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A Summary of

The platform paradox

by
Eric Paley
Founder Collective
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Founders often focus on building platforms rather than products because they hear that VCs like to back platforms. This is a mistake. They should instead start by solving a problem and become a platform only once they’ve become the standard in solving that problem.

The Difference Between a Platform and a Product

  • Products are tools or services that you have exclusive ownership of.
  • Platforms allow others to build products and generate revenue by taking a cut of proceeds. Costs tend to scale in proportion to their use.

Humor VCs When They Bring Up Platforms

  • There's nothing wrong with describing what your company will become
  • Make sure they know that you’re going to start by solving a real problem for customers, and that hopefully can become a platform over time

Don’t Trust Me—Study Bezos, Zuckerberg, and Jobs

  • Most platforms in the startup world emerge as the byproduct of a successful product solution
  • Amazon’s AWS, Facebook, and iOS are great examples of this
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