Platform Plays (8VC)

Summary

• Over the past 15 years the consumer space has consolidated around Google, Facebook, Apple, and Amazon.§1
• Most enterprise IT businesses still rely on linear-growth, relationship-driven sales and payment-for-product models, owning workflows rather than data.§1
• A platform's benefits must be transformative: a minimum of several hours saved per week per user, or gross margin improvement of 15% or greater.§2
• Proprietary data that is user-generated and owned by the platform is becoming a pre-requisite to a defensible business.§2
• Network effects make the value of a platform grow with the number of users, as with Ebay, Microsoft Office and Visa.§2
• Signs of an app rather than a platform include sales-driven leadership, ingesting only public data and reliance on technology over strategy.§3

Key insights

1. Defensibility in the enterprise requires building data platforms like those that won in the consumer space.§1
2. Platforms should become an essential part of a user's daily workflow that cannot be easily replaced.§2
3. Engagement metrics such as visits per user or time spent per week are the best way to track platform success.§2
4. LinkedIn encourages users to publish content that cannot otherwise be found online, which pulls other professionals onto the platform.§2
5. Successful platforms require long-term product and data vision that sales organizations are not well suited to deliver.§3
6. Pulling in data anyone can extract via public APIs is not defensible over the long term.§3