The Power of Platforms

Of all the recent trends in online computing, the one most game-changing is the trend toward developing platforms and allowing users to build applications on top of them. The greatest example of a platform on the web is Facebook, which started as a simple social network, but by opening up to third party apps, has become the most important web development since Google. Platforms allow downstream developers to wield the entire power of the “parent” to create interesting and valuable applications without requiring massive resources to lay the groundwork for the basic functionality.

The reason platforms are so important is that they allow developers to use massive technological leverage. To illustrate this point, lets use the example of Dropbox, an outstanding online backup application. Dropbox creates a folder on a user’s computer where they can drag files, and then stores those files on Amazon’s S3. S3 is a network that programmers can easily use to store files on Amazon’s servers. By simply paying a low fee per-gigabyte of disk space used, developers have access to an unlimited amount of secure, redundant disk space online on top of which they can build their own program. Dropbox is a derivative application built on top of the S3 platform, and utilizes the S3 backend to intelligently sync and back up files on individual PCs. Without S3, Dropbox and others would have to invest enormous resources into creating and maintaining a huge storage datacenter, which would almost certainly be prohibitive for the rapidly-growing startup. However, since they are able to leverage the S3 platform to handle the storage issue, the developers are able to focus on the product instead of the nitty gritty needed to get that product running.

The ability to abstract away the “nitty gritty” by using a platform is immensely powerful, because it allows entrepreneurs to build on top of existing technologies instead of reinventing the wheel for each venture. Facebook applications have been incredibly successful because they allow a developer to leverage the existing networks people have already built, rather than fighting to get people to sign up for a new website and build a new network. Before Facebook Photos, several sites attempted the tagging functionality that Facebook mastered with virtually no success because there was no way of enrolling every user that might be in someone’s photo. Since Facebook already has a huge portion of internet users, Photos (and other apps) can simply abstract away the “building a network” aspect — a huge obstacle to building a networking application — and focus on creating new and interesting functionality.

The other cool aspect that platform creators get “for free” is marketing. If a developer creates an application on Facebook, they are likely to spend time and money marketing that application. However, since that app is nothing without Facebook, any marketing that the app developer does is by default marketing for Facebook as well. While its not always this obvious, it’s always the case that the platform benefits as the child application grows — as Dropbox gains users, for example, Amazon naturally gets more business without really needing to do any extra marketing. It’s all done for them, and all owed to their killer platform.

Platforms are an amazing innovation, and we’ve seen (and will continue to see) some incredible applications arise from them. They lower the barrier to entry for entrepreneurs, so programs that used to require a team of engineers to handle “support” aspects of an application now only need one or two core developers. As a result, more products can come into the market quickly, and great ideas can rise to the top even more freely.