> Lesson: Start with selling a Product not a Platform
Good advice. People rarely want a platform, especially from a new entrant. They want an aspirin tablet.
Once they are hooked you can expand.
Good advice. People rarely want a platform, especially from a new entrant. They want an aspirin tablet.
Once they are hooked you can expand.
A sticky platform will be stickier than a sticky product. But that doesn't mean every product should be made into a platform.
FB started by “selling” access to the freshman* picture book. They only became a platform later.
* hopefully a less sexist term is used these days.
They used to just be an app, and now they have an ecosystem of products (Whatsapp, Instagram, etc.). I wasn't referring to the fact that they also run an advertiser-facing platform at all. I was just pointing out that they started as a single product and have expanded to being a larger platform, with all the network effects/benefits that such growth entails. That's great for them, at that stage.
But it doesn't make sense for all earlier stage products to try to become platforms. To me, the VC was showing a not-uncommon tendency to swing for the fences (or rather, to suggest that an undiversified startup founder should do so).
VCs incentives may not be aligned with your incentives. They are looking for Unicorns (Decacorns? Centocorns?) and are prepared to have _you_ take on a high risk of failing to improve their 1:100 successful investment upside calculations. You building a comfortable 8 figure revenue and 7 figure profit company over 5 or 10 years is basically a failure in their eyes.
For every Facebook or AWS, there are a 100,000 profitable "product companies" and probably a million successful-enough "lifestyle businesses".
If you want to take on the risk and shoot for the stars, sure - follow that VC advice. If you'd personally be happy with an 8 figure exit or a high six figure salary for as long as you want it, you can reduce your risk of failure substantially by _not_ following that advise to the letter.
Except Facebook started as a product.