Platform Risk

What is Platform Risk

Platform risk arises when you build your business or side hustle on top of an existing platform in order to leverage on its existing services and users.

As explained by Startup Illustrated the risks fall into 2 categories:

  1. Platform moderation
  2. Platform existence.

Why now

An app I like recently got priced out of the API it builds on top of (Apollo)

Twitter & Reddit are just 2 recent examples of companies that have priced out 3rd party apps from their API’s. Watching all of this has resulted in me thinking a bit more about the topic.

Some heuristics

Assume any products or services you’re building on top of can & will cease to exist. How exposed is your product to those pieces failing? How easy is migration? What impacts your core service provision?

Some platforms with risk exposure when building & delivering a product:

  • Hosting infrastructure
  • Version Control systems (github goes down & you can’t ship changes)
  • 3rd party API’s in your product
  • Internal communication tools

All of these are subject to platform risk. You can’t de-risk yourself 100% & that’s not worth attempting. Identify your core domain, and de-risk that as much as possible.

Startups can usually only do one thing well at a time.

Content creators also face platform risk when it comes to distribution of content, but that’s another post, I digress..

Example of my platform Risk

Spotify is my main tool for curation, I have hundreds of playlists on there, and about 9 750 liked songs at the time of writing. Music disappears off Spotify a lot of the time, which means I’m at risk of my beloved collection eroding over time.

A big chunk of the experience on is reliant on the Spotify API, & I don’t like that.

A few mitigation strategies:

  • I’m recording and hosting more of my own mp3’s in the form of DJ mixes & podcasts, as opposed to track previews powered by the Spotify API.
  • Using more than one music streaming service (I don’t keep secondary accounts active all year)
  • My favourite: building an offline collection of lossless music, via bandcamp

Cloud Computing vendor lock in

  • Pay attention to egress fees and proprietary tech

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