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Two arguments for avoiding platforms

In an earlier post, Who were we?, I wrote about our struggle to identify ourself as a platform company or a product company. Since I wrote that post I have been talking with two different persons who gave great arguments for when you want to stay away from the temptation of building platforms.

When I think of platforms, I think of industries like the automobile, mobile phone or medical industry. Big industries that has started to consolidate and where economy of scale is more and more important. I realise that this is an attractive route to go but before you do, consider these two arguments.

There is no return of investment

The first person works at Electrolux’s division for food preservation, i.e. fridges. He said that although they are looking at the benefits of developing their fridges based on platforms, there are questions to whether it will give good return on investment. I did not realise how segmented the fridge industry is and how different parts of the world want their fridges to look very different. Introducing platforms would mean heavy investments to rebuild their factories for seemingly no benefit to the customers.

Time to market is the most important thing

The second person works at Spotify. He was making the argument that sometimes the market window is not big enough for building platforms. Seizing the market opportunity is the most important thing and then you do not want to be caught in building platforms. To illustrate his point he said:

The platform is what is left behind when the train leaves the station.

I do not know if he coined this expression himself or if he have heard it somewhere but nevertheless it illustrate the point perfectly. If you are not careful your business opportunity might be lost if you are not fast enough.

Do you have any more good examples when platforms should be the focus?