An entrepreneur and I were discussing AWS, Facebook, iPhone, and Android today. Although I spend the vast majority of my time on startups, I am occasionally reminded of a big company job I once held.
At 16, I was hired at Microsoft to be a Technical Evangelist working in the Developer Relations Group (DRG). My job was to get up on stage at large developer events and talk about building software for Windows. It’s hard to imagine, but one of the key challenges the company faced was getting adoption.
Now just picture it—here’s this kid with aviator glasses and pimples standing in front of a group of 1,000 people talking about how to build apps. Not knowing any better, I’d get up and say stuff like, “If I can build programs for Windows, so can you!” and I’d get a laugh, every time.
Flying from city to city, setting up, getting on stage, walking through code samples, and talking with developers about all the cool apps they were building was a lot of fun. Of course, things didn’t always go as planned.
One of the most memorable moments was showing up at the hotel where an event was to take place only to find out there had been a huge mix up. The hall wasn’t paid for! One of the guys ended up putting the whole thing on his credit card.
Today, a lot of companies want to be successful platform companies. Few are.
Becoming a platform company is hard. It’s hard to start with a platform and have people build on top of it. It’s also hard to start out as an application and become a platform.
Amazon did it with AWS. Facebook did it, first with games, then with other apps. Apple did it with the Mac and then with the iPhone and iPad. Google did it with Android. Microsoft did it with Windows.
And then there are some newcomers, Dropbox and Twilio, to name two. There are many, many more, of course. But I’ve chosen these two because they are highly visible, gaining rapid adoption, and have big disruption potential.
Twilio, whose tag line is, “Build apps that communicate” is a platform. Twilio is a cloud communications company. With Twilio, there’s no need to code up a conferencing platform from scratch, learn Asterisk, or figure out some other PBX system. It’s all cloud based. You can do call tracking for lead generation, build a PBX, or add cool calling features to your web site. Lots of companies are using Twilio to power their communications apps including eBay, Airbnb, 37signals, and SurveyMonkey, among others.
Twilio is not an “app” company. They are a platform, they provide API’s, and other people build stuff on top of them, plain and simple.
Dropbox, of course, is a cloud service that lets you easily access your content. The company recently passed 45M users after just four years in business. Dropbox started out as an “app” company and is becoming a platform, via the Dropbox API. The Dropbox API provides access to all Dropbox capabilities, which means people can build cool add-ons, but they can also build complete applications that leverage Dropbox’s presence on the desktop, mobile, and in the cloud.
What makes great platform marketing?
- The developer conference
- Communication, documentation, and samples
- Promotion and distribution
Platform marketing revolves around The Event. The developer event is the great catalyst for activity inside the company—and outside. It is a date that cannot be moved. It must wow. It must impress. And above all else, it must deliver.
Developer Conferences are where a platform company announces new technologies, gives demos, and highlights partners who are doing leading edge work with the platform. The event gives the company a human face, gives the technology a voice, and enables real, live interaction. There’s nothing like it.
Complementing developer conferences are hackathons, user groups, and labs. Labs are where developers from other companies can come spend time building cool, leading edge apps on the platform. They have access to the technical team at the platform company, and breakthroughs happen in real-time.
Responsive communication. Hand in hand with Developer Conferences goes responsive communication. Responsiveness in online forums and on email, combined with real changes to the platform to address developer needs is a must. Big companies can get developer adoption without this. But ultimately those developers will not be platform advocates. They will adopt, but they won’t evangelize. And the best evangelism gets others evangelizing too.
Responsive Communication also requires great documentation and samples. If you want people to code on your platform, you need to give them clear, up to date examples and documentation on how to do that.
Promotion and distribution. Developers adopt a platform because the platform gives them access to new capabilities and because the platform provides distribution. Facebook is where people are—thus, reason to develop on Facebook. iPhones, iPads, and Android devices are everywhere—develop for those.
Successful platform companies help their partners by promoting them and facilitating their distribution. Partner showcases, highlighting at events, and quotes in press releases, blogs, and other marketing materials are all of huge help to platform partners.
Promotions significantly impact partners. One iPad app, on becoming the “App of the week” experienced sales 10 times what the company had had on the previous day.
The Platform Promise
Cloud and mobile platforms move fast. At least for cloud platforms, APIs can change day to day, hour to hour. That means partner innovation can move a lot faster. It also means partners and platform companies have to do a lot more work to keep up–docs, samples, and other information may be out of date before they’re even available.
Platform overload is a risk. Platforms that have been around for a long time suffer from bloat. There are too many API’s, too much documentation, too many ways to do things.
Platform availability. Finally, the platform has to stay up. When Amazon suffers an outage, when Twitter is temporarily unavailable, it’s not just users that are impacted–it’s a a huge number of partners that are relying on the platform.
And like Icarus, if you get too close to the sun, you’ll get burned. A few partners, notably Zynga, have been able to stay (enough) out of the path of the platforms on which they rely and become big. Many others, though, die an early death because they’re simply too close to the core.
As a good friend of mine said, for a platform to be successful, “Developers have to be sold on the promise that they can do something with the API that would be more difficult, or impossible, than if they did it themselves, and that the thing that those API’s do is actually worth doing.”
That’s why becoming a popular, widely-adopted platform that not only has evangelists but that others evangelize is a rare accomplishment indeed.
Startup CEO’s can learn a lot about how not to lead from Greek Prime Minister George Papandreou.
1. Don’t surprise your investors. Investors hate surprises. Especially when things are already bad. If you surprise them, you lose credibility. You break trust. You embarrass them and yourself. No one likes being embarrassed, especially not in a large, public forum.
2. In times of crisis, lead. Papandreou agreed he needed a bailout, agreed to take the bailout, and then decided to ask for a referendum. He was right in principle—he needed to get the people to buy in. But he went about it the wrong way.
Similarly, leaders of startups need to get their teams bought in. But people want leadership—especially in times of crisis. When startups face difficult decisions, they look to the leadership to make the right strategic call.
3. Don’t waffle. People don’t mind a pivot, especially if one is obviously needed. But they dislike waffling and uncertainty. Waffling causes a loss in confidence. Make a decision and then go for it.
4. Communicate your intentions. Papandreou failed to tell his Finance Minister he was going to ask for a referendum. Imagine not telling your team about a big decision you were going to announce. They would feel left out, be less likely to buy in, and feel blindsided.
5. If you desperately need money and someone offers it to you, take it. Not much more to say about that. When you need money, you need money.
Of course the moral of the story is, if you neglect to do these things, you’ll most likely lose your job.
Create scarcity. Get headlines. Make a billion.
There have been plenty of articles written questioning Groupon’s economics. The company has changed its accounting methods. It restated its revenue for 2010 from $713M down to $313M. The company lost $420 million last year and $117M in the first quarter of this year.
It’s not that the economics aren’t relevant or worth digging into. It’s simply that this deal is about mojo, not economics. People said the IPO would never happen. But it has happened.
Hot consumer deals are scarce, and the number of shares they make publicly available are even more scarce–Groupon floated just 5.5% of the company’s shares.
Back in June I wrote about why consumer companies are worth billions. I described the three M’s: Mass market, Monetization, and Main Street. Those three M’s can be summed up with just one: mojo.
Groupon has the three M’s. It’s applicable to hundreds of millions of consumers. When it comes to revenue, it’s one of the fastest growing companies ever. And nearly everyone has heard of it. It’s a household name.
Investors (through their funds) who have heretofore been unable to own the company–because it was private, now can. Hot, late stage consumer deals are scarce. The publicly available stock created by the small float caused even more scarcity. Add to that a CEO who not only runs a marketing machine but is one himself and you have incredible mojo, despite tons of negative press.
Deals with mojo raise money. They’ve got momentum, they’re well-marketed, and they’re scarce. Love ‘em or hate ‘em, it’s a great lesson in how to market, sell, and raise money.
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