Transforming from a Product to a Platform Company

For 20+ years I’ve dedicated a large part of my career to stewarding the evolution of organizations as they transition from a product focused company to a platform.

Recently I’ve been asked about my definition of a platform? Why is it an important step in the evolution of a company and what is the role Business Development plays in that transition?

I’ll do my best to answer those questions in this Blog.

I got hooked on the movement early on when the godfather of multi-tiered architectures,

Alfred Chuang said: “The strength of any platform is defined by the number of partners standing on it”.  At the time, Alfred was CEO of BEA Systems a young, scrappy Java App server company. Alfred knew that to outpace IBM in the JVM market, he had to assemble the best set of partners building on top of his platform.

As we look at the rise of a few notable platforms in the past decade, patterns begin to form.

Facebook – When Facebook broke away from challengers like:  MySpace, Friendster, AOL, etc. there was a few noteworthy differences.  Building your online profile in Facebook is a simple point, click and upload some pictures into a predefined template. The customization model in Facebook is a simple process. MySpace on the other hand, had limitless combinations of presentation options and was

customized via HTML Tags. Great for geeks.  Bad for grandma.  The second compelling feature of Facebook is the ability for third party apps to target the growing community of users with very specific messages based on massive amounts of personalization data. Personalization data, on not just where you were born, went to school, your major, where you work, where you’ve lived, visited and what you ‘Like”, but your entire network of fiends, their profiles and so on and so on.  The flywheel effect kicks in when you can invite partners to build an app on Facebook.  Apps like Spotify, Airbnb, LiveNation etc.  The fourth key attribute that Facebook also has the pole position on is the control point as they stand as the gatekeeper to all your news feeds, interactions with friends, life chronology etc.

iPhone – One of the greatest platforms on the planet.  The commonalities to Facebook are resounding.  Easy, standardized, custom development model.  Massive installed base of loyal customers.  A multitude of persona’s and usage models.  Now every company must have their own customized iPhone app to: 1) Access the throngs of iPhone enthusiasts who crave the standardized UI and User Experience( UX) that is uniquely iPhone. 2) take advantage of the personalization data that is captured by iPhone e.g. your location, places you visit, place you call home, who you communicate with, your browser history, who you transact with etc.

iPhone has a very rigid app development model that takes advantage of platform services like a camera, GPS, microphone, motion accelerometers.  Using the platform features in a structured, certified dev environment has enabled 1000’s of aps in gaming, travel, finance, music, sports, affinity groups and commerce.

To recap the key attributes of a platform:

• Community – Scores of happy users of an anchor tenant app.  You must have this first to entice developers.
• Customization Model – An app dev environment enabling developers to consume rich services served up by your platform.
• Third Party Apps – A wide range of apps built on the extensible customization model consuming platform services.  These apps are often certified by you to make sure they are addressing all of the platform features in a correct manner.
• Control Point – A controlling layer that serves as a centralized information bus for either data, experience or both. When developers use your control layer to access critical data or drive the UX, your platform becomes ultimately sticky.

Transform your Company

Most companies start with a great product idea.  This singular product takes them to being a successful product company with traditional engineering, marketing, and sales. The total addressable market (TAM) of that company is gated by the market size of that one product.  Case in Point – VisiCalc.  Before there was Excel there was VisiCalc from VisiCorp.  This early spreadsheet program, first released in 1979, was originally exclusively for the Apple II.  It was seen as a the “Killer App” for the Apple II. In effect the reason to be for this new compute platform.  People were known to buy the $2,000 Apple II to run a $100 VisiCalc Spreadsheet program. VisiCalc was originally marketed to financial professionals who were looking to use the Apple II. Sold through boutique computer stores, the small TAM, and narrow channel resulted in about 700,000 units sold in six years.

In 1988, Microsoft released Office.  It included Word, Excel and PowerPoint as a bundle. Really it was just marketing three separate disks, installs and apps as one suite.  It had a customization language in Visual Basic for Applications (VBA), enabling user-defined

functions (UDFs), automating processes and accessing Windows API and other low-level functionality through dynamic-link libraries (DLLs). It joined and replaced the abilities of earlier application-specific macro programming languages such as Word's WordBasic. It can be used to control many aspects of the host application, including manipulating user interface features, such as menus and toolbars, and working with custom user forms or dialog boxes.

Suddenly the TAM that Microsoft was addressing was much broader.  Not just financial pro’s, but writers, presenters, collaborators. This new set of knowledge workers demanded a suite of apps that were integrated and had dynamic data transfer for building graphs in Excel and having them auto appear in Word or PowerPoint presentations.  The ability to customize and control all of the apps via VBA brought in third party app developers eager to build apps on top of the Microsoft platform. Combine the power of the platform with multi-channel sales e.g. resellers, online, direct, Fast forward to today.  Microsoft has sold over one billion licenses of Office.  That’s 1 for every 7 people on the planet.

Business Development


An interesting organizational change happens when you decide to shift from being a product company to a platform company.  Business Development (BD) takes a center role in the org. As a single product company, BD was probably focused on providing leadership for Systems Integration partners (SI’s) to assist in successfully deploying your product for customers and maybe integrating your product with existing or third party apps.  An

important function but one that changes dramatically as you become a platform company.

To validate you as a platform company, BD takes on much broader functions:

App Developer Communities – This is a 1:Many function where platform API’s are exposed and supported by partner oriented engineers.  Engineers who are versed in your platform and the multitude of partner app use cases that can delivered by using your platform service.  Exposing your services into popular dev communities Integrated Development environments (IDE’s) like Visual Studio, Eclipse, and run-time execution environments e.g. EJB’s, Ruby, Google App Engine, AWS AMI’s and Lambda, Containers, etc. making sure your platform Software Development Toolkit (SDK) supports the permutations of IDE and run-time environment.

Co-innovation -  This is a 1:Few function where select ISV’s are identified as lighthouse apps to integrate to, build on top of and even OEM your platform because of its unique control point in the stack or UX. The key is to define and co-innovate on a joint solution that is unique to your and only your platform and then keep that integration fresh and ahead of the other platform competitors. The BD teams engage with these ISV’s for a more intimate discussion that probably includes some of the deeper engagements described below. Many times these ISV’s are singled out by the product or sales teams because of their prominence in a market space, geography or industry vertical.  E.g. Schlumberger in Oil and Gas, GE and Siemens in healthcare etc.

Co-Marketing – Once a joint solution is defined the 1:Few Go-to-Market (GTM) plan put in place, invariably contains Co-Marketing. Doesn’t matter if you’re a 10 person start-up or IBM, your contact lists and the numbers of times you can hit these before people opt-out is finite. Partners often have different installed bases than you. Partners leverage each other to market to those installed basses.  Leverage is garnered by leveraging each other’s brand equity.  People are much more likely to respond to a Call to Action (CTA) from a brand they recognize than one unknown to them. Exhibiting at each other’s users conferences and trade  shows brings in a whole new audience.  Even something as simple as a joint press release can be impactful in an over-saturated world.


Co-Selling – This is when things get interesting.  Now that the sales teams have something that is unique, compelling and differentiated to discuss with customers, it’s time to do the account mapping and joint selling.  This is generally done on a grass roots level region by region, rep by rep, account by account. Quota buckets,  accelerators, Sales Promotion Incentive Funds (SPIFS) all determine

how reps focus their energies. As the life blood of their W2, reps are extremely protective of their accounts, so letting another partner in for a pitch is often an exercise fraught with risk.  But as is often the case in many B2B relationships, knowledge displaces fear and replaces it with trust. Understanding how your counterparts are goaled and compensated is critical.

Co-Delivery – 3:few. This is the final mile of a true GTM partnership.  When two product companies come together, what’s often overlooked is actually the most important aspect and that’s customer success.  Solutions, especially joint solutions require specialized expertise and focused alignment with key SI’s that are well versed in the joint solution and have the same obsession towards customer success as the ISV’s.  The further they get away from your own core product, your own Proserv org's expertise will diminish. Partners aligned for your mutual success are key here.
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The rewards for making the difficult transition from a product company to a platform company are significant.  With all its interconnections and eco-systems supporting it, your platform becomes infinitely stickier, customers are far less likely to displace your platform for a whim of pricing or functionality.  Your long-term revenue and market cap will reflect the widened TAM.  Just ask Facebook, Amazon, Google, Microsoft, Apple and the host of other iconic brands that have successfully made the turn and have dominated.