Building Platforms Not Products

Today’s most successful software companies have made the leap from selling products, to selling a platform. The appeal of such a move is understandable, since products generate only a single revenue stream, while platforms - by connecting different groups of users and services - can generate many.

Your product’s APIs provide a first step towards building a platform, by allowing developers and partners to do business with you more easily. But a platform strategy requires more than an API - gone are the days of simply expecting customers to build their own integrations. Customers expect your platform to work with the products and services in their ecosystem seamlessly. Integration options must be a productized part of your product experience, and in this session we'll cover how to deliver embedded integration capabilities along with examples of best practice in the market today.

Transcript

1. Cloud Elements 2017 - Confidential & Proprietary Build Platforms, Not Products Using 4 Superpowers of the Network Economy
2. Cloud Elements 2017 - Confidential & Proprietary MEET THE Eric Prugh Co-Founder and COO PactSafe @eprugh Ross Garrett Head of Product Marketing Cloud Elements @gssor SPEAKERS
3. Cloud Elements 2017 - Confidential & Proprietary “ Marc Andreessen, Wall Street Journal August 2011 SOFTWARE IS EATING THE WORLD https://www.wsj.com/articles/SB10001424053111903480904576512250915629460
4. Cloud Elements 2017 - Confidential & Proprietary PROLIFERATION OF PUBLIC APIs 757% . Increase in Web APIs January 2010 - January 2016
5. YOUR API IS NOT ENOUGH There aren’t enough developers on the planet to consume all the APIs available today. Integration needs to be made easier. BE A PLATFORM.
6. Cloud Elements 2017 - Confidential & Proprietary DEFINING A PLATFORM In construction, a platform is something that lifts you up and on which others can stand. The same is true in business. By building a digital platform, other businesses can easily connect their business with yours, build products and services on top of it, and co-create value. “
7. Cloud Elements 2017 - Confidential & Proprietary PLATFORMS OFFER GREATER UTILITY CREATING AN INTEGRATION FABRIC THAT ENABLES USERS DEMOCRATIZING INTEGRATION AND MAKING IT ACCESSIBLE
8. Cloud Elements 2017 - Confidential & Proprietary MULTI-SIDED BUSINESS MODEL A platform company enables other businesses to build products on their technology Uses 3rd party integration to create adhesion and relevance across their market domain While also delivering service directly from their core product offering 1 2 3
9. Cloud Elements 2017 - Confidential & Proprietary Platform Examples
10. Cloud Elements 2017 - Confidential & Proprietary SOMETHING INTERESTING IS HAPPENING... “Uber, the world’s largest taxi company, owns no vehicles. Facebook, the world’s most popular media owner, creates no content. Alibaba, the most valuable retailer, has no inventory. And Airbnb, the world’s largest accommodation provider, owns no real estate.” https://techcrunch.com/2015/03/03/in-the-age-of-disintermediation-the-battle-is-all-for-the-customer-interface/
11. Cloud Elements 2017 - Confidential & Proprietary
12. Cloud Elements 2017 - Confidential & Proprietary
13. Cloud Elements 2017 - Confidential & Proprietary
14. Cloud Elements 2017 - Confidential & Proprietary
15. Cloud Elements 2017 - Confidential & Proprietary
16. Cloud Elements 2017 - Confidential & Proprietary
17. Cloud Elements 2017 - Confidential & Proprietary The Network Effect Introducing the 4 Superheros
18. Cloud Elements 2017 - Confidential & Proprietary PLATFORMS = THE NETWORK ECONOMY Network effects are the phenomenon whereby goods or services becomes more valuable when more people use them, so there is a relentless focus on building as large a network as possible.
19. Cloud Elements 2017 - Confidential & Proprietary NETWORK ECONOMY 4 SUPERHEROES OF THE MAGNETIC INFINITE REAL-TIME INTIMATE
20. Cloud Elements 2017 - Confidential & Proprietary MAGNETIC Networked companies are able to detect, organize, and expose very small units of value. Their competitive advantage is to deal efficiently with billions of small transactions and to capture value created outside their walls.
21. Cloud Elements 2017 - Confidential & Proprietary HOW IT WORKS MAGNETIC: STANDARD ECONOMY NETWORK ECONOMY Companies take raw materials in input and produce finished products that are sold to consumers. Companies identify & abstract value - as small as it is - and redistribute it to consumers and producers while taking a cut.
22. Cloud Elements 2017 - Confidential & Proprietary USE OTHER’S APIs TO BENEFIT FROM EXTERNALLY-CREATED VALUE IFTTT offers a unique service allowing users to create recipes (trigger + action) between 200+ services. 15M of these triggers are realized everyday. IFTTT has raised more than $38M to date. All the value captured and distributed by IFTTT comes from API integrations. “
23. Cloud Elements 2017 - Confidential & Proprietary INFINITE Networked companies use highly scalable software and services to achieve near zero cost delivery. They can grow indefinitely in revenue with minimal impact on costs. Their competitive advantage is speed of scale and profitability.
24. Cloud Elements 2017 - Confidential & Proprietary HOW IT WORKS INFINITE: STANDARD ECONOMY NETWORK ECONOMY Companies see growth is constrained by their production capacity and by the marginal cost of production. Companies can serve additional customers at virtually no additional cost, giving them an infinite growth opportunity.
25. Cloud Elements 2017 - Confidential & Proprietary USE OTHER’S API TO BECOME SCALABLE AND BENEFIT FROM LOW MARGINAL COSTS Implementing Stripe’s API allows business to adopt a powerful and scalable payment method where they handle the responsibility of storing cards, processing subscriptions, billing clients, offering coupons, or anything related to payments. A secure way to accept payments form nearly any country in the world, on any channel at a very low marginal cost. “
26. Cloud Elements 2017 - Confidential & Proprietary REAL-TIME Networked companies use real-time data feedback to instantly optimize market fit and improve products’ value. Their competitive advantage is first mover time-to-market.
27. Cloud Elements 2017 - Confidential & Proprietary HOW IT WORKS REAL-TIME: STANDARD ECONOMY NETWORK ECONOMY Companies produce and publish products to the market every other year. They don’t have information about their product usage for months. Companies produce and perpetually improve products through iterative development. They closely monitor the usage to answer user needs in real-time.
28. Cloud Elements 2017 - Confidential & Proprietary USE OTHERS API TO UNDERSTAND AND ADAPT TO THE MARKET IN REAL-TIME Through its APIs, Google Analytics lets businesses understand their customer’s journey across channels. Through a comprehensive set of dashboards, businesses can track their performance and adapt their strategy in real-time to improve their reach or increase their conversion rates. For examples, GA improved National Geographic's CTRs by 21% for content promotions. “
29. Cloud Elements 2017 - Confidential & Proprietary INTIMATE Networked companies use customer knowledge to fine-tune and personalize the experiences they deliver to each customer. Their competitive advantage is customer engagement and loyalty.
30. Cloud Elements 2017 - Confidential & Proprietary HOW IT WORKS INTIMATE: STANDARD ECONOMY NETWORK ECONOMY Companies produce and sell an identical product to all their customers, regardless of channel or segment. Companies offer tailored products and customization possibilities to each of their customers, creating an intimate and long-lasting experience.
31. Cloud Elements 2017 - Confidential & Proprietary MANAGE API EXPERIENCES FOR DIFFERENT CONSTITUENCIES The API development team learned quickly that a “one-size-fits-all” approach to API integration wasn’t going to work. The team found that different client applications (such as a desktop browser, a mobile application or a smart television) required different functionality as they accessed the Netflix API. They introduced an API experience, or mediation, layer on top of their existing API platform that allowed each UI team and even partners to optimize the API experience for their specific app or device. “
32. Cloud Elements 2017 - Confidential & Proprietary Creating the Network Effect
33. Cloud Elements 2017 - Confidential & Proprietary THERE IS NO FUTURE OF HERMETICALLY SEALED CLOSED SYSTEMS IN THE NETWORK ECONOMY. EVERY TIME A CLOSED SYSTEM OPENS, IT BEGINS TO INTERACT MORE DIRECTLY WITH OTHER EXISTING SYSTEMS, AND THEREFORE ACQUIRES THE VALUE OF THOSE SYSTEMS. “ Kevin Kelly, Wired Co-Founder
34. Cloud Elements 2017 - Confidential & Proprietary IN A NETWORKED WORLD, [THE THREE MOST DESIRABLE THINGS ARE] CONNECTIONS “ CONNECTIONS CONNECTIONS BREAKING SMART, Marc Andreessen & Venkatesh Rao
35. Cloud Elements 2017 - Confidential & Proprietary APIs offer an easy way for companies to establish these essential connections. APIs enable any business to connect to other businesses in order to give each other access to information, customers, or products. CONNECTIONS ARE EASY, INTEGRATIONS ARE HARD
36. Cloud Elements 2017 - Confidential & Proprietary 8 Ways Defined on how to start and run a successful platform business, explaining ways to identify prime markets and monetize networks
37. Cloud Elements 2017 - Confidential & Proprietary FLEXIBILITY This allows a multitude of companies to leverage the platform for their (often very different) use cases, opening the door to a much wider market segment. It also allows the provider to re-use the platform for their own benefit.
38. Cloud Elements 2017 - Confidential & Proprietary FLEXIBILITY Adapting to user needs 1 2 3 Enabling new types of integration users But it’s more than technology
39. Cloud Elements 2017 - Confidential & Proprietary LONGEVITY Platforms are often deeply integrated into the infrastructure of businesses. Integration requires a greater commitment up front, but platforms are sticky. This, added to the flexibility, means that businesses can generally stick around and adapt the platform to their needs over time.
40. Cloud Elements 2017 - Confidential & Proprietary LONGEVITY Longevity doesn’t mean be static 1 2 Think about how to deliver ongoing value Ensure integration changes with the times 3
41. Cloud Elements 2017 - Confidential & Proprietary In many cases, the value of a platform is directly proportional to the number of people who use said platform. Integration is the foundation of how people are brought to, and stay with the platform. INTEGRATION
42. Cloud Elements 2017 - Confidential & Proprietary INTEGRATION The power of the crowd 1 2 Make it easy to do business with you Platforms aren’t just for developers 3
43. Cloud Elements 2017 - Confidential & Proprietary WHY ARE PLATFORMS SO ATTRACTIVE? For the platform provider, there is one key reward in offering a platform over a traditional product...
44. Cloud Elements 2017 - Confidential & Proprietary GROWTH CLASSIC GROWTH NETWORK GROWTH T Network GROWTH OPPORTUNITY REWARD IS GROWTH
45. Cloud Elements 2017 - Confidential & Proprietary QUESTIONS FOR THE SPEAKERS Eric Prugh Co-Founder and COO PactSafe @eprugh Ross Garrett Head of Product Marketing Cloud Elements @gssor CREDIT : FABERNOVEL, GAFAnomics, October 2014 - https://www.slideshare.net/faberNovel/gafanomics/2-2_This_work_was_made