Welcome to the Heroik Hour, the podcast where we discuss and bring together Technology Leadership and Culture to help you fired up and mission ready for life. I’m your host, Nicholas McGill, Chief Experience Officer for Heroik Media. Thank you so much for joining us on episode 14.
This may be the best and most important episode of the Heroik Hour so far.
This is a double barrel episode which means I have twice as much content to cover because it’s that awesome and I believe it’s worth taking the extra time to make it meatier and give you, my loyal listeners more high protein content and no fluff. I didn’t want to split this up into parts, because I wanted to make sure you walk away with usable strategies and tactics, with your eyes open and head on a swivel, mission ready for life.
In this episode I’m going to deep dive into platform business models, and talk about the 10 perils of platforms and 11 survival strategies to address them.
Managing and running a business is hard work -In fact, it’s so difficult that 9 of every 10 businesses in the United States fails after just 18 months of operations. And only 4 in 100 businesses lives to see their 10th anniversary.
One thing is certain – one of the major contributors to business failures is bad decision making when it comes to your engagement strategy on the platforms. Platforms are the linchpins of business these days. They make up a majority of your capabilities, tools, resources and networks. If you have no strategy to game and win on the platforms that give you the tools, networks, and all the platforms you’re using, you are destined to lose, to get gamed, and to suffer needlessly.
And if you’re running an established big business, and think this platform talk doesn’t apply to you guess again. Harvard Business Review just released an article saying 3-5 year strategic plans are dead because they are simply failing to be useful or relevant. The academic elitists and best managers of our days are claiming that strategic planning is now impossible due to the pace of change.
I believe something different is going on. And it’s funny to me how people give up when the problems get hard, and they call them impossible to feel better about themselves and save their jobs. The reality is, strategic thinking is more viable than ever, it’s just all these supposed masters and captains of industry don’t understand the strange newly transformed landscape. Their lens on business has taken them this far, but they don’t understand why they can’t have an adaptive practice. And one aspect of that all comes back to platforms.
Most companies don’t recognize how dependent they are on these platforms, or how they influence the decisions and behaviors around technology, leadership, and culture. As you know, TLC is Heroik’s bread and butter, and as an experience designer, consultant, and guide, my job is to help organizations develop a lens so they can continue to grow and succeed in this new world.
The reality is – there is no amount of buzz words and BS that will help guide the paradigm shift that will help leaders and managers see the landscape in the new adaptive lens. They need a new way of thinking, a new adaptive lens to navigate the global business landscape. And lucky for you, I’m sharing a bit of the Heroik lens with you- free of charge, and I encourage you to pass it on.
So, if you want to be mission ready for life, and live to see your 11th business birthday – then listen up.
On every journey, no matter where you’re at, you’re going to end up using platform models to help you grow. Platforms make up a majority of the business models, tools, apps, and networks (digital and face to face), that organizations large and small completely depend on every single day.
And here’s the focus question I want you to think about.
Given that most businesses don’t make it past 18 months, do you think the most successful platforms we use everyday are designed to enable and help the 10% of businesses that are going to win or even have the 4% of the 10 year Heroik thrivalists in mind? Or do you think it’s far more likely, that they are designed and optimized for the wayward behavior 90+ percent of businesses who are just going to throw money at every problem and seek half ass easy buttons?
It’s a no brainer right?
Don’t buy the hype – Here’s the takeaway and key insight that you need to lead off with and understand. It is the rule of the concrete jungle – A majority platforms are designed to feast on the 90+% of the businesses destined for failure. Their prescriptions as to how you should behave and operate, if you follow them to the letter, are most often designed to maximize their profit and growth NOT YOURS.
And if you’re not smart, if you’re not tenacious, gritty, discerning and Heroik, you will be their next meal.
But if you learn to understand them, see them for what they are, for their nature, you can wield them to your advantage and their dismay. You can learn how to hopscotch your way through growth across platforms, networks, and tools and preserve your digital liquidity throughout the process. But first, you need to understand what platforms are.
What are platform business models? What are platforms?
A platform is an organization based on enabling value-creating interactions between multiple parties, usually producers and consumers. A platform sets the stage for the audience and performer to come together. The platform model, is so common these days, that it is essential technology and model to study in and of itself.
Just about every mobile app, social network, event, festival, conference, relies on building a platform and helping it grow. Platforms are at the epicenter and core of the new, global gig economy.
At their best, platform businesses increase our reach, capabilities, and connections. At their worst, they consume all of our resources and attention for negative gains. And in the gray area in between that most people don’t pay attention to, platforms are the default desktop and workspaces of our lives, and they have a profound influence on our attitudes, beliefs, perspectives, and thus culture, behavior, actions, and results.
There are several articles on Get Heroik that talk more about the influence these platforms have on you and your company, and you can find them in the show notes for this episode at GetHeroik.com.
Let me walk you through a few examples to help you understand what a platform is and how it works.
Facebook is a platform for social exchange. In return for bringing large masses of people to focus their attention in the same spot, they make tons of money charging others to advertise to the people on the network.
Amazon is a platform for buyers and sellers of just about everything these days.
Anywhere you’ve got a middleman creating an environment for different groups to come together and create value, you have a platform.
Face to face business networks are also platforms. They try to bring diverse groups of professionals together in the spirit of facilitating productive business relationships.
All of the email and CRM services are platforms – and most of them try their damnedest to own your database so WATCH OUT!
In fact, Everything as a service – is a platform. Software as a service Hardware and so on. Just about every modern business involves or directly connects to a platform model.
A casino is a platform. They bring gamblers and entertainers together create the opportunity for entertainment and spending money. And you know who the real winner is of that platform right? The house always wins.
You’re probably familiar with all of these forms of platforms – but here’s an idea that you might find new and interesting
YOU are a platform.
Anyone who wants to be an authority, thought leader, influencers, personal brands, are all platforms. You create value by connecting ideas, curating resources, goods, people to each other, through the lens of your actions and words. You may give information to the right people, or put valuable goods from entity A into the hands of customer X.
This isn’t talked about that much because – when you get right down to it, the platform leaders of previous times, are finding themselves in competition with others for the spotlight – and you are on that list.
Here are The 10 Perils of Platforms – these will help you understand their true nature in a way that doesn’t get talked about.
- Platform plays are always business models – one way or another, if not for money, then power and influence. They make money by wielding control, influence and reach over a certain crowd. They call it facilitating transactions, I’m calling it what it is in terms of what you should know as a platform user. Even if it is a non-profit, they are not designed nor do they operate to chiefly benefit everyone involved.
- As I already mentioned 8/10 businesses are destined to fail. Platform business models are designed in a way that relies on large, growing number of users/members in order to scale and profit. So by default, t right out of the gate, in order to scale and profit, they are prone to position 100% of the business population not the technology, leadership and culture of the 20% who make it past 18 months. So they tend to offer features that support popular business ideas, favoring what is trendy over what is effective. And if you paid attention to the stats, the wisdom of the crowds in terms of success is not in favor of popular ideas. What becomes trendy and viral these days is usually overhyped and not at all validated or back modeled. This is at Heroik, we dig deeper and get serious about finding strategies, tech, leadership and culture that actually work.
So, most platforms often rely on big numbers and thus must target to serve everyone – and that means supporting and encouraging some really stupid ideas or unsustainable engagements to attract the confident wantrepreneurs who think they know what they’re doing.
Bottom line – most Platforms are optimized to be a numbers game hustle, that are optimized to prey on and exploit or derive the most profit from people beyond the value they deliver, to take advantage of people who aren’t wicked smart and Heroik.
I know. I know. No one has ever described a platform as a dangerous thing or even commented on the dark side of how they work and succeed. But to survive and thrive, to be mission ready, you need to know that not every new business trend is designed to truly empower you, or spit out butterflies, rainbows and pots of gold.
- Many platforms create crowded markets for service providers that lead to highly competitive and commoditizing arms races, that in turn lead to price wars, which ultimately lead to cost cutting, that chips away at the quality of the product. And this happens not in years or months, but sometimes a matter of days or hours in a turbulent race to the bottom.
- Platforms are not just about technology or opening doors to new customers. The platforms you use have a profound impact on your culture. They influence the behavior and attitudes and strategic thinking of your business and if you’re not careful you’ll be allowing the platforms to define your culture and that is usually a losing proposition- because platforms are designed to feed whatever notion is popular not necessarily what is effective or in alignment with your mission, vision and goals or success criteria.
- Most platforms incorporate bad social metrics to drive your engagement. These social metrics are fundamentally, rigged and corrupt, and they are perpetuated as a way to get you the user and member addicted to engaging the platform and competing in the popularity contest. Likes, Followers, Connections, are all claimed to represent social capital right? They’re supposed to be KPI’s Key Performance Indicators of your level of connection, reach, relationships, and influence right? Wrong. Every single social metric patently fails to represent or even perform as a fair indicator of your influence or social capital. They’re simply designed to keep you participating. They’re easy to game and manipulate, and as an experience designer, a guy who helps build these things, to you my loyal listeners, I’m telling you to use it but not fall for it.
- We live and work in an attention economy. And you directly and indirectly compete for the attention of the same customers that other platforms do, and this creates an inherent conflict. So you may find yourself in this modern conundrum. On the one hand, you’re using platforms to help connect you to new customers, on the other hand, you may also be propping up platforms that ultimately hinder your ability to succeed.
For starters, you may find yourself in a power struggle to own the relationship, the connection and context of the conversation with the prospective customers. Platforms and the platform model absolutely depends on being part of the conversation between two people. At the same time, this very nature makes them a distracting, cock-blocking third wheel.
- Another little wrinkle that no one mentions, when they are lost in their worship of platforms, is that the services you may offer on the platform today, may be such a great idea that they are offered by the platform itself tomorrow and all your efforts that encouraged and attracted customers to the platform now work against you in cases like these.
The app or feature offered in the app you develop gets cloned by the platform provider and offered as a default or loss leader, effectively putting you out of business.
The chamber of commerce loves your innovation lab, accelerator, hacker lab, and wants to start it’s own. Then yet another bank also wants in on the innovative fun and they too create their own, saturating the market, fragmenting the community they claim to serve.
My point isn’t to discourage you from doing business or building a great app. On the contrary, I want you to walk into the concrete jungle with your eyes wide open, mission ready for life, mission ready to succeed and thrive no matter what shitty games or conditions are thrown your way.
- Here’s another fun platform fact. In order to grow, many platforms are rigged to benefit one part of the transaction over the other, buyers over sellers, premium members over worker bees usually. You need to know how the platforms you use are weighted so you know how to respond in a way to make them serve you.
99Designs is a good example of this kind of play. They favor the buyer side by creating contests that require designers to do a lot of up front work. The designers in turn adapt and use generic templates and a shotgun approach to submitting a lot of generic designs. The result, the buyer has to choose from 100 crappy designs and overpay for the generic one of their choice, and the designers resell any new iterations developed as generic templates which in turn further commoditize the graphic design industry. It’s a cruel system.
Platforms are everywhere – They are everywhere, and all the other supposed gurus and thought leaders who spew out buzz words and bubble talk, worship the platform plays. But are they really good for you or is it just the next overhyped, high fructose corn syrup of business buzz?
- Here’s another dark side of platforms – many of them rely on churn as an asset. For example, business networks rely on churn, regularly adding and losing members. The new members have a high level of trust and faith that honest participation, volunteerism, and engagement as prescribed will produce a suitable return on their investment, but the informed and educated members have figured out what is really going on – they’ve just paid Tom Sawyer to whitewash the fence. They don’t get the returns they were promised, it didn’t work as advertised, so they leave.
Most platforms claim that they connect you with a valuable transaction but usually end up creating a price war among competitors, lowering the quality of the products and services, and creating a lose-lose for buyers and sellers. So you need to be mindful as you navigate platforms.
My point here is that when it comes to platforms: USE IT BUT DON’T FALL FOR IT.
- Beware the specialized industry platforms, especially on the software side. These are often the slowest platforms to adapt to change. And if your setup doesn’t adapt to change quick you lose the advantage of being nimble and lean. This is why Fortune 500s and Harvard Business Review are talking about abandoning 3-5 year strategies because of they don’t know how to respond to the pace of change, and they can’t escape their clunky outdated platforms. Don’t fall for this thinking – it’s the platforms stupid. Be mindful of when you trade nimbleness for specialization
So those are 10 perils of platforms that no one talks about. And now we’ll shift gears to discuss how to survive and even thrive on a platform.
- You need a plan for any platform you’re considering using before you invest in it. I don’t care if it’s just you a small biz or a budding empire. You need to take the time to strategically think about the specific actions you will take and tactics you’ll deploy to ensure you win. You need to make domination and winning your game.
If you enter a marketplace, group, network just to be another voice in the crowd and expect to win, you are crazy. Study the landscape, know your strengths and unapologetically play to them.
- You need a litmus test, a lens to evaluate a potential platform you’re considering or are already currently using. The litmus test must be based on a reasonable, realistic outcome and use. It cannot bank on you reaping all the features and benefits of the platform as advertised.
You will only use a certain number, usually a very small number of the features on whatever platform you’re considering. So look at the price tag, and ignore the features that you won’t use. Then evaluate if the features and benefits that you absolutely know you will use are worth the price. It doesn’t matter how cool the other tools or features are. The best toys you have are the ones you play with – the others don’t count for much.
You need to look for the extreme low limit outcome – that is the realistic outcome – Pro-tip a Realistic outcome is usually 1-10% of the advertised outcome. Let me put it this way, if you invested in platform x for a year and pulled one lead or one business deal would it be worth it? That’s a proper, hardcore, thrivalist business litmus test for a platform. If the advertisements and salesmen are asking you to pull 1 deal out your first year, the real experience may be 1/10th at best, and may take 10 years to create a return. Is the deal still worth it then?
If you’re wondering why I use such an extremely low return, it’s because platform promises are notorious for being extremely full of shit, and the risk is that they can in fact, put you out of business. So I don’t screw around when vetting platforms for my practice or my clients either.
- You also need to assess the TRUE cost of success on the platform, including all of the resources, the time, energy and attention required to make it work, and the impact of deferring those resources from other things.
The cost of making an engagement on any platform very successful for your business is much higher than just the cost of the platform, and implementation alone.
In fact when you measure all the TEA required to pour into just about any platform ecosystem to a successful level, the number of platforms you can really risk investing is is a hell of a lot lower than what you think, and it’s way lower than what the industry people, marketers and sales people are telling you. YOU NEED TO KNOW THE TRUE COST OF SUCCESS – NOT THE LOWEST COST OF LOWEST LEVEL OF PARTICIPATION.
- As a sound adaptive strategy, you should seek to preserve and measure your digital liquidity on any platform you’re working with. By that I mean to assess, the amount of control and freedom you have to move any digital assets without a great hindrance to you or loss in value. This is a Heroik concept and one that my team and I can help you figure out, so reach out to me for a cup of clarity session and let’s talk about what’s going on in your platform strategy.
- You need to figure out a way to preserve the assets you create, build, cultivate or curate on the platform. This includes the relationships, connections, contact information, database, copywriting, and visual assets created. Because of all the TEA you’re pouring into winning on any platform, to make the most of your work, you’ll want to upcycle any content and contribution you create on one platform and re-use or carry it over to other platforms to maximize your effectiveness across multiple platforms.
The best way to do this is to focus on the most feature rich, demanding platform, and then apply the assets that make sense for the lesser platforms.
- You need to inoculate and protect your organization from the cultural overreach and influence of any platform you may use, or be considering. This is yet another reason to formally document your culture, your purpose, mission, vision, values and valued behaviors. You should create at least five value statements and 10 valued behavior definitions to ensure you have an independent compass that won’t be misaligned or skewed by the tools that you use.
Culture trumps strategy especially in times of high-speed and high volatility. A robust culture can get you out of trouble and keep you in a nimble and adaptive position come what may. This is why every episode I talk about bringing together TLC, technology leadership and culture.
- Sell things to the most engaged users on the platforms. Just because you’re a service provider doesn’t mean you should only shop on a platform for target customers. On many platforms, there are more of your peers and competitors on a platform than there are prospective customers. The most engaged users are often the service providers. They’re the primary consumers of content, drinking up their own hype and propping up the engagement numbers that the platform runners are advertising as if there’s a big commotion or collection of potential customers and deals to be made.
And a good way to win in these situations is to go in as the trojan horse and contrarian, and bring in the counter-platform, find tips and guides and develop products to sell to the most active users. If you can find a way on a platform, sell to both sides of the transaction. If you’re a smart service provider and thought leader, you can be selling solutions to your target market and your peers.
- If you want a more genuine and sincere human experience with a platform, look for people-centric platforms that are small but growing.
They don’t grow as fast because they don’t weigh transactional relationships, or use BS social stats. Look for platforms that offer 5-star feedback with peer review, that have a clear shared purpose and transparent design principles behind them.
- You’re always better off having a habit of drawing people back to the little corner of the web you control and own – your website
- If you’re going to be a user on a platform – you should aim to be the best, the power user, the rock star guest in the hotel, that’s how you succeed. To do that, offer something great. It’s true that you may be commoditizing a great product if the platform is competitive, but it’s better to offer some
great meaty content than some cynical, spiteful third rate hack job.
People screw up the math here, and often want to keep their best nuggets and lures and freebies on their web presence. The truth is – whatever goes up on the platform, either way it will reflect on you and your brand.
It’s far better to have great content all over the place with even meatier links and lures back to better content. This is a tough lesson to learn and people ignore it because it means doing even a better job and creating more content and being more than a one-trick pony when it comes to product offerings.
If you’re all out of ideas after one guest post – you aren’t ready for prime time . I know you feel like you’re working hard but you need to make crumbs cupcakes to lead back to all your cakes. There’s a lot more baking to do than the minimum advertised. That’s the difference between success and participation.
- Judge a platform based on its operational integrity.
Every platform, business and person, makes a laundry list of promises and agreements. They promise to deliver value, quality of service and integrity right? The reality is, you need to go in with your eyes open and realize how many of them fail to be consistent between their promises, and their designs, their operations and practices : you need to measure the consistency between their words and deeds. This is what operational integrity is – consistency in the brand promise, value proposition and the experience. It is consistency in word and deed. And this is a major part of being Heroik.
That’s all the time I’ve got for today, this has been the Longest Heroik Hour yet, I hope it found you well, I hope you will be more mindful and feel empowered for listening to this podcast. Please do me a favor and leave me a review on iTunes, or send me feedback at getheroik.com and share this podcast with a friend. Alright- time for the jam session – let’s get the blood pumping again.
Hidden Track After Party <—Normally I leave this part out of the show notes, but I left it in because a) I felt it was that important, and b) to indeed confirm that there is a hidden track after party with freebies and giveaways in almost every episode.
I wanted to give a bonus tip today and share this – the best platforms and social networks, are the ones that are transitioning from small to big, that’s when the growth and benefits are the largest, and the competition is fairly limited. The best platforms are the ones on the move, from tiny unknowns to amazing knowns. You see platforms go through phases, and you want to get them when they’re ripe, when they require a minimal amount of effort for a significant reward and positive returns. They can slingshot you forward and elevate you through, before the mass of the herd arrives.
A good platform, an ethical platform, designed to foster and strengthen a sincere, professional and authentic community, is truly created, operated, and focused on adding value to both sides of the platform beyond bringing them together. It’s not enough to bring to sides of a deal together, you must facilitate greater value in order to make up for the potential for bullshit, shenanigans, and gamesmanship.
A good platform will elevate and distinguish you or your brand. It increases your visibility, reputation, reach, and authority. Remember back in 2006 when LinkedIn and others used to talk about this? It’s a different world now, ain’t it?
5 Star Feedback and peer review – these are better indicators that are at least a sliver or degree harder to game than the likes, followers, connection drivel.
If you’re looking for a peer group, or network, look for non solicitious platforms that offer exclusivity. Good platforms who care about the growth of their actual users will protect the ecosystem from commoditizing. One way to do this is to limit competition. Look for community platforms that offer exclusivity.