Build a Platform: Automate and Scale Your Business

If I were going to start another company today, it would be a PLATFORM business.

A startup with great Interfaces that allows other entrepreneurs to build their business on top of mine. One that allows them to make money as I make money. It’s a win-win proposition and most of the top players from Uber to YouTube have done this.

So, what's the key to building a platform company?

The answer is: Interfaces, the next attribute in the ExO model.

Interfaces are the bridge that brings together your company’s external and internal components and connects them to your users. Interfaces (or APIs) allow for Community & Crowd to engage. They take the complex data created by an ExO and make it simple and meaningful, accelerating your growth.

In today’s blog, we’ll explore the power of APIs to enable a platform, show several case studies of leading companies using Interfaces, and provide a few ideas on how you can use Interfaces in your business to build yourself into a platform.

As our first example, consider the EPIC SUCCESS of Shopify: a company that mastered this ExO attribute to the tune of a multi-hundred-billion-dollar valuation.

Let’s dive in…

NOTE: Understanding how to turn your business into an ExO and increase your growth and impact is a key component of my year-round Abundance360 leadership program.

Shopify: A Master of Interfaces

Canadian online commerce giant Shopify was founded in 2006 by two snowboarding enthusiasts. Originally an online snowboard shop, Shopify pivoted into e-commerce software when the founders couldn’t find what they were looking for online: namely, a platform for users to sell goods while simultaneously growing their brand in the digital space. 

At the heart of Shopify’s success is its proprietary e-commerce platform for online stores and retail point-of-sale systems. The Shopify platform offers online retailers a suite of services, including payments, marketing, shipping, and customer-engagement tools. In other words, Shopify offers Interfaces for most aspects of its platform and offers that platform to any e-commerce enterprise. Any business can leverage those assets, including warehousing and distribution as a service. 

As of May 2023, sellers had created more than 4.4 million e-commerce stores in 175 countries on Shopify, with a total gross merchandise volume of more than $50 billion USD per quarter. The platform even boasts an app marketplace, which turns Shopify into a full ecosystem of third-party functions. Today, you can set up an e-commerce store on Shopify in less than 30 minutes. 

Shopify is an incredible case study of how to optimize Interfaces. By automating services on both the supply side and demand side of their e-commerce offerings, they can scale infinitely (and seem to be doing so).

What Exactly are Interfaces?

Many ExO attributes (e.g., Community or AI/Algorithms) are well understood by the business world. Interfaces, however, are one of the least documented—yet most important—business dynamics my

Interfaces serve as filtering and matching processes, enabling ExOs to connect with and manage their SCALE externalities.

These processes often begin as manual and slowly become automated around the edges, eventually evolving into self-provisioning platforms that allow the ExO to scale. For instance, Google’s AdWords has become a multi-billion-dollar business, largely due to its self-provisioning nature. Interfaces like these help ExOs systematically and automatically filter and process outputs from external attributes (SCALE) and integrate them into the core organization.

As a result, processes become more effective and efficient, reducing margins of error.

When a company grows exponentially, Interfaces become crucial for seamless scaling, particularly on a global level. Exponential Organizations have developed unique Interface processes to coordinate data and to oversee everything from prizes to personnel. Kaggle, for example, manages its million data scientists. The XPRIZE Foundation has mechanisms and dedicated teams for each prize. TED enforces strict guidelines for consistency in its franchised TEDx events. Uber has customary protocols for handling its army of drivers. Interface processes are often unique and proprietary to the organization that created them, representing a distinct type of intellectual property with considerable market value.

ExOs devote significant attention to Interfaces, employing human-centered design thinking to optimize them. As Interface processes evolve and become more powerful, they typically involve heavy instrumentation and metadata gathering, which feed the company’s Dashboards. Ultimately, Interfaces often become the most distinguishing internal characteristics of a fully realized ExO. At peak productivity, Interfaces enable an enterprise to manage its SCALE external attributes, especially Staff on Demand, Leveraged Assets, and Community and Crowd.

Without effective Interfaces, an ExO cannot scale or become a platform. For all these reasons, they are mission critical.

How Interfaces Help Create Platforms

Interfaces are the vehicle by which companies become platforms.

All platform businesses create value by facilitating exchanges between two or more interdependent groups, usually producers (supply side) and consumers (demand side). For example, the automation of supply and demand Interfaces created the Amazon Marketplace platform. Interfaces are vital to the design of the ExO process, allowing the inside of the organization to access the outside world and vice versa to create a platform and, ultimately, form a dedicated Community. 

When an organization becomes a platform upon which users (entrepreneurs and businesses) build their business and livelihoods, then these users are incentivized to support, promote, and maximally utilize that organization.

A great example of this is YouTube, which has become one of the most successful platforms in history. In 2022, YouTube had an average of 2.7 billion monthly active users and was valued at $23.89 billion, up from $17.29 billion in 2021. The typical compensation for YouTube content creators in the United States was approximately $4,616 per month in 2022.

The Beginning of Interfaces: APIs

An API is a set of rules and protocols for building and interacting with software applications.

It defines the kinds of calls or requests that can be made, how to make them, the data formats that should be used, and the conventions to follow. APIs essentially allow different software programs to communicate with each other. They serve as a contract between different software components, dictating how each component should interact with the others.

APIs make it easier for developers to integrate different software applications, services, and functionalities into new or existing systems, thus enabling seamless communication between various platforms and allowing for the creation of more powerful and feature-rich applications.

APIs provide pre-built functions and enable developers to build on top of existing platforms, services, and technologies. In these ways, they save developers time and effort while fostering innovation: developers can focus on creating unique features and experiences rather than building everything from scratch. These practices also help to establish standardized protocols and interfaces for communication between software applications, ensuring consistency and compatibility across different systems.

Here are a few examples of leading companies using APIs: 

• Facebook/Meta: Facebook’s Graph API allows developers to access and manipulate Facebook data, enabling the creation of third-party apps that integrate with Facebook’s platform. This includes features like posting updates, retrieving user information, and managing Facebook Pages and Groups.
• Google: Google provides APIs for many of its services, including Google Maps, Google Drive, and YouTube. These APIs allow developers to integrate Google services into their own applications—for example, embedding maps, accessing cloud storage, or playing YouTube videos within an app.
• Stripe: Stripe provides a suite of APIs for online payment processing, allowing developers to easily integrate payment functionalities into their applications. This enables businesses to accept and manage payments without having to build their own payment infrastructure.

Successful Company Case Studies

Here are several other case studies of companies using Interfaces and building Platform businesses:

• Twilio provides APIs to automate voice, text, and email as a service. Customers can build their own business around these APIs. Among these services, Twilio digitizes VoIP + text infrastructure, machine-to-machine communication, machine-to-people communication, and bridging analog to digital. As of May 2023, Twilio was worth $11 billion.
• Coinbase, the largest cryptocurrency exchange in the United States by trading volume, has no headquarters, and all employees work remotely. This unique organizational structure makes good Interfaces a necessity, as does the fact that Coinbase’s core business is powered by a cryptocurrency exchange platform and used by more than 100 million customers. At its peak, Coinbase was valued at over $75 Billion.
• Australia’s Canva, whose MTP is “Empowering the world to design,” is a free (for basic service) online design platform that makes it very easy for anyone to rapidly create quality designs, such as posters, flyers, presentations, documents, social media images, etc., through a library of thousands of graphical templates that can be accessed via a drag-and-drop Interface.
  

How to Use Interfaces for a Platform Business

The Interfaces you create for your company will be specific to your business and industry.

You’ll need to look at what can be automated and how the abundance of information must be filtered and matched best to optimize your processes.

Here are 6 simple steps to help:

1. Identify the sources of abundance (e.g., data) you have access to.

2. Humanize the interaction to define the proper UX or automate the interaction to determine the right API.

3. Create repeatable processes or standard operating procedures (SOPs). 

4. Apply AI and Algorithms to automate relevant processes. 

5. Test Interfaces with pilot populations of users. 

6. Maintain and update your Interfaces regularly.

You can look at the Interfaces used by successful ExOs like Airbnb and Google Adwords for inspiration and guidance.

Why This Matters

Interfaces are critical to the ExO process.

They allow the “inside” of the organization to access the outside world. Interfaces increase efficiencies and productivity, ultimately leading to more innovation, cost savings, a superior user experience, and greater customization.

Perhaps most importantly, Interfaces are required to manage abundance of information. They determine whether supercharged growth will overwhelm the ExO or enable it to successfully convert that abundance into value.

But how does an ExO track its level of efficiency and overall operational health in real-time?

That’s where Dashboards, the topic of our next blog in this series, come in.