Among the decacorns Salesforce, Slack, and Shopify the common denominator is that they successfully migrated from being a product to a platform company. Most iconic technology companies of our times began as product companies and evolved into platforms.
Product or Platform?
Sometimes there can be a little confusion while differentiating a product from a platform; let us settle this by negation. It is not a platform if:
- If it is easily replaceable with another product
- If other businesses can’t generate revenue by building on it
- If it’s part of an existing product
Slack a platform as it allows integrations with numerous services, and many products are built using it.
Digital Platforms: The Wormholes of Growth
The most spectacular growth stories of resilient growth are those of digital platforms. The reason is simple: products produce a single revenue stream, while platforms facilitate direct interaction among diverse users, as well as vendors, and create many more opportunities for creating revenue. Typically, there is a much more complex exchange of value between vendor and consumer.
Take examples: Salesforce’s core CRM evolved into a broader platform for enterprise applications, proving instrumental in it becoming the first SaaS decacorn.
Likewise, Amazon’s AI Echo speakers gained incredible smartness with the company’s decision to make Alexa and its Skills Kit available to third-party developers thus, creating a platform that would run on millions of devices performing voice interaction.
The Great Migration — From Product to Platform
Digital Platforms allow the complex creation of value and innovation. Here are a few compelling arguments that will encourage you to take the first step:
For detailed insights into each trend, read the blog.
