SOMEONE ELSE’S PRODUCT IS A RISKY PLACE TO BUILD YOUR BUSINESS
Starting a business is hard. From product ideation to market fit to hiring to distribution, founders and leaders are inundated with choices, large and small, all critical to the success of the venture. In the rush to market, some choices that made sense in the short term become the fatal flaw that stunts growth, invites competition, or even brings the startup crashing down.
A great example of this: building a business on someone else’s platform. Ease-to-market? Perhaps. Long-term risk? Definitely. Platforms can, and frequently do, change or eliminate features. Or arbitrarily deciding to monetize previously free features (hello, Facebook!), in many cases straining or breaking profit margins. At best, these platform costs will evenly scale with your growth… but sadly this is not only the case (howdy, LinkedIn!)
Regardless of industry or type–be it a sales channel, a service business, a digital pure-play, or other–owning your platform is the smart investment in future growth.
1. Surfacing hidden complexity
The apparent expediency of building your business on top of other platforms is compelling. Services like Salesforce or Facebook work hard to communicate ease-of-adoption. And generally it can go smoothly, at least until you begin discovering limitations.
Then you start digging in. You discover a key feature doesn’t exist. The platform doesn’t support certain types of businesses or business models. Solutions that worked well early don’t scale as you grow. In essence, your business doesn’t fit the platform’s one-size-fits-all feature set. How to proceed? Customize. Invest time and resources to tailor the service to meet your needs, increasing your dependence.
2. Introducing Long-term Risk
In the last 12 months, we’ve seen the demise of Google+, goo.gl, Inbox by Gmail, Allo, Local… and those are just Google products. Enterprises built on these services were forced to either pivot… or go extinct. In the meantime, sales were lost. Unexpected costs multiplied. In the case of Google+, thought leaders watched their hard-built social presence dissolve into nothing.
3. Increasing on-going costs
One of the hidden costs of using these platforms is not hidden at all. Salesforce represents an ongoing, permanent operational expense that can hamstring cash flow. Think you’ll grow out of the cost? Think again: the most common Salesforce subscription tier is $100 /month per user, meaning your hard-earned growth comes with ever increasing business costs.