Why a platform should always be open, flexible, and extensible to succeed in the market
Decoding the many definitions of platforms, industry leaders highlighted the key elements and factors determining the success of a platform and how some of the most successful businesses are building them.
Today, six of the top 10 companies by market capitalisation are platforms. And, if you look around, many aspects of the daily lives of consumers are dependent on platforms. From a business perspective, platforms have become integral to gaining a competitive edge. Today, it is becoming increasingly important for businesses to build platforms, not just because platforms present a powerful and pervasive business tool for value creation and capture but also simply because it has become essential to remain relevant in today’s digital era.
That’s why businesses are seen either building a platform, using a platform or wanting to build one. Today, it has become imperative to understand the definition of a platform, as well as the way some of the top businesses have built their platforms, because there are so many definitions and strategies floating in the market.
While in the commercial context, a platform is often referred to as ones like Atlassian Marketplace that connects producers and consumers, there are also platforms that are used internally within a company, noted Ashwin Srinivasan, Senior Engineering Manager,, setting the stage to understand what a platform is and the different kinds of the platform that exist. He shared, “One could look at a platform as anything that provides the ability to solve rather than solve the problem itself. It allows reusability and enables functionality not to have to be built from scratch each time.” He added that platforms also act as building blocks to build something bigger and greater.
At the roundtable on ‘What does it mean to build a platform?’ Ashwin was joined by Bansilal Haudakari, Senior Engineering Manager, PayPal; Chinmay Dargar, Senior Engineering Manager, Gojek Tech; Tushar Tayal, Senior Engineering Manager,; and Mannat Saini, Director of Engineering, . As the panellists deep-dived into the many definitions of platforms, a clear opinion was that platforms are the pathway to reimagine a business by going beyond automation, because of the tangible value that they are able to create.
Factors determining a platform’s success
Platforms inherently have a lifespan, pointed out Paypal’s Bansilal. Quoting the Harvard Business Review, he reiterated that the three key elements of any successful platform are connection, gravity, and flow. Elaborating on the connection aspect, he shared, “The ability to seamlessly connect the producers and consumers is very important and so is its ability to share and transmit. Gravity is how well you attract your consumers and producers of the platform. Flow is about how well the platform creates value.”
The other key elements that could determine a platform’s success are configurability, scalability, cost-effectiveness, and speed of execution noted the panellists. Swiggy’s Tushar highlighted, “While at the core consumer centricity is a critical factor determining the platform’s success, a platform’s ease of use is a critical factor to drive consumption or the usage of a platform and thereby its success.”
An interesting thought brought to the fore was the need to not just build a platform, but an experience platform. An experience platform translates into a platform that is capable of continuously generating value. “Experience platforms are open, flexible, seamlessly onboard any brands, and create a value,” said Bansilal.
And, building the foundation of an experience platform stands on four pillars. First is the strategy that determines the market projection, price points, and feedback loop. Second, analytics help to target the right market. Third, the infrastructure that helps to deliver sans any friction and build features in a quick turnaround time. Fourth is the architecture that supports different integration models. When a platform is built on these pillars, the platform will be able to maximise profit and reduce cost and also continue to deliver that specialised value from the platform.
Technical and architectural challenges of building a platform
As companies build platforms, they will invariably face challenges which differ depending on the stage of product evolution and the organisational structure of the business. For instance, the kind of challenges while building a platform is different for a high growth startup compared to a big enterprise. But, irrespective of the size of the startup or the stage of product evolution, silos tend to occur. More often than not, businesses will need to look keenly into aspects revolving around network topologies, traffic routing, data governance, personalisation, and authorisation, among other things.
Gojek’s Chinmay pointed out that at the core, organisations will have to answer two fundamental questions. The first is to make a decision on what to centralise and what needs to be kept distributed. Here, he opined that one could learn from the internet, which is the biggest platform yet, which takes a protocol approach, which fosters distributed autonomy but at the same time certain centralised policy definitions apply. The second question is what is open versus closed, inside versus outside as well as internally. There are two patterns here around gateways, packets, adapters, which help to contain and compartmentalise things and modify as you keep moving ahead.
Robust marketplace for the future of customer engagement
Today, marketplaces, which are among the most popular platforms, are becoming even more critical to businesses and consumers alike. They are also reshaping not just the market but also the very core of customer experience and engagement. Swiggy, being one of India’s most popular marketplaces in the foodtech sector, has leveraged the very nature of the platform to relook at customer experience.
Giving insights from Swiggy, Tushar shared, “When an organisation like Swiggy builds a new business like Swiggy Genie or Instamart on the same marketplace platform, it follows the philosophy of ‘build once and use across’. And, with it, we are able to tie together different points of experiences - from ordering to operations. From an end-user perspective, a loyalist on Swiggy is now able to discover more categories on the same platform. All of this helps to engage users in a meaningful way, by giving them a fluid experience right from ordering to delivery and post-order support.” This, he noted, was critical as experience drives conversion and conversion in turn drives revenue.
The Atlassian experience and beyond
Time and again, industry experience has shown how the ease of onboarding a platform, often termed as a frictionless entry in the industry lingo, is a key factor in determining the success of a platform. But, sometimes, as Ashwin pointed out, building and evolving a successful and resilient platform requires a company level mindset shift.
He shared how Atlassian, in its first decade, was a product company selling downloadable software. “We had big products like Jira, Confluence, Bamboo, among others. Each of these product teams was independent and this autonomy and single-minded product focus are what helped the company succeed. But, over time, especially as we started giving more prominence to our SaaS offerings, we have had to think of a common platform and components that are reusable across multiple products and use cases,” he shared. In addition to the internal motivations for building a platform, Atlassian is also heavily invested in evolving its platform to meet the needs of its third party ecosystem. Atlassian Marketplace, which has earned over $2 billion in lifetime revenue is itself a testament to the value of the extensibility of the company’s core products.
Citing another example, Ashwin shared how a lean team built a simple abstraction over CloudFormation in AWS over a few weeks and then started getting two or three services adopted, followed by continuously investing in more and more features. And this very thin layer on CloudFormation, which has gradually expanded to provide a thin abstraction over other AWS services, is today the internal platform for every single one of Atlassian's 10,000+ services. “The experience reiterates a very important principle that any complex system that works invariably starts off as a simple system that works and then evolves. An attempt to directly build a complex system is almost inevitably doomed to failure. So with platforms, it's very important to understand what the core value proposition is and what’s the simplest platform that will serve that core value proposition and start getting adopters on board and taking in the feedback,” he explained.