Can you be an app & platform? Perils of pivoting.

Published: 11/08/2012

There is a lot of buzz in the blogosphere about app companies changing direction and becoming platform companies. This means that the company started life out building a mobile app that was directly marketed to consumers. They will have to continue to support their mobile app because, well… they have to. Then one day their execs decided that the only way to stay in business was to let other companies use their system to do similar apps. Not just similar apps, but normally exactly the same app.

A lot of mobile payment and loyalty companies are making this move. Some may call it "openness" while others call it sheer madness.

The difficulty for a developer looking to use their platform is that they are an app company selling to other app companies. Can you see the conflict of interest here? They are having the developer make a choice to compete against their original app. And all this from a company that, at one time, was trying to persuade consumers to download and use their app. If you cannot build a solid company with your app, nobody is going to build their apps on your platform either.

The reason is that your company is volatile and doesn't know what it wants to be when it grows up.

By moving away from being an app company the company is signaling to the world of consumers, retailers, and mobile app developers that there was no way for them to succeed with their technology, so they are looking to create cookie-cut reproductions of their poorly-performing mobile app.

This makes no sense. Why would an app developer build on a platform that was unable to build a business for the original app company? They are setting other app companies up for failure using the same recipe they used.

To provide some comparison, SubtleData was built from the ground up to be a platform company. We don't market mobile apps to consumers. We simply focus on integrating our platform with the leading Point of Sale providers. We have since day one.

Tags: platform   loyalty   reproductions  


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