Platform Economy Myth #4: If You Build A Platform, Developers And Customers Will Come
We’ve been analyzing the sacred myths of the platform economy and revealing the real practices that platform businesses have mastered. This is work from our report, “Earn Your Place In The Platform Economy.”
Myth #4: If you build a platform, developers and customers will come. Reality: Every day, you must earn the trust and investment of customers and developers by solving their immediate problems.
Most companies have already fallen into this trap. They build elaborate API strategies and even developer portals, then wonder why the uptake is so slow. General Electric fell into this trap with Predix. It’s the wrong place to start.
The first practice in the platform business blueprint is integrating forward into your client’s success. Here’s the section from the report.
Practice #1: Integrate Forward To Embed Services Into Your Customer’s World
No executive we interviewed raved about marketplaces or ecosystems or even network effects, but they all knew exactly which customer problem to solve with an embedded service. We call this strategy “integrating forward,” when a company becomes deeply engaged in its customers’ success. (We first learned this term in a book by Ralph Welborn and Sajan Pillai called Topple: The End of the Firm-Based Strategy and the Rise of New Models for Explosive Growth.) To integrate forward:
- Serve your customers one by one, and learn to love their problems. Fieldwork, not arm’s-length research, underpins this understanding. For example, the founders of Swift Shift, a platform for caregiver recruitment and scheduling, were so familiar with home care agency challenges that they won their first customer before writing any code.
- Next, learn suppliers’ problems, and solve them, too. Suppliers will try out new platforms that have plenty of customers, but they’ll defect to rivals just as readily, so platform businesses need to ensure adequate supply if they are to maintain their growth and, hence, make it easier for suppliers.
- Use insights to continually improve your services. With a digital connection to customers and suppliers, you will aggregate reams of data that hold powerful signals of success and failure. Armed with this data, you can learn and rapidly adapt to your customers’ needs.