Platform Vs Services / Products

Before I move into explaining the various processes behind user acquisition strategy on a platform, I figured we need to first understand what is a platform.

Seeding users on a platform is probably the most critical step, so it becomes really important to understand the fundamental of platforms. Of course, there are variety of platforms.

Your phone is a type of platform and so is the operating system you are using. But the type of platform we are discussing is the like of Facebook, Amazon, Google : a software platform that allows the user the freedom to use how they want it and obviously help them make more money than the platform itself. Note, I didn’t mention Apple here because Apple mostly sells products and services.

My definition of a platform: A network that allows target users to build upon and allows the user to benefit economically more than the network itself per user, within the network.

By this definition anyone else with an app or website that provides a definite service or product are just services or products and not a platform. For example : Apple; as apple sells a definite product. You don’t necessarily make any money out of it, though one could argue I-phones can take videos and people make money off it, it’s not within the ecosystem or network.

Once you take this approach to understand the platform, it might be easier to tackle the classic “chicken and egg problem” with the various services and products you are trying to sell. You need merchants for the consumers to adopt and you need consumers for the merchants to adopt.

Some of you might think, I will just offer a cheaper service. Making your service cheaper doesn’t do you any good in longterm. On the contrary, ends up hurting the entire industry as some of the cash loaded startups have been using promotions to attract users. Merchants will be more likely pissed than anyone else.

As your services and products end up hurting more merchants, has any one scaled a river rowing against the flow. Doesn’t make sense right? But many startups are right now are burning investors money trying to row their boat opposite.

To get out of this mess : you need a platform strategy. A well thought out user seeding strategy for a platform which not only saves you wasting energy trying to row your boat against the flow but speed you up since you will be flowing with the flow.

Stay tuned for the next post for more on user acquisition strategies.

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