Now 6 months into being a VC I figured it was time to create my own term. Platformation.
So what is Platformation?
Platformation is a period of time and a phenomenon in which products that weren’t initially intended to be platforms undergo a transformation into a platform. It can also include high potential new platforms emerging at incredible rates of speed.
Companies undergoing Platformation hit an inflection point of rapid growth in adoption rates and scale that pushes other, unrelated companies to start building on top of their products. Meanwhile, consumers start to adopt the newfound products of value that are being built on top of them.
While some products are built to be platforms from the beginning, others just reach such a massive scale that they create new business opportunities. It’s the companies/products/services who were part of, and experienced, a different ERA of platformation that have had an immense impact on our lives.
Examples include popularization of the internet (1990s), email (1990s), eCommerce/Amazon (1990s), Google (1998), Facebook (2004), the iPhone (2007), and more. These life changing technologies have all essentially created new industries where large, thriving companies have been able to service or build off of their platforms.
True Platformation results in the shake-up of various industries, but also leads to new industries and concepts being born with great potential. As a VC, I think a lot about what types of companies can take advantage of this new wave of Platformation and here’s where I see it occurring most:
The Sharing Economy: Companies like Uber and AirBnB have achieved such scale that they’re undergoing Platformation. Although they may not have foreseen this occurring, Platformation is popping up now as entrepreneurs look to serve the best interests of both the supply and demand sides, while taking advantage of such scale.
Some examples include:
SherpaShare: A company which helps on-demand workers organize their income, expenses, manage time, mileage and more all in one place (full disclosure: Corigin Ventures invested in SherpaShare)
BeyondPricing: A service which helps you automatically price your AirBnB
Podium Labs: Creating taxi TV for Uber and Lyft drivers. The company helps drivers generate additional income, while improving the rider experience.
Smart Locks: Smart lock companies are finding AirBnB owners to be quite the target market as they look to make the key transferring process more seamless
Virtual and Augmented Reality: VR and AR are platforms by nature. Although companies are starting to build for them, they haven’t experienced enough mass adoption on the consumer side to create massive companies…yet.
Aside from the Oculus conversation, there are some well-funded startups attacking various industries leveraging AR and VR technology including Magic Leap, Next VR, VR Global and AltSpace. It’ll be interesting to see whether these companies can grow fast enough for investors to capture their desired IRR, but either way I’m excited about the space’s potential.
I can see entertainment, education and healthcare all being impacted greatly and assume that various marketplaces and service companies will be created for them. If you have one of them, I’d love to speak with you.
Online and Mobile Marketplaces: A beautiful buzzword in the world of VC. Marketplaces.
Online marketplaces are becoming more fragmented and niche focused. Today, with so many people leveraging multiple marketplaces on a full-time basis, you can easily envision third party logistics companies, online marketing firms, small batch manufacturers and others looking to take advantage of the market to make people’s lives on those platforms much easier. [Alfred?]
Some marketplaces, such as Etsy, can impede on Platformation by doing a great job of building powerful tools into their products. We tend to like these companies as we believe it aids in retention and growth. With that said, no company can (or should) create every possible feature at a high level. So as companies pop up looking to serve marketplaces like Etsy and HourlyNerd, I’m always interested in taking a look.
Examples of Companies Popping Up to Serve the Marketplace Workers:
Matter — Quick turnaround, hassle free small batch manufacturing that leverages technology to streamline the design process. Great for people on Etsy, but wonder how Etsy’s new product will compare.
Pakible — a YC company that makes it dead simple for businesses to design, ship packaging
Quiet Logistics — Not for low volume people on marketplaces, but super cool to check out nonetheless as they use robots for fulfillment. They’re a multi-channel fulfillment provider of choice for premium fashion and apparel brands and e-tailers.
IoT: I read an interesting piece by Chris McCann over at Greylock a few weeks ago which I think you should check out hereso I won’t dive too deep into the IoT. However, the smart home, smart cities and smart retail are a few of my favorite categories. I think a lot about what IoT devices will actually have a true impact on our lives vs. what’s just nice to have, and would love to hear what readers’ opinions. The space is clearly heating up as you can tell from Chris’ landscape in the article.
Examples of Marketplaces with Strong Tools for the Supply Side:
Stylisted: Stylisted is a website and mobile application that allows women to book in-home hair styling and makeup appointments from a network of vetted freelance beauty professionals. Aside from it being a portfolio company, I included Stylisted because Julia and Lauren have created some great tools for stylists to build and manage their careers. (Full Disclosure: Stylisted is a Corigin Ventures portfolio company)
Compass: Compass is a tech enabled real estate brokerage that’s able to attract top talent because of some incredible internal tools that assist in creating more productive agents. I consider them a marketplace because they’re connecting buyers and sellers with real estate agents. Additionally, they’re a good example of a company that could experience additional Platformation; one in which service providers (e.g. moving, financing, etc) look to partner with them because of the great bump in business they’d receive from lead generation. (Full Disclosure: Compass is a Corigin Ventures portfolio company, but I have no knowledge of this potential Platformation)
Steve Jobs knew the iPhone was going to be a platform for something greater. It may seem like there is an app for everything now, but I still believe that there is some more innovation to be squeezed out of mobile devices. Aside from the fact that startups can attack new markets with insanely high growth rates of smart phone penetration, entrepreneurs are still coming up with new mobile first ideas every day. Mobile commerce, mobile advertising and the unbundling of generalist content sites/apps into vertically focused mobile-first media brands are all interesting to me.
Companies that I see high potential in include:
Bullseye: A Social Chat App for Stocks
BriefMe: A mobile news ranking app that shows you what the world is reading now
Spring: The best way to go shopping on your phone
Deeplink: The largest mobile deep linking platform for iOS and Android that recently released appwords, a mobile search and ad platform that uses keywords to trigger relevant content between one app and another. (Full Disclosure: Deeplink is a Corigin Ventures portfolio company)
Finally we have the blockchain. The potential use cases for blockchain technology has VCs drooling everywhere. Bitcoin itself has already started to go through Platformation with companies popping up for bitcoin payroll and ATMs, but the consensus seems to be that the blockchain Platformation and impact will be exponentially greater. We shall see.
Just like any post, I want to hear your thoughts. What new platform or company undergoing Platformation excites you the most? Am I missing any? Comment with your thoughts or tweet me @BoatShuman.
Thanks for reading.