Not Everyone Can Be A Platform

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I had the chance to attend the Hardware Innovations Workshop a few weeks back. It was both an eye opening and inspiring experience, reminding me that when I started Contour nine years ago, none of this community existed. The resources available now are unreal, enabling makers to bring new products to market faster and with less risk.

Despite all of this I left the event concerned.

I probably listened to six or seven companies and although each of them had a different focus there was a theme that didn’t change. Every one of them wanted to be a platform.

Now I understand why they want to be a platform. If you really can get lots of people building on top of you, it does make your businesses more defensible.

If we take Marc Andreesen’s definition, “A platform is a system that can be programmed and therefore customized by outside developers — users — and in that way, adapted to countless needs and niches that the platform’s original developers could not have possibly contemplated, much less had time to accommodate,” it is clear that several of the companies are trying to develop this.

If we step back and compare the phone market only two platforms have survived. One that makes money and one that has mass volume. Could you imagine if every phone company was saying, hey we’re going to build an API so you can build on top of us? Oh yeah, Microsoft is trying that without much luck.

Fast forward to the maker revolution, “platform” is the word of the day. Indiegogo is trying to court hardware startups away from Kickstarter as the funding platform of choice. SparkCore and Pinoccio are trying to catch-up and differentiate from Electric Imp, as the connected platform. Boards are in a ninja fight as everyone is trying to upset Arduino and it’s beautiful design, while makers are using competitive matrices to understand the difference between Rasberry Pi, CubieBoard, Gooseberry, APC Rock, OlinuXino, and Hackberry A10.

Don’t get me wrong, having so many options makes the hardware ecosystem stronger. But, and this is a big but, only a few will become real platforms. And in order to do this they need scale and customer mindshare. Even scarier, having the better product doesn’t mean success. Often first wins.

If I was trying to create a hardware platform I would be asking myself three questions.

1. Are there enough makers?
Slowing of 3D printers is concerning and although the tools are getting cheaper you will always be constrained by the number of creative people who can actually make great products. If the world is short on creators, you will need to get almost all of them to make a sustainable platform.

2. How will you differentiate?
Arduino’s promise and offering is unique. They recognize their focus on design and customer experience is their differentiator. For every other brand how will you stand out from the crowd? Just saying we have an API and a community won’t be enough.

3. How can you maintain your margins?
Consumers are used to prices coming down over time, especially components. Even reading the comments on Electric Imp you can see how people are expecting the parts to be cheaper and although makers are enthusiasts, price matters. Maintaining healthy margins so you can create a sustainable businesses is a concern.

The race is definitely on and only a few companies will win. Grabbing customer mind share, creating a differentiated brand experience, and being properly capitalized are must haves to being the platform of choice.

Image Credit: US Nave Employee via Creative Commons.

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