While I take the argument that being an infrastructure player rather than a traditional 'make something people want' business is a good idea in the long term, I disagree with the advice that it's a good idea for a new startup to try to be doing this from day one. That's suicide.
It's worth noting that none of the companies that are 'infrastructure' players today started out that way.
Amazon sold books, and needed to buy lots of servers to do it. The cash from book sales justified buying servers, which some time later allowed them to spin off EC2.
Apple sold personal computers and music players. Eventually they owned such a dominant position in music players that they could build a compelling online music store. Later they sold lots of phones, and used THAT position to justify the app store.
Facebook were, if anything, anti-platform. The original Facebook was for a single university. Later a few. Only some time later did they even allow anyone to sign up, and later still (by the time they were well on the road to being the dominant social network worldwide) did they roll out a 'platform'.
This is why the Internet platforms of today aren't like railroads of old. As a founder you absolutely should NOT be trying to raise lots of money to build infrastructure from day one. You should raise it to build a product that kicks ass that people will buy. That's hard enough for most if us.
If you get your startup to that stage then the platform opportunities that you can use to consolidate your position should be pretty obvious.
Don't get me wrong, dreams of platforms are what get entrepreneurs out of bed in the morning. They're important for that reason, but you're crazy to put it in your buisness plan. Keep it simple - build something people WANT.
While I take the argument that being an infrastructure player rather than a traditional 'make something people want' business is a good idea in the long term, I disagree with the advice that it's a good idea for a new startup to try to be doing this from day one. That's suicide.
It's worth noting that none of the companies that are 'infrastructure' players today started out that way.
Amazon sold books, and needed to buy lots of servers to do it. The cash from book sales justified buying servers, which some time later allowed them to spin off EC2.
Apple sold personal computers and music players. Eventually they owned such a dominant position in music players that they could build a compelling online music store. Later they sold lots of phones, and used THAT position to justify the app store.
Facebook were, if anything, anti-platform. The original Facebook was for a single university. Later a few. Only some time later did they even allow anyone to sign up, and later still (by the time they were well on the road to being the dominant social network worldwide) did they roll out a 'platform'.
This is why the Internet platforms of today aren't like railroads of old. As a founder you absolutely should NOT be trying to raise lots of money to build infrastructure from day one. You should raise it to build a product that kicks ass that people will buy. That's hard enough for most if us.
If you get your startup to that stage then the platform opportunities that you can use to consolidate your position should be pretty obvious.
Don't get me wrong, dreams of platforms are what get entrepreneurs out of bed in the morning. They're important for that reason, but you're crazy to put it in your buisness plan. Keep it simple - build something people WANT.
Sent from my iPhone