The Pitfalls of Becoming a Platform

Nobody wants to be a “tool.”
Everybody wants to be a “platform.”*

Tools are small. Point solutions. Easy to replace. Low price tag.
Platforms are big and sprawling. Enterprise-friendly. High ACV. Investor-ready.

But is positioning yourself as a platform always the best choice?

In the 500 positioning projects we’ve run as part of FletchPMM, our product marketing consultancy, there is one story we hear over and over and over.

Too many company’s have followed the platform siren song… straight to their destruction.

(*When I say “platform,” I’m not referring to the developer term meaning software that others can build upon with their own apps. I’m referring to the marketing term meaning a large, multi-departmental software solution.)

Let’s chronicle the tragic trajectory of many B2B software companies… starting at the very beginning.

A person experiences pain. They create an application to remove that pain. Having solved the pain, they bring the solution to market. Voila! They’re a founder!

If the pain was real and widespread, the startup begins to gain traction. The founder pitches the product to their professional network and gets some pilots going. Some companies turn into paying customers.

Investors get involved. The founder hires engineers — lots of them. In fact, the bulk of the fundraising goes to the engineering team.

And what do engineers do? They ship. Every two weeks, they launch something new.

The product starts to grow. For a while, each change helps the company address the initial pain more effectively. But founder ambition can’t be limited, and soon the product mushrooms into adjacent use cases that the original couldn’t address.

The founder is delighted. There’s something for everyone! And they have no trouble tweaking the sales pitch for each prospect. 

Finally, it’s time to raise that coveted series A. So the founder brings in their first marketing hire (they likely have 15-20 engineers by now).

The founder believes that surely, within a quarter, the new marketer should drive lots of qualified pipeline from multiple channels. After all, AI tools have sped up the engineering process. Surely it can do the same for marketing?

The marketer that joins is greeted with an uncomfortable reality: the product is massive. 

It has been growing like a weed sprint after sprint after sprint, and it now rivals the offerings from multi-billion dollar companies. There are countless modules and endless features. 

The founder believes this is a strength. The bigger the platform, the higher the ACV. Isn’t that obvious? If we sell a point solution, we can only charge a small amount of money. If we sell a massive platform that spans multiple departments, we can charge six, seven, or eight figures.

But the marketer is aware of a truth the founder hasn’t considered. 

Who can buy a platform like this? 

The moment a platform spans multiple departments, it can no longer be purchased by a single department. Marketing can’t buy a platform and force Sales to use it (and vice versa). So the go-to-market strategy would rely on the ability to consistently get in front of C-Suite executives. 

But the founder isn’t worried. They think about their last several deals. They were all executive-to-executive for large company-wide rollouts with high ACVs. 

The marketer asks how the founder got meetings with top executives of big companies. Did they happen to be people they knew personally? 

The founder thinks back and realizes every single deal started with someone in their network. Someone who trusted him. Someone who was risk-seeking and wanted to be seen as an innovator in their space by taking a bet on a small startup.

The marketer asks how many more people the founder knows who fit that profile. How many more of these “innovators” could they potentially tap to help the company continue to grow?

The founder thinks about their rolodex, and knows it’s almost fully exhausted. Besides, a fully founder-led approach isn’t going to fly with the VCs.

Suddenly, the founder has a stroke of inspiration: “why not point our go-to-market strategy at the executives? We have a very compelling story around reducing churn and increasing revenue. The H1 of our website could be ‘get more qualified pipeline’ — that’s really important to executives right now.”

The marketer sighs and tries to stay patient. The solution sounds good on the surface but is plagued by problems. They try to explain them one by one: 

Yes, many deals end with the executives. But that’s not where they start. 

A study by Wynter found that only 13% of new deals started with an executive in companies making $50m a year (squarely in the “mid-market”). When you move to the enterprise, this percentage plummets to single digits. 

CXOs in enterprises don’t spend time reading websites, comparing software solutions, or taking calls with AEs. If they did, the board would fire them. 

CXOs get hundreds of cold emails every day (and this is not an exaggeration). They built large walls to protect them from pitches of any kind. 

If you want to land Salesforce as a client, going through Marc Benioff is not a realistic strategy.

If you can’t get through the CEO, then what should you do? Move on to the next company? 

No sales team worth their salt would be their entire strategy on reaching only the top executives. Not when there are hundreds (if not thousands) of managers, directors, and VPs who could initiate the beginning of a deal. 

If the whole strategy is built on telling the “executive narrative,” it will alienate all the potential lower level employees who realistically would be the actual champions of the software.

Middle management isn’t looking at board-level metrics. They’re focused on their own department’s KPIs — which are by definition not executive level. 

So when they see “increase revenue” style messages, it will not speak to their world in any meaningful way.

The founder thinks through everything the marketer has presented. It seems they are now caught between a rock and a hard place. 

It’s at this exact moment most startups reach out to us. Ideally, if they’ve been reading our content, they understand the issue for what it truly is:

A positioning problem.

What can the founder and the marketer have? How do they break this gridlock and move forward?

We’ll cover this (and more) in future newsletters.

In the coming weeks, we’ll be experimenting with different formats. To that end, we would love your feedback! Please let us know any feedback you have.

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FletchPMM is a product marketing consultancy that has helped 500+ B2B software companies find their positioning strategy, document it in an internal deck, and share it on a rewritten homepage.