"Platforms" aren't just for developers: Accelerate your startup by empowering others

This idea now feels so obvious to me that I almost didn't bother to write it down. But I keep having conversations with entrepreneurs who aren't yet using the pattern and their eyes always light up when they see a way to apply it to their own business, so if this post turns on the lights for just one young company out there it will have been worth it.

"Platforms" are familiar to anyone in the tech business - the companies that find a way to build the dominant platform tend to reap monopoly-scale economic rewards by enabling - and skimming profits from - the collective work of their developer ecosystem, e.g.

• Microsoft + Windows
• Facebook + Facebook Developer Services
• Amazon + AWS
• Google + App Engine
• Salesforce + Force.com

Technology platforms are so powerful because they eliminate huge amounts of hard and unglamorous work - what Jeff Bezos famously refers to as "muck" - letting developers focus on the sexy and differentiating bits of their apps. If the platform is effective at this, developers generally don't mind paying "rent" (in one form or another) to the platform owner for dealing with the muck.

But "platforms" aren't just for developers. In fact, there are dozens of successful "platform" companies across a wide array of industries that take away muck and make good money doing it:

• Fast food: McDonald's Corporate + McDonald's Franchisees
• Cosmetics: Avon + "Avon Ladies"
• Media: About.com + About Guides
• Retail: eBay + Power Sellers
• Etc.

In this broader view, a "platform" is any opt-in system that:

• Makes individual contributors / entrepreneurs more successful
• By removing common operational obstacles and sources of friction
• And - in some cases - creating / aggregating market demand for the entrepreneur's goods or services

The best platforms are accretive, meaning the total value of the platform to all contributors (and the platform owner) is increased by every incremental entrepreneur that chooses to participate.

As an entrepreneur and early-stage investor I absolutely love companies with a platform angle - even if it's not the primary focus of the business. Individuals and small teams can create amazing amounts of value, and *any* system that honestly seeks to makes life easier for passionate individual entrepreneurs to chase their vision and realize their dreams is nothing but goodness in my book.  A few examples I'm super-excited about right now - some for developers and some not - include:

• iPhone / iTouch / iPad + App Store
• Apple gets credit for blowing up the entire mobile software ecosystem and making it possible for developer-entrepreneurs to create, distribute and monetize their creativity.

• Android + Android Market
• Modeled on Apple's success, but with much greater global potential due to the open + free distribution model for the OS

• Etsy + Artists / Craftspeople
• Etsy takes away the muck of distribution, discovery, order handling and payment processing for some of the most brilliant artists and craftspeople in the world.

Unsurprisingly, you'll see this pattern at work in several of our Founder's Co-op portfolio companies as well:

• Urban Airship + mobile developers 
• Push messaging and in-app transactions are "mucky" enough on iPhone or Android - running these services across multiple platforms is the nightmare Urban Airship takes away for 2,000+ (and counting) smartphone developers, including some of the biggest names in the business.

• Nearlyweds! + invitation designers
• Every modern bride needs a wedding website to keep guests informed about the big day, but brides that care about design want their website to match their wedding colors and invitation design. Nearlyweds makes it easy for any wedding designer to offer (and charge for) wedding websites that match their custom design.

• AppStoreHQ + mobile developers
• With over 150,000 iPhone apps now available in the App Store and 30,000 more Android apps on offer in Android Market, getting your app found is way harder than building it. AppStoreHQ is the most-visited independent app discovery platform on the web (and also powers app search on a long list of app review blogs). Thousands of app developers now use AppStoreHQ to promote their apps in search results both on and off the site.

• LookStat + digital photographers
• The global transition from traditional stock to microstock has been hugely painful for professional photographers. LookStat helps take away some of that pain by automating the submission of large stock catalogs across the leading microstock sites, and providing sales analytics to help photographers know where they're making money and what to shoot more of to boost yields.

If you're building a web software business and haven't yet considered how your product might be used as a platform to help others succeed, take a minute and do the thought experiment - you just might unlock a powerful accelerant for your own success along the way.

Is there already a "vulture fund" that will reboot failed old media brands for the iPad?

I'm not yet sure what to make of the iPad, and have been asking my journalist, developer, marketer and investor friends what they think of the device to try to get my head wrapped around it. The thesis that keeps popping into my head looks something like this:

• The iPad is designed to be the world's best media consumption device... 
• Most people I talk to don't view it as a mobile device at all.
• The consensus is that most people will buy the WiFi only version and leave it on their coffee table as an alternative to reading magazines or watching TV.

• ...but most of the currently-dominant media factories will fail to create relevant experiences for this medium...
• The iPad excels at "internet-like" non-linear media - with tight integration of video, audio, community participation and 3rd-party sources.
• Traditional media companies + brands (think Conde Nast, News Corp, etc.) don't have the content production or software talent needed to pull these off well.

• ...leaving room for upstart media brands to take the lead...
• Across the digital media spectrum there are blogs, aggregators, and community sites that have the core skills required to manufacture compelling content for the iPad.
• Most of these firms also have lean cost structures, so they can act aggressively to grab share even before the paid content / subscription models for the device have stabilized.

• ...so instead of "saving" old media by providing a paid-content lifeline to a digital future, the iPad will more likely accelerate their demise.
• If consumers take to the iPad and "touch tablets" become a major new mode of media consumption, media companies that lack the skills, cost models and agility to delight consumers in this medium will fail even faster than they are now.

When Conde Nast finally recognized the need to shed costs last year, its solution was to start shutting down titles. Because they were no longer sustainable as print vehicles (and CN doesn't have the skills or structure to operate anything else) venerable brands like Gourmet and Modern Bride - with decades of archived content and established audiences, were simply put to bed. This won't be the last time this happens, and it will happen even faster if the iPad lives up to the hype.

So has anyone created a fund dedicated to scooping up failed "old media" brands and content on the cheap and rebooting them for the digital age? It would have to be a relatively high-concept approach - the assets will cost real money, and the even in distress the sellers will likely be too proud to let them go to a landing page factory like Demand Media - but a careful buyer with an aggressive and agile team of digital media pros behind her could unlock the value in these assets and build a big new company on the way. The key is to pry the current owners' cold dead fingers off them before their loyal audiences and accumulated links are too far gone to save...

Applications for TechStars Seattle open today!

Andy has a long post up today on how TechStars came to Seattle, so I'll keep this short and sweet.

TechStars is a fantastic program for early-stage software entrepreneurs who want to radically accelerate their progress and multiply their odds of success. The program has had a big impact on the early stage scene in Boulder and Boston, and is being held in Seattle for the first time this year.

You can apply to TechStars Seattle here.* You can learn more about the program here.

*The application deadline for the Seattle program is June 2, 2010 at 11:59:56 PM Pacific Time.

"Frictionless" location-based chat - check out Yaketee

One of the best parts of being an early-stage investor is having a regular excuse to meet with entrepreneurs and learn about what they're up to. I also love reconnecting with teams I've met with previously to hear how things have changed (which they always have).

This afternoon I sat down with a very smart team that I last met with (they reminded me) in December of 2008. In the 18 months since they've built up a nice little business in the enterprise property management space. In the process they've also come up with some very interesting insights about how location-based communities work (or don't). One of those ideas is now out in the wild as Yaketee, and if you're interested in location-based social software you should take a closer look.

Here's what I like about it:

• Location-based - "instant" community bulletin board for a specific location
• Frictionless - no signup, no install - just point your browser to http://yaketee.com and start chatting
• Simple - just a textbox, a "Submit" button and a list of recent posts
• Sticky - once you've participated at a location you're always a 'member' and can jump back into the conversation anytime

It's easy to imagine Yaketee becoming a popular way for impromptu local communities to form and stay in touch. It's also easy to see how venue owners might want to participate in the discussion - and might even pay for the right to play a more visible role. But for now Yaketee is just some cool beta software, and what the team needs most is feedback.

So next time you're on a shared WiFi connection - in your office, a coffee shop, a hotel - jump on Yaketee and start (or join) a conversation. If you think it's interesting and have ideas or suggestions, send the team a note at fyi@yaketee.com

P.S. - It doesn't hurt that the lead developer on Yaketee - Assaf Arkin - also built Vanity, an open-source Ruby on Rails framework for A/B testing that we use and like at AppStoreHQ.

We suck less! Product-Market Fit and customer satisfaction at AppStoreHQ

Sean Ellis has a great post up called "The Startup Pyramid" riffing on Marc Andreesen's excellent and widely-circulated post on Product-Market Fit.  Sean frames achieving Product-Market Fit as the foundation of startup success, and argues convincingly that it doesn't make sense to try to scale or monetize until a minimum level of fit is achieved:

"I’ve tried to make the concept less abstract by offering a specific metric for determining product/market fit. I ask existing users of a product how they would feel if they could no longer use the product. In my experience, achieving product/market fit requires at least 40% of users saying they would be “very disappointed” without your product. Admittedly this threshold is a bit arbitrary, but I defined it after comparing results across nearly 100 startups."

The AppStoreHQ team took this advice to heart this week and emailed a random sample of registered users to find out how many of them would be "very disappointed" if the service went away. We aren't quite at Sean's 40% target but the results - actual figures shown in the graphic above - were better that we expected. About a third of our customers would be "very disappointed" if AppStoreHQ ceased to exist, and another 56% would be somewhat disappointed.

We still have plenty of work to do (and no shortage of ideas about where to go next), but we'll be taking Sean's advice and running this test more often to make sure we're on the right track.

My 2 cents on the entrepreneur-turned-VC meme

I really enjoyed Mark Suster's post earlier this week, What's it Like Being a VC?, in which he details the pluses (many) and minuses (few) of "crossing over to the dark side" from entrepreneur to VC. Having made the same switch - albeit on a <cough> somewhat smaller scale* - his description of both the positives and negatives rang true.

One thing Mark didn't mention in his piece - but that I've been appreciating about my new role - is that the emotional tone of the investor position is almost the complete opposite of my experience as an entrepreneur. As a startup founder you're often in "ask" mode - whether you're raising money or selling or recruiting or managing, it's most often from a position of scarcity, and (as much as you may seek to position otherwise), you typically need the win more than the prospective customer or employee or journalist needs you.

In contrast, as an investor I'm find myself emotionally in "give" mode much more often - whether it's spending time with portfolio companies or entrepreneurs seeking funding, writing checks to help companies grow, or sharing deals and ideas with other investors, my focus now is much less about meeting my own needs, and much more about helping other people meet theirs.

Maybe it's just the way I'm wired, but I get huge satisfaction by being on the "give" side more often than the "ask" - it's one of the (many) unexpected benefits I've found in my own switch to the dark side.

* Founder's Co-op is currently investing from a $2.5MM pool vs. GRP's $1B+ under management

Welcoming Untitled Startup to the Founder's Co-op Family

John Cook broke the news earlier this week about our investment in Untitled Startup. Andy led the deal for us and has been closely working with Damon and Aviel for several months now, but I wanted to take a minute to publicly welcome Untitled Startup to the Founder's Co-op family and share some of the reasons why I'm personally excited about what they're up to.

For those who haven't taken a closer look, Untitled Startup is interesting not only for what they do, but also (and especially) *how* they're going about doing it. Damon and Aviel are already pretty well-known in the Twitter community as the developers behind TweepSearch, TweetStats and TweetWeather. They have a ton of experience with the ways in which individuals and organizations are already using Twitter as a PR and marketing platform, and they have a long list of product ideas - some more ambitious than others - to make life easier for these folks.

But even more importantly, the Untitled Startup team has a deep-in-the-bones understanding of how real-time communications has irreversibly changed the relationship between companies and their customers, so much so that they've chosen to make the entire process of building their company a real-time experiment in transparency and customer participation. They've invited their customers (and potential customers) to tell them what products they should build and how they should promote (and even operate) the business. They share daily videos detailing the highs and lows of building a new startup, warts and all. Somehow amidst all this listening and sharing they also find time to actually build the products customers asked for, and even *that* process is laid bare with regularly-updated posts about product development, market research, customer feedback, and even usage statistics.

Damon and Aviel are dead serious about building a business and solving problems for customers, but their spirit of openness and "lightness" as they go about it is a pleasure to be around. I know they'll do great things as a company, but they're also a wonderful addition to the Founder's Co-op community, and I suspect that all of our portfolio companies will learn a new trick of two from their extreme experiment in open startup development.