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Tuesday, 24 March 2009

A scorecard for building businesses on platforms

I came across an interesting article today that talks about how startups have to decide on which platforms to develop for, given the many open platforms available now and the scare resources that startups have.

“A lot of startups are wrestling with prioritizing their relatively scarce resources,” said Jim Hornthal, a partner at CMEA Capital and chairman of Triporati

This reminds me of an earlier post I wrote about the benefits of building your business on third party platforms.
From that post came a good comment by Taylor on the different factors that one needs to consider when deciding on which platform to develop for. This leads to my pondering on whether a scorecard can be useful to provide a first level analysis on what is/are the right platform/platforms for your business.

So, this my first attempt at such a scorecard:

Ease of development: How open is the platform? Does it have an open API? What does the API enabled? Do you need to pass through gatekeepers before getting the developer keys?

Demographics and audience size: How relevant are the users on the platform to your businesses? If not everyone, what proportion of the platform's user base is relevant? What size is that? Can the platform enable you to reach them efficiently?

Route to market: Can the platform provide a clear route to revenue? Is is a market or a platform? The latter such as App store provides more value than a platform like Facebook.

Flow of value between platforms: This is the most important strategic consideration. What value can you create when you enable flow to happen between 2 platforms?

(i) At the simplest level, the value can be uilitarian. TwitchBoard for example saves your Twitter links to your Delicious account.

(ii) Can you enable new ways of organising resources through enabling the flow? For example, Disqus is attempting to organise your conversations by aggregating your flow of comments while Zynga is organising your gaming social graph by enabling the flow of your game buddies on different network. What other stuff can you organise if you enable flow to happen?

This is just a first draft of my scorecard, which I hope to evolve into some sort of investment guide for startups that want to build businesses on platforms. Comments and feedback are definitely welcomed and encouraged.