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Can your service become a platform?

Find out whether a service from your company can become a dedicated and exclusive platform to beat competitors; learn more in the article below.
November 28, 2019

Have you ever thought about turning your product or service into a platform, like Uber did with transportation services?

In times when the so‑called “sharing economy” keeps gaining popularity, making this change may feel like a natural growth path for almost any company.

That’s because turning your services into a platform can give your business much more scale, through technologies such as smartphone apps or web apps.

Even so, few people think outside the box and realize that business models like Uber can be applied to their own business.

If you’re one of the people who sees this opportunity but still doesn’t know exactly how to turn your service into a platform, this text is for you.

Keep reading and, if you have questions, don’t hesitate to contact X-Apps to talk to a specialist.

So, what is a platform?

We tend to assume that any app is a platform, but the truth is that being a platform involves more than just being software.

That’s because when your product or service becomes a platform, it means it stops being a standardized solution to a specific problem and becomes a connection environment between users and service providers.

Some of the most “classic” platform examples are Facebook, Tinder, Airbnb, and Amazon, but we can also mention strong Brazilian cases like FixClub, which connects maintenance service providers with customers, and Job Pilates, which connects Pilates instructors with studios where they can work—both developed by X-Apps.

Unlike products, platforms connect users and provide the tools needed for them to find the best solution to their problems.

In other words, a platform is the set of tools that enables value exchange between users.

Why turn your service into a platform?

Personalization of services and products is a major demand from today’s consumers. There’s no more room for “mass solutions” that ignore the specific needs and expectations of your target audience.

Creating a platform is a way to meet that demand. Users interact inside it, creating their own usage patterns and finding solutions to their problems “on their own.”

Airbnb, for example, would never have achieved such success if it only offered a standardized accommodation for users.

Instead, it connects people looking for places to stay with people who have a free apartment or room (and want extra income).

How can a platform generate revenue?

There are many ways a platform can generate profit, with the main ones being usage fees, commissions, and advertising. However, it’s worth remembering that user experience must always be preserved—because a pleasant experience is what will determine the platform’s success (or failure) in the market.

Beyond multiple monetization methods such as ads or service commissions, platforms have several other market advantages compared to products. To mention a few:

1. Longevity

Keeping a customer for a long time with one‑off products or services is possible—but much harder.

Platforms, however, offer a more lasting solution. iFood, for example, doesn’t “sell” only a single food delivery. It is, in practice, an indispensable app for people who like to eat without leaving home.

2. Flexibility

As we’ve seen, building a platform means creating space for users to interact with each other.

This allows what used to be your product or service to be redefined multiple times according to audience demand. It opens the possibility of expanding the company into other markets that weren’t even in your plans.

The game Counter‑Strike is an example. Its developer, Valve, had a product called Half‑Life that started receiving versions made by hackers.

They made these customizations available to players, but that made the game unstable. Instead of fighting it, the company recognized the demand and hired those hackers to create a second game—which became one of the most famous in the world.

3. Community

A platform’s value is in the number of people who use it.

In Facebook’s case, for example, the more people are online and active, the more ad revenue it generates. In addition, competitiveness grows through the community that forms, strengthening the company brand.

Unlike one‑off products or services, platforms allow users to create communities and invite friends to participate. That adds value to the company and uses one of the most powerful marketing triggers for attracting an audience: “social proof.”

4. Data collection

One of the biggest benefits of a platform is having direct access to customer data.

When users interact with it, you gain valuable information about consumer behavior. That helps define the direction of your business not only in terms of user experience, but also in terms of company profitability.

After all, how do you think Facebook, Google, and dozens of other companies offering “free” services became some of the most valuable in the world?

Step by step: how to turn your service into a platform

In general, transitioning a service into a platform involves four basic steps:

1. Start with a good product or service

Don’t try to use a worn‑out product or service, because turning it into a platform won’t “save” it if it doesn’t add value for your target audience.

In other words, a good service can become an excellent platform. But a bad or mediocre service will never become a good platform.

2. Define the features of the initial version

Since startup resources are usually limited, focus on creating a clean first version. Select only the features that are essential for the platform to work and, if applicable, the ones that truly differentiate your solution from competitors.

3. Choose who will develop it

Choosing the development company is probably the most important decision in the whole process of turning services and products into platforms.

After all, you don’t want to put your company’s reputation, user base, and technology “in the hands” of just anyone.

That’s why you should forget freelancers. Even if they are cheaper options, rework and lack of commitment can be costly in the medium and long term.

Hiring an internal developer might also be a viable option, but contrary to what many people imagine, building a platform goes far beyond lines of code.

You need to focus on user experience (UX), design, and dozens of other details that only a multidisciplinary team can handle.

X-Apps is a company specialized in developing apps and platforms. It has already built some of the main service platforms in the Brazilian market, including the previously mentioned FixClub and Job Pilates.

So, before making any decision, contact us and talk to a specialist. Based on your business characteristics, we can recommend the most interesting alternatives in terms of quality, market, and cost‑benefit.

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