Product or platform?

More and more we see software products that can be categorized as platforms. There are many examples from big tech companies such as:

  • Google, which with two products (Search and AdWords) created a platform connecting people who search information on internet to people who want to advertise things on internet.
  • Facebook, that started as a platform in which friends found each other and exchanged information, and then became a platform in which advertisers can talk to people through ads and fan pages.
  • LinkedIn, a platform for professionals, companies and, most recently, advertisers.
  • Apple, that connect software developers with iPhone, iPad and Macs with their AppStore. Another Apple platform is iTunes, connecting media producers with people interested in music, films, series, and books.
  • Amazon Kindle, a platform that allows publishing houses or authors to publish books for people interested in these contents.

By the way, some of those companies have more than one single platform such as Google, Apple and Amazon.

Besides those big technology companies, there are also the most recent examples:

  • Uber, connecting drivers to people who need transportation.
  • Airbnb, that connects owners of properties for short-period rental to people who want to rent properties in such conditions.
  • Bitcoin, a digital asset and payment system. The more user it has and more companies take Bitcoin as payment, the better.

There are also examples of platforms that are not necessarily based in technology, like shopping malls, which places stores, restaurants and movie theatres next to people who want to buy, eat and have fun.

What are platforms?

Platforms are systems that get more valuable as more people use them.

In other words, they are systems strongly based in the concept of network effect. Network effect is the effect by which a given software is more valuable when more users use the software.

There are two types of platforms:

  • Single-side platforms: are those that, the more users they get, the better. Using an old example, the FAX machine. It was not worth having one if only one person would use it; the more people using it, the better. The same is valid for social network (Facebook, Twitter, etc.).
  • Cross-side or multi-side platforms: those in which are necessary two or more different group of people that use the platform in distinct ways and that benefit from this different way that each groups uses it. This type can be divided in three categories. Technologic platform, in which the platform is the operational system and, on one side we have the user and, on the other, we have operational system developers (Linux, Windows and Android). Exchange platform, gathers buyers and sellers (eBay, Uber and Airbnb). Content platform, the content is the focus and monetization usually takes place through ads (Google, Facebook and news portals).

The following is an example of a technologic platform with 5 sides:

It is important not to confuse the concept of platform in the product context with the concept of technical or computer platform. A computer platform is any computer environment where software applications are going to run at. In the product context, as we defined previously, we name it as a product platform when there are gain to users the more users are using the product.

In my next post I’ll talk about software product management.

Product Management: Delight your customers with your software

In 2015 I wrote a book on Software Product Management in Portuguese. In the beginning of 2016, Paulo Caroli talked to me about how he enjoyed the book and how this book could be useful to people in the software industry not only in Brazil but anywhere in the world. For this reason, we decided to create an English version of my book.

The book is organized in 5 sections:

  • Definitions and requirements
  • Life cycle of a software product
  • Relationship with other areas
  • Product portfolio management
  • Where to use software product management

This book is suitable for anyone working with software. Even companies that do not have software as its core business use software in their day to day and often have developed some software that interfaces with its customers such as a website or a mobile application. It is important for these companies to understand the software product management role and responsibilities, so they can better manage this software and increase its chances of success.

We are working on the translation but as we progress we are already releasing the content. If you want to see the work in progress, please visit the book page at LeanPub. Still in beta but already with valuable content. Feedback is always welcome!

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