There are many different products and thousands of ways to build these products. In a technology-first environment, a platform is part of this process, whether it helps to build the product or is the product itself. What comes first in all this development: the platform or the product? PepsiCo Product Lead Deepika Yerragunta shares her ideas of building platforms as products and within frameworks to boost productivity and scale.
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On the Difference Between Building a Platform Model and Building a Product
What exactly is a platform business? Deepika lays out the differences between platform and product, and how the one complements the other when scaling a product.
“When we think about what a product is, a product by itself is a standalone piece of software that can function and add utility to somebody. It could be a piece of software or hardware or a combination of both. I’ve had the fortune to work in all these spaces. I worked on Alexa, which is probably the single largest product that combines all these into one. However, for achieving scale and building and powering these products, we want to build commonality in terms of the same components so that you can start building other products. Based on this, the guts of what a product is powered by is what I would call a platform. Building platforms and building products and services on top of that platforms gives a lot of power that we haven’t really seen before.
Most companies have started to understand this. Even when they start building simple products first, they might take some time to start with a simple product first and figure out the product market fit for it. Eventually, they want to build long-term sustainability for that particular product, and they want to add more and more features to it.
When you’re thinking about the developer community, you want to be able to add, allow them to be able to use reusable components. Think about what those services look like. These days, with the evolution of Amazon Web Services, you are able to think about scaling into the cloud and adding resources without too much incremental cost. Similarly, you’re able to add developers as you need to use the same components that you have already used for building a product.”
On What Comes First: the Platform or the Product?
Though she is of the mindset of technology-first, Deepika warns about the mistakes she made when building her business. It’s about testing your hypothesis, whether that is platform or product.
“If I go back to how somebody would build a platform, and I’m a big technology-first type f person, I learned my lessons the hard way. When I built my fashion company, it was a marketplace company. I really wanted to build a scalable platform. First, I focused a lot on technology. The hard lesson learned there was to test out your simplest hypothesis as quickly as possible, in the cheapest possible way, and figure out the product market fit for running your business. That’s the first step once you have that credibility built in.
I always say this, that when you think about performance, it always has to start with credibility. Credibility comes from building something and showing that it works. What that something is usually is should be a product in itself, and hopefully, you’re building it in a very clean possible way so that you don’t have to rewrite a bunch of code. Once you do that and enable to provide proof that indeed something works, now you’re able to use the components that you use to power that to extend those components to build something else.
Now you have the beginnings of building a platform.”
On the challenges of building platforms in the B2B sector
Deepika has quite a bit of experience in the B2B market, especially when she built a platform product for the fashion industry. Here she goes through three challenges that are especially for the B2B sector.
“When I think about the B2B space, I automatically think about large enterprise products that you’re building. If you’re a startup trying to get in, the credibility that you have is very low in terms of wanting to disrupt the space. How do you actually even enter? How do you get your first two enterprise customers to want to actually use your platform? That’s one of the biggest challenges.
The second is establishing a feedback loop. How do you actually develop products, then make sure that it’s consistent and you actually are developing something that’s useful for the users that you’re thinking about? The beauty of the B2B space is … most of the time the Pareto principle applies. Usually, 70% of your revenue is coming from the top 10, top 20, top 30 customers. Once you have those customers won, then you also have the strategic leadership in that space. The rest of the market follows us. This lesson I learned very early in my career when I worked at Intel, which influences the top 10 guys, and the rest of the market follows anywhere, so the long tail will eventually catch up. It’s easier to build for 10 customers, or 20 customers, or 30 customers, because you can get them all into a room and build a board of advisors, and get them together on a monthly basis. I did this repeatedly in my career and actually put in a very-low fidelity use cases in diagrams and wireframes. There are so many tools these days that you can use to test out your hypothesis and say, ‘Hey, this is what I heard from you, and this is what we develop as a solution. Are we on the right track, and would you pay for this?’
Once you start developing that trustful relationship with those customers, you’re also developing a brand equity or philosophy of design where you are making them part of the process, and hopefully, you are able to seek out beta customers because of that relationship. We’re able to capitalize it in the future, knowing that, as you become closer to the business, you’re able to observe and say, Oh, we could do this as well for you. Once somebody enters your ecosystem, you should make it hard for them to leave. Offer them things that they need anyway so that they’re doing something end to end in your own platform… .
I’m a big fan of opening up and building APIs, and publishing great documentation so that other folks can develop for your ecosystem is another great way to make it very, very sticky. There are lots of hurdles in the enterprise B2B space, but once you conquer it, I think there are lots of advantages as well. Enterprises do not go around switching applications from one to the other overnight. It takes four years, three years for them to actually say, ‘Oh, this is terrible, I’m leaving.’ So if I think the longest cyclist just win them over first, which takes probably nine months to a year, but once you’re in, you’re really in. Then your long-term strategic future looks really excellent in the enterprise world.”