Platform Risk
Platform Risk
In the digital economy, platforms have become the pillars of our lives. Social media, Amazon, LinkedIn, the App Store, and streaming services have made it easier than ever to build businesses, personal brands, and careers. But there is no such thing as a free lunch.
Welcome to the world of platform risk - the invisible threat looming over anyone who relies too heavily on platforms they don’t own.
What is a Platform?
Platforms are powerful ecosystems that connect different groups - buyers and sellers, creators and consumers, or developers and users. They make interactions easier, more scalable, and often more profitable for everyone involved. But not all platforms are created equal.
When Bill Gates was asked about Facebook’s platform, he described it best:
“That’s a crock of shit. This isn’t a platform. A platform is when the economic value of everybody that uses it, exceeds the value of the company that creates it. Then it’s a platform.”
Put simply, there are two types of platforms - those that benefit you and those that primarily extract value for themselves.
Windows PCs vs. iPhone
To understand the difference between empowering platforms and extractive platforms, let’s compare two tech icons: Windows PCs and the iPhone.
Windows PCs: A Platform for Most
Windows let anyone build anything. From billion-dollar companies like Adobe and Dell to local repair shops and independent developers, the ecosystem thrived because Microsoft prioritized openness and compatibility. The economic value created by participants far outstripped what Microsoft made from selling Windows licenses.
By empowering others to succeed, Windows became the backbone of personal computing and a launchpad for innovation at every level.
iPhone: A Platform for Apple
The iPhone flipped the script. Apple keeps tight control, taking a 15–30% cut of App Store revenue, enforcing strict rules, and requiring accessory makers to use proprietary technologies. While this ensures a seamless user experience, it leaves developers, creators, and accessory makers at Apple’s mercy, with little room to push back.
The result? A wildly successful platform–for Apple. Everyone else takes what they can get.
Open Source: A Platform for Everyone
Let’s be clear: neither Microsoft nor Apple deserves a free pass. Both fought to limit open access when it suited them.
Microsoft tried to kill Netscape in favor of Internet Explorer, a browser that locked users into its ecosystem. Apple pulls the same move today, resisting open web standards and pushing all transactions through its App Store, where it takes a cut. Safari, Apple’s browser, is intentionally limited to keep users dependent on its ecosystem.
The lesson? Platforms controlled by corporations serve corporate interests. Open source and open standards–like the web–are the only real platforms for everyone.
Goldilocks and the Three Bears
In fairytales, you find the perfect fit. In real life, no platform is “just right.” They’re either too hot, too cold, or come with tradeoffs you can’t ignore.
Take open platforms like the web, email, blogs, and podcasts. They’re free and accessible, but here’s the catch:
1 You need technical skills to get them working.
2 You need marketing skills because there’s no built-in audience.
On the other hand, closed platforms like the App Store may take a hefty 30% cut, but they bring actual paying customers to a storefront you didn’t have to build. Convenience and reach costs you control and profit.
When To Use What?
Artists love to complain about Spotify paying pennies per thousand streams. But here’s the reality: those aren’t your customers–they’re Spotify’s. Does that mean you shouldn’t be on Spotify?
Spotify offers free distribution, marketing, and exposure to a massive audience. Use it for what it is: a tool to steer listeners into becoming your customers. Encourage them to buy your music, attend your concerts, subscribe to your exclusive content, or purchase your merchandise.
The key is to treat platforms like Spotify as gateways, not destinations. Let them amplify your reach, but always direct people back to what you own and control.
Whether you’re posting on YouTube or TikTok, branding on Instagram, selling on Amazon, job hunting on LinkedIn, building on AWS, or choosing your tech stack, always ask yourself: Is the platform serving you or using you?
