Companies Need Platforms

In the current market, the most important thing that a company must be able to do is react rapidly to the marketplace. It is not important to always be exactly right about what the customer wants. But it is important to understand clearly the arena you are playing in and to build a technology platform that will allow you to address as much area in that playing field as possible as quickly as possible.

Having a strong platform is key to being able to react to the market as conditions change. The only way to do this is to develop core technology and an organizational DNA that can quickly deliver what the market wants, even when what the market wants is unexpected.

In considering how to deliver such a platform, I am reminded of an old saying I used to have, which is that you can't hang an anvil on a christmas tree. In essence, this means that you must build a foundation that is strong enough to handle the eventual anvils that the marketplace will insist you hang on your product. Now to be clear, your platform will never be strong enough to handle all of the things the market will ultimately demand of you. You will always be in a position of shoring up your core infrastructure to handle the unanticipated twists and turns of the marketplace. But the better your core infrastructure is, the better off you are.

By way of example, I consider Amazon vs eBay to be the prototypical case study. Amazon understands that the key to their company is having a platform that they can hang anything on, and that is exactly what they have built with Amazon Web Services and other internal, highly leveraged technologies like Dynamo. Their platform will be key in ways that they can predicted and in ways that they can't.

As far as I can tell, eBay has no such flexible technology platform, and so when the market complains about their product, they are flat footed. They can't quickly respond to the product demands of their customers. Of course I am not familiar with eBay's internal development, but the fact that they are so slow to respond to the demands of the market suggests strongly that they do not have a flexible system that allows them to iterate and make rapid adjustments based on feedback -- otherwise they would have done it. To me this will bad for eBay's long-term health as it attempts to compete with Amazon.

So how might one apply this insight to one's own business?

When you are thinking about building a product or service, at some point you should consider how to build your internal process in such a way that it answers a broader question than the specific immediate product mission you are trying to tackle. I believe the best way to handle this is two internal development teams. This should break roughly down to the platform team and the product team.

Ultimately, in a platform/product split, the platform team's customer is the product team. But the platform team works on the foundation, based on the broad directives of corporate leadership. The platform developers are focused on performance, and some broader mission that should be set by company leadership. The needs of the product team obviously must drive the work of the platform team, but by decoupling these layers of development, you actually increase the ability of the company to respond rapidly because, when done properly, the platform team is building things that will satisfy current and future needs of the product team, but in more leverageable ways than the urgent product team would have done it.

This strategy is a bit like Seven Habits of Highly Effective People applied to an organization. In Seven Habits, Steve Covey talks about four quadrants in a two by two grid with urgent and not-urgent on one axis and important and not important on the other axis. Without the separation of platform vs product, you are always working on urgent and important. The platform/product split allows for a focus on what is important but not urgent, which is the quadrant you are likely to gain most business value from.

In any case there is no magic in this. A misguided platform effort still leaves a company unable to respond to the demands of the marketplace. But properly determining how to split the tasks of platform vs product and therefore urgent vs important can be incredibly valuable towards building an organization that can iterate rapidly. Rapid iteration is ultimately critical to being perceived by customers as responsive and by the marketplace as superior, and a strong platform can be key in achieving that iterative velocity.