical thinking is a type of fallacious thinking and is a common source of invalid causal inferences. Unlike the confusion of correlation with causation, magical thinking does not require the events to be correlated.
We are in trouble, dead in the water, and the competition is breathing down our necks. What if we say we’re an ecosystem? Wow, it sounds interesting to be an ecosystem. Everything undefinable will be better and we won’t have to actually improve our product. We can leave mere economics behind and dream of a reality where the actual business conditions and problems we are in don’t matter anymore.
There is no competition, just strategy. We don’t have to build a better basketball than the Chinese, we just have to change how we think we see ourselves. Instead, we’ll be the basketball court and the Jordans will show up to fly. And then all of our problems will be solved and we will grow. Excellent, let’s put out a press release and shake hands with some people. Then, we do some software thingy, make an API, and wait. And just like this our future will grow. From the aether, money will flow, like gold tears pouring from lead, brought to life through incantations and alchemists.
Or, perhaps, we can have a more positive scenario. Perhaps a better metaphor is to see the platform or ecosystem strategy as corporate homeopathy. So, you take an idea, dilute it, shake it, and wait for the competition to go away. There’s no basis in fact, rhyme, or reason, but if we all do it, we could create a cottage industry of self-delusion. Similar to the homeopath, companies should of course be mindful that the cure’s suffering should mimic that of the disease. So, maybe take some Ketamine to mimic the managerial stupor that your Dunder Mifflin of a 3D printing company is in.
Maybe a platform strategy is the last light of a dying star, a last withering elephant’s trumpet before the trip to the graveyard beckons, a befuddled aging film director plucking at the last vestiges of his mojo as he slides into irrelevance with one more desperate rehash of former glories and triumphant futures unlived. Maybe going platform is a corporate white flag. Maybe it’s a signal that you’ve run out of ideas? Maybe it’s a way to delay a withering? A sigh escapes the leader as his belly-deep breath flutters over his handkerchief. He is in over his head and is the captain of a ship destined to hit an iceberg. It is a question of when. Could I buy a few more months in the limelight perhaps? Could this be enough to let my options vest? The piquant tickle of the word “ecosystem” ricochets around his mouth. He knows it: its time to go platform, Après moi, les chinois.
The absolute most positive way I can now see a platform strategy is as the placebo effect for businesses. You don’t have a strategy but as long as you think you do, you can get on with your life. And it will feel so good to not have to worry anymore about the competition, your deteriorating economics, your imploding margins, your lack of innovation. Just take a deep breath and relax, don’t think the hard thinks anymore. You don’t have to worry any longer. Exhale, you will be a platform.
But, whose platform is it anyway? Let’s imagine that imagining is enough to make a platform or ecosystem happen for a second. But, if I have a platform, you have a platform, and we all have a platform together, whose platform is it anyway? If my platform connects to your platform, do we both win? Do we both now have a bigger platform? Or do I cease to have one, if your platform ends up being bigger? Do we all think we have “the” platform and the value will accrue to us? Or is everything better for everyone magically?
Will we all move faster together, even us together with our competitors, because we’re building these ways to connect us all according to our own standards? But, wait, what about having well-defined industry standards instead? We can build roads accessible for everyone instead of race tracks for the powerful. Can’t we just abide by standards and all work together seamlessly? Or is it somehow better for you that you are the standard?
So, it’s actually a selfish strategy that gives you power? While replacing common infrastructure with a walled garden of our collective making that you control? And you think that we haven’t figured this out? But, of course, we’ve figured it out! Because we too have a platform strategy.
Top image Chris Dulgosz.
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