Over the past two decades, the world’s hyper-ambitious entrepreneurs — is there now any other kind? — have largely pursued a pair of goals in tandem. First: Become a platform. Second: Take over the world. The former is supposed to lead to the latter, as it seemingly has for the five companies conglomerated under the intimidating acronym FAANG. Facebook, Apple, Amazon, Netflix and Google have taken such a bloodsucking bite (get it?) out of the world economy that in the past half decade alone they have more than tripled in value — at a rate three times faster than the growth of the entire S&P 500 — and are now worth north of $7 trillion. The appeal of building a platform is clear.
But what, exactly, is a platform? In the analog world, a platform is where you catch a train or launch a rocket or give a speech — somewhere you go to do something else. In a digital context, platforms facilitate transactions. Facebook and Google don’t sell much themselves; they make money by connecting advertisers to your eyeballs. Apple profits from selling phones, but a major part of its revenue comes from taking a cut each time you buy something from someone else in their App Store. The promise of the platform business model is its magical self-reinforcement: Once the platform is in place, money is supposed to flow through the system without much extra effort at all.
The siren song of platformdom has proved irresistible to countless start-ups, with many finding a way to shoehorn the word into their investor pitch decks — WeWork used it 170 times in its ill-fated attempt to go public — as an easy signal of ambition if not always the reality of their business. Peloton, which sells indoor exercise bikes, calls itself an “interactive fitness platform.” Casper, which sells mattresses, is a “platform built for better sleep.” Beyond Meat, which sells faux-burgers that taste like beef, pork and poultry, insists that these are actually “three core plant-based product platforms.” The world’s most established companies are not immune to the trend. On an episode of a podcast produced by the Boardroom (a “sports business content platform” co-owned by the basketball superstar Kevin Durant), the Goldman Sachs chief executive, David Solomon, said that Goldman is not a bank but a company with “three principal platform businesses.”