When to play platform games

Here at the Web 2.0 Summit, you can feel the envy that entrepreneurs have for Facebook and the huge lift the company got from opening up its service and making it into a platform that other developers can write for. Many startup CEOs I've talked to lately say they plan to release their product as a platform.

The instinct is good. Businesses based on platforms are more powerful than those based just on products. But there's more to platformizing a company than just publishing a few APIs. If you look at the Web services that became successful platforms, you see something similar in each of them. They offer more than just a way to do things: They all have either content or community that you simply cannot get anywhere else. Let's look at successful platforms for examples:

• Facebook. Facebook exposes its "social graph," the database of its users and how they are connected, to applications. That's its secret. That's why it's a platform and MySpace, so far, is just a bucket for code. MySpace widgets can't access MySpace aside from appearing on a page. That's pretty lame. Facebook apps, on the other hand, by default have direct access to Facebook's most important asset.
• Salesforce.com. Again, Salesforce.com is not just a framework that developers can plaster business apps on. Very much like Facebook, Salesforce "Appforce" apps have access to the CRM database--Salesforce's version of the social graph--at the service's core. If you want to build an app on Salesforce, you get access to that key data for free. That's the huge value of the platform.

• eBay. Not usually considered a platform, eBay in fact does 25 percent of its transactions via third-party applications, thanks to its API. However, eBay is not completely platformized. The site lets outside apps create new listings, but it does not expose its own social graph--its reputation database--openly to developers. Max Mancini, eBay senior director of platforms and disruptive innovation (love that title) told me that the company is looking at opening up its reputation system...maybe.

• Speaking of eBay, PayPal is a platform. You can tell by the number of applications that access it directly. Its value-add, obviously, is the capability it gives developers to bill people and collect money.

• Flickr is a good platform for photo sharing. There are dozens of clever Web applications that interact directly with the Flickr database of photos and users.

• Finally, we can look at Twitter as a platform. Its open APIs lets users create and read Twitter messages without requiring that the user touch the Twitter Web site directly. The platform could be used for more than just person-to-person communication, and we may see apps that do this. To be fair, RSS can do a lot of this, too, but RSS is a standard, not a platform. Twitter has a social graph of its own, the network of interconnected users. RSS, simply a communications standard, does not.

The takeaway, for Web entrepreneurs, is not to get too carried away with the idea of making your service into a platform. At least not at first. You need to build you network of users first. Once you've got an interconnected collection of people or companies or data, then you may be able to accelerate its growth by opening it up to the world. But not before.