What is the difference between a product-based business and one that takes a platform-based approach? The answer provides a basis for understanding why the tech landscape has changed so dramatically. And as explained below, these changes have allowed platform-based companies to set the “rules of the game” and achieve tremendous market success.Why Product-Based Tech Strategies Fail
Throughout the 20th century, achieving business success went hand-in-hand with producing a product that met a consumer need. Companies simply had to identify a suitable market niche and then capably produce and market a product for it. Those that also invested in product innovation could secure an enviable market position. With the right product, an innovative company could create a highly profitable revenue stream and reinforce their overall brand. Many did and as a result thousands of successful products have become household names, including Coca-Cola, Kleenex, Chapstick, and Q-tips (to name a few!). We still use these products and their derivations everyday.
Unfortunately, even leading companies can produce products that fail. And those that do succeed must still ward off new competitors. This is particularly true in the highly competitive tech field. Tech is a constantly evolving field, so tech companies hardly expect that any successful product will achieve lasting staying power. As such, their products are increasingly subject to an ever-shorter product life cycle. Even stand-alone tech products that are highly successful can expect a short shelf life. Aware of this, tech companies must continually innovate and plan for product obsolescence.How Apple Survived
For the past 30 years, the computer revolution has touched almost every facet of life. In its early years however, the computer industry catered to a very niche audience (not unlike cryptocurrency). And as a brand new industry, marketing computers was not unlike marketing any other pr...