I’ve spent the last two and a half years of my life developing an online product only to stop and ask myself if this really is a product? It looks like a product, feels like a product, smells like a product, yet people are buying ready-rolled solutions built on the “product”.
The product in question is a collaborative spreadsheet-like database. People can roll their own datasets and share them around and get priced according to people and data usage. All good, except we never made it clear what the pricing was up front. What we ended up doing was giving people what they wanted, which was a ready-rolled solution.
Let’s build a product
The story goes like this. Someone has a problem, they look for a solution to the problem. You fix it, they are happy, you get paid, you are happy. Each time we work with someone we tweak things a it to give them a customised experience and this just adds to the non-product experience. The client gets their solution, they don’t really care about your product. In fact if they did, they would have been shopping around for something and comparing similar offerings, comparing features and prices.
The truth is they weren’t shopping around for a collaborative database solution. They wanted a decent solution provider and they wanted the solution at a palatable price. They also wanted something that just works.
Busy people need solutions
Moreover, the clients we serve typically belong to large organisations and need a solution quickly. This is where the standard product pricing strategy starts to fall apart. They just want something that will at least cost less than it would for them to do it themselves. They also want something significantly better and delivered quicker than they could do it themselves.
This is just the way people are. If you feel you can make the same thing yourself, you will probably have a go, just for the satisfaction of having done it yourself and it’s often referred to as Not Invented Here Syndrome.
Is it a platform? Is it a product?
Well, what’s gone wrong here. Nothing really, just the discovery that platforms are very powerful ways of creating growth. You control the information gateway and connect people together, even when it’s a carefully controlled deployment of the type that the information security zealots at corporates rightfully demand.
Once clients are with you, sheer inertia will often prevent them going elsewhere so you can continue to control how they get data in and out. As long as the cost to them of moving and is more than what you charge them, they’re unlikely to stray. And it’s quite likely that the difference in cost of staying is less, so unless there are other political machinations, no one is going very far too soon.
Platforms need a hook to get things on board
So why don’t we all just build platforms? The reality is you need a hook. Nobody wants to use their imagination to figure out how your platform could work for them. They want a drill to make a hole, not a rotary motor to which you can attach a drill bit. That’s why showing them a drill, but one you can make cheaply because you’ve made several similar power tools before, is a way to win business. Black & Decker [citation] discovered this many years ago. The Power of Product Platforms by Alvin P. Leonard and Marc H. Meyer.
A platform is a stronger hook
Building a good product is great. You get to build something that has the ability to reach and engage with the many. Building a platform is also rewarding as you get to reach perhaps slightly fewer, but you do get to fulfil people’s needs. Of the two the platform has the stronger hook and, you would hope, stronger revenue potential into the future.