Guide to Platform Product Management

Explore essential strategies and challenges in platform product management, from defining types to enabling third-party development

Definition

Platform product management is a subset of product management that focuses on developing and managing ecosystems around their products or services to solve a problem coming from multiple businesses. It is an extensible and scalable product solution that allows you to leverage the same solution more than once.

The platform can be software, hardware, or a combination of both. Platform product managers work closely with developers to provide the tools, resources, and support to create and launch their products on the platform. A platform where two players, producers and consumers, interact with each other to create value and this interaction is enabled by infrastructure whose goal is to increase the quality and quantity of interactions. ( Traditional Industrial models try to improve quality and quantity through processes )

Platforms exist to make it easier to solve a problem that's coming from multiple businesses or products. It is an extensible and scalable product solution that allows you to leverage the same solution more than once. By creating a platform, companies can open up new revenue streams, expand their customer base, and foster innovation by enabling third-party developers to build on their platform.

Platform product managers also play a critical role in ensuring the platform is scalable, reliable, and secure. They must work closely with engineering, operations, and security teams to ensure that the platform meets the needs of both developers and end-users.

Skills Required: Systems-level thinking, architecture and collaborations between product strategy and technical leadership, ​​building something sustainable and embedding long-term thinking in the way that you create your products

Platform vs. Product

Same Skills as PM, Just Different Focus

Product management

It focuses on developing and managing a specific product or product line. Product managers are responsible for defining the product strategy, developing the product roadmap, working with cross-functional teams to execute that roadmap, and ensuring the product meets the target market's needs and delivers business results.

Platform product management It focuses on developing and managing a platform that enables companies that want to build ecosystems around their products or services for example enabling third-party developers to build and deploy their applications or services. Platform product managers must balance the needs of both developers (internal and external) and end-users and create a platform that is scalable, reliable, and secure.

Why platform

• Rapid Growth Leads to Inconsistency - With a focus on standalone products, product teams create different solutions to very similar problems.
• (Legacy) System Complexity - As complexity grows, quality and predictability decline and teams have become more cautious in making large-scale improvements.
• Managing Dependencies Across Teams - Work to break organisational silos and decentralised knowledge, and take responsibility to empower delivery teams to be more autonomous and nimble.

Principles

A digital platform is a foundation of self-service APIs, tools, services, knowledge and support arranged as a compelling internal product. Autonomous delivery teams can make use of the platform to deliver product features at a higher pace, with reduced coordination. A platform should also be more than just software and APIs - it is documentation, consulting, and support and evangelism, and templates and guidelines.

The “Platform Thinking” model allows you to realise business outcomes faster, laying the foundation for new value sources that emerge from a creative engineering and product workforce that is empowered to imagine and create.

• The platform is self-service and fosters autonomy.
• The platform is composed of discrete services that can be used independently.
• The platform is flexible and doesn't force users down a specific path.
• The platform is faster and cheaper than building a separate stack.
• The platform has security and compliance baked in.
• The platform is intuitive to use and enables simple onboarding.

Key Takeaway: A platform that works when using its capabilities is easier and faster than building and maintaining something bespoke.

Platform thinking works by

• Removing friction from delivery teams by focusing on high-quality, self-service access to foundational technology.
• Creating an ecosystem of technology and business capabilities. Using domain-driven principles, carefully-factored business capability interfaces (APIs) are critical components of an effective, modern Service Oriented Architecture (SOA) strategy.
• Explicitly investing in a foundation for experimentation ensures every delivery team has access to tools to make testing new ideas and validating learning easy.

This isn’t a “build it, and they will come” approach to platform building. The Digital Platform Strategy engages your business and technology stakeholders to prioritise building the most valuable capabilities in a lean, incremental manner.

Users

Users of Platforms are

• Internal Users
• Product Managers (Amplitude or Mixpanel)
• Developers ( Stripe )
• Data Scientists ( Observablehq )

It is expanding in nature. Firm < Platform < Ecosystem

Types of platform

Transactional and innovation platforms are two types of platforms that serve different purposes and have different characteristics.

Transactional platforms are designed to facilitate transactions between parties. These platforms usually involve a buyer and a seller who interact with each other to exchange goods or services. Examples of transactional platforms include e-commerce marketplaces like Amazon, eBay, or Alibaba, Facebook, Twitter, and Uber.

Innovation platforms are designed to facilitate collaboration and innovation among a diverse group of stakeholders. These platforms focus more on generating new ideas, products, or services than facilitating transactions. Innovation platforms often involve multiple parties, such as entrepreneurs, investors, researchers, and policymakers, who collaborate to create new solutions to problems. Examples of innovation platforms include open-source software development platforms like GitHub or GitLab, Android, AWS.

• Developer Platform
  • Provides API, Tools, and Servers to developers
  • Builder Focused
  • No relation with end customers
  • E.g., AWS, Stripe, Twilio
• Marketplace / Consumer Platforms
  • Connect creators and consumers of X
  • Creators and consumer-focused
  • Direct relations with both consumers and creators
• Product Extension Platforms
  • Purpose of improving the product through third-party developers
  • Combination of developers and marketplace
  • Consumer-focused
  • Primary relationship with consumers,
  • E.g., Shopify, Salesforce, Android

Examples:

• Commerce Platform: Platform enabling managing subscriptions, Entitlements, payments, and offer management and financial transactions.
  • Middle users: Platform Teams, Feature Delivery Teams, Marketing Teams and Finance
• Messaging Platform: Systems managing newsletters, push messaging, onsite messaging and other direct communication with readers.
  • Middle users: Editors, Journalists, Feature Delivery teams, Marketing Teams

Strategy

What is the core digital value that you can digitalise for the first time

Product Business: If you can create more value by opening your product to 3rd-party "complementary" innovations, try an innovation platform strategy. - But you still need to start with & maintain a good product!

Service Business: If you can generate more value from connecting market sides vs. owning assets or producing a service directly, try a transaction platform strategy. - But you still need to start with & maintain a good service!

Hybrid Strategy: Innovation platforms: Distribute complements with a transaction side Transaction platforms: Add complements with an innovation side

Systematically prioritise strategic investments

• Assess the most impactful sources of friction, whether it be fragile technology stacks, poor developer experience, long process delays or toxic culture.
• Identify and unlock critical data assets and business capabilities via easy-to-consume, self-service APIs.
• Enable the “test and learn” product development model across the entire technology stack by focusing on the end-to-end toolset and process.

Factors to consider

• The platform is a product that needs a long-lived and stable product team tasked with building and running.
• Secondly, you must be willing to shift some or all of the run responsibility for applications into the application teams and away from centralised operations and support. The platform provides tools and services to allow application teams to take responsibility for what they build, this won’t happen while support is centralised.
• Thirdly you must be willing to trade off strict consistency of implementation against the freedom and responsibilities you’re handing to the autonomous application teams.

Gotchas

• Your platform is not only infrastructure, tools, and APIs you can install. To be effective, you must answer how your delivery teams will quickly adopt the new capabilities, what choices they will make independently vs using sensible defaults, and how you will maintain the capabilities ongoing. This will require some internal consulting skills and training, and evangelism.
• You need to know what platform capabilities you need, so start small based on genuine proven needs. Harvest has already proven solutions from application teams and try joint ventures to create and test capabilities with the teams that will use them.

Approach

• Build poly-skilled teams only as necessary.
• Encapsulation & self-service create scale
• Invest in long-lived capability teams
• Think first, build second.

Strategy in Product Extention Platforms: Customers problems you need to solve = problems you could feasibly solve + Enable 3rd party developers to solve the gap ( they can because they are distributed around the world, understand niches and can build faster )

Deprecation is Key to ROl Failure to decommission old legacy services may cost you your efficiency gains.

Observe broader trends in the industry and be able to bring them back to the platform.

Enable Vertical Scale: Building on top of each service to unlock new business values.

Automation -> Speed Efficiency Self-Service -> Customer Experience Network Effect -> Grow

Building horizontal infrastructure on which vertical experiences are built

Ship an API or Automation, Not a Person

Monetisation Model

• API revenue share - Products built on the Salesforce platform pay out around 15 - 25% of revenues as royalty.11 Currently, 50% of Salesforce revenues are through APIs.1
• API subscription - Docusign, the #1 e-signature platform prices its APIs based on a monthly subscription plan with tiering based on document volume. DocuSign's revenue was $518M this year at IPO, and nearly 60% of the transactions are through APIs.1
• API call volume - Twilio, a real-time communication platform, charges per API call or per user.14 Twilio’s revenues are in the range of ~ $400M, with an average YoY growth rate of 50%.15
• Premium API access - Twitter offers APIs for premium access for elevated access
• Strategic API partnerships - Salesforce has an AppExchange Partner Program that ISV partners can take advantage of: ISVforce allows developers to build, market, and sell apps only to salesforce.com customers at a 15% reduction.1
• Data monetisation - Twitter has started allowing enterprises to access APIs that directly provide data insights.18 Data licensing now accounts for 15% of Twitter revenues

Building Platform

• Accelerate the Flywheel: More Developers -> More Apps -> More Customers/Merchants want your product -> More Developers.
  • Structure Teams around Flywheel
    • App Capabilities Teams: Create new ways for developers to create apps ( KPI: No of apps built)
    • App Store and Algorithms Teams: Connect the right app to the right merchant at the right time ( Build marketplace, recommendation systems ) (KPI: No of Apps used)
    • Developer Growth Teams: Enable developers to know where opportunities lie ( Analytics, Insights on what customers need, also Payouts to developers) (KPI: No of developers active)
  • Trust is Flywheel grease: Invest in trust features like permissions, privacy, security, data management, quality support, and reviews.
  • Develop Skills - Economics, Operations, Software Engineering
    • Software Background: Developer Empathy, Product is code
    • Economics: Microeconomics, balancing supply-demand marketplace, the intuition of free market is important
    • Operations: Enormous human effort is required to maintain quality and safety on the platform, a constant race to automate operations as scale occurs and introduce new features
• Earn trust with developers
  • Purpose, Policy and Business Model should be in harmony
    • Purpose: Why your platforms exist, Policy: What you punish, Business Model: What you reward
    • App Store Algorithm optimises for merchant success (Marketplace Ranking Factors)
    • How do you introduce policy changes
  • Invest in Community
    • Get your first developers like how you get first customers
    • Invest in meetups and conferences
  • Treat developers as business partners
    • Pick up the phone, especially when it is bad
    • Build internal governance practices to ensure fairness
    • Constantly find ways to make them more successful
• Be Patient
  • Platform creativity is unbelievable
  • Platform changes .. just take a long time
    • Need to do things carefully and sequentially.
    • Follow the playbook
  • Stay open as long as possible ( Spectrum of open(creativity) to closed(control) )

Removing a feature is challenging, as everything you incorporate into your platform will become sticky. An invariable people will latch onto that one thing, and they will want it forever, so before you build anything into your platform, you need to ask yourself if this is extensible, is this scalable if not, say no gracefully.

Make a single view of the ecosystem.

• Harness value flows in the ecosystem and orchestrate new value flows
• Integrate flows across the enterprise to create one view of the ecosystem
• Digitize assets, actions, and processes to create flow

Think in terms of components where possible vs launching in one swoop

• quick wins can be rarer in platform work, as even small changes often require broad coordination
• it helps to think in terms of MVP and component parts to help you land launches along the way vs trying to build the entire experience at once

Communication

Managing Up, Managing Down

• Leadership - Leadership needs to see the business value platform PMs will bring over time and understand how they support the long-term acceleration of business goals and KPIs.
• Engineering - Engineers need to understand that Platform Product Managers will make their lives easier and enable them to scale their successes, not take away architectural decisions.
• Partner with middle users - Neither platform teams nor feature development teams can be successful unless both work in harmony. For a platform to drive impact, a product dev team must use it.
• Prove Value - Tie platform KPIs to business value that would not have been possible without platform work. Show and communicate what you enabled.
• Share Credit - The end-to-end user journey requires work at multiple levels. Share and take credit up and down the value chain.

Things to keep in mind

• Be bold & proactive with a perspective for how the platform will support vertical teams
  • share guiding principles for what components the platform will provide and what components should be built vertically
  • publish an agreed-upon SLA to partners in vertical teams
  • provide guidance on the platform's strategic direction as this allows partner teams to plan ahead
• build an understanding of end-user needs for the vertical products you enable
  • empathy for end users is key for understanding how needs from multiple sources should be distilled into scalable components
  • understanding trends and changes in the vertical product areas will help you build for long-term needs
• All partnerships are not created equal
  • understand which partnerships provide the highest value to your platform goals & the company; this is important for prioritising needs and setting your strategy
  • non-critical partnerships tend to be well-served by adopting out-of-the-box components
• Joint roadmap goals tend to be effective in reaching alignment
  • Starting the partnership process early enough to have joint roadmaps can save you a lot of wrangling down the road
  • it signals a commitment to the plan
• Think in terms of components where possible vs launching in one swoop
  • quick wins can be rarer in platform work, as even small changes often require broad coordination
  • it helps to think in terms of MVP and component parts to help you land launches along the way vs trying to build the entire experience at once

Alignment

• Enablement is Crucial - Consider documentation, onboarding and a support model part of the platform.
• Empower the Enthusiasts - Reaching full alignment and support takes time; bring your enthusiasts on as early adopters to pave the way
• Trust Through Transparency - Invest in observability and monitoring; you lose trust if you can't diagnose issues.

Culture

To be a successful platform engineering team, teams need to do have the culture of:

• Spiking
• Continuous improvement
• Iterative/Agile development
• Collaboration-focused
• Servant leadership
• Autonomous, self-organised teams
• Empowerment & trust
• High alignment

Launching

Beta launch to its internal employees only to show how your platform is driving the key metrics that you want to unlock, but you don't necessarily have the risk of doing a public launch.

Don't Forget to Market: It will look different, but Internal systems need product marketing too.

Metrics to measure

Spend a lot of time in goal setting right and always connect to business metrics

Align with business goals >> What the platform can do

Understanding the link between what your platform is unlocking and the company's goals will have a really powerful narrative that is going to get you a lot of buy-ins when you're talking to all of your customers

Drive growth metrics of your business partners.

Platform PMs must anticipate how the company will evolve to meet end-user needs and use this to prioritise platform investments.

The key platform success metrics are similar metrics used to monitor microservices. Common platform metrics are:

• Platform availability SLAs measured as 99.95% / 99.99% / 99.999%
• Usage metrics measured as #API calls/day
• Performance metrics measured through Read/Write/ Query latencies in mico/milliseconds
• Scale metrics measured as #Events ingested per day, #of queries per second, #of notifications sent per day etc

Adoption Metrics

• Which customers are using our product? Use case coverage/variations metrics
• For how many different use cases (of all of them) are customers choosing your product?
• How many variations of the same thing are customers doing with your product?
• Important to measure penetration across your customers as the product matures. Extensibility metrics
• Usually, a platform product has to support extensibility if you want to avoid becoming a bottleneck.
• How much are your users extending your product?
• Sometimes, it is even good to see the cross-sharing of extensions between customers. Performance Metrics
• Uptime, Incidents, Response time Workflow Metrics
• Time to make X

User Evaluation

Delivering value to users

• Does it help you to do your work (daily)?
• How well do you understand the onboarding process for our platform?
• Do you understand the data?
• How easy/user-friendly do you find to interact with the platform?
• How satisfied are you with the support we provide?
• Documentation feedback
• Overall rating/Net promoter score/CAT score
• How easy is data analysis?

Delivering value to the organisation

• How well do you understand the onboarding process to our platform?
• What business challenges are you trying to solve?
• Did the platform help solve your problem/achieve your goal?
• What triggers prompted you to use the platform?
• Which features/capabilities of the platform are most/least important to you?
• How will it impact your business stream if the platform is unavailable for 5
• minutes?

Flexible to change

• Do you think you can innovate using our existing platform
• Is it easier to create something new using our platform
• Can you do things faster than before?
• What is leading you to continue to use the platform?
• What prompts to look for other options than this platform?
• Are your requirements met on a timely basis?

Adoption of new features?

• How well can you navigate through the new changes?
• Do you have trouble understanding the processes?
• Do you think you have enough documentation to understand the changes?
• Was the communication regarding changes appropriate to get started?
• Do you understand what actions are expected from you now?
• Did the new change improve your developer time and velocity?
• How do you feel about these new capabilities?

Challenges

• Understand the big picture and aim for a holistic view
  • Knowledge makes everything simpler
    • Try always to understand the basics - from the basics about the informal organisation to the basics of platform architecture
    • Don't ever be afraid to ask - there aren't stupid questions
  • Listen to everyone wisely and connect the dots
  • Create a group of people you can trust, learn and rely on them
• Different stakeholder management at the same time
  • Platform PMs need to manage a vast network of stakeholders like Customers / Business / Other Product Managers
    • Allow everyone to work collaboratively - attending meetings and scheduling deep dive sessions
  • Privilege transparency and define ways of working

References

• Youtube Playlist: Link
• "Inspired: How to Create Tech Products Customers Love" by Marty Cagan
• "Platform Revolution: How Networked Markets Are Transforming the Economy and How to Make Them Work for You" by Geoffrey G. Parker, Marshall W. Van Alstyne, and Sangeet Paul Choudary
• "Product Management vs. Platform Management: What's the Difference?" by Alpha UX
• "Product Manager vs. Platform Manager" by Mind the Product
• "Product Manager vs. Platform Manager: The Key Differences" by Aha!
• "Talk About Platforms" by Martin Fowler