Go to any tech conference these days and you are likely to hear plenty of talk about platforms, software development kits (SDKs), and application programming interfaces (APIs). The general theory is that companies can realize significant benefits when external developers take their products and services in new, exciting, and often unanticipated directions. (For more on this, see my book The Age of the Platform: How Amazon, Apple, Facebook, and Google Have Redefined Business.)
Several examples will illustrate how important platforms have become to business. You've probably heard of the Gangnam Style video, the first to reach one billion views. (One can only guess at how much money Google has earned from its YouTube acquisition.) And then there's the über-popular game Angry Birds. Steve Jobs was a mad genius, but even he could not have foreseen the game's popularity when Apple launched the AppStore in July of 2008. To date, the addictive game has been downloaded more than one billion times.
Platforms, Innovations, and the Folly Predictions
Sure, Big Data is here, but it remains impossible to predict which videos, songs, and apps will go viral -- and that's precisely the point of platform thinking. By externalizing innovation, companies minimize the risk associated with putting all of their eggs in one expensive, time-consuming basket. Traditional notions of planning, management, and control fall by the wayside. To a large extent, developer ecosystems and user communities now determine whether products ultimately succeed or fail. It's a tradeoff, but one that many organizations have come to accept.
Microsoft, BlackBerry, Amazon, and other companies late to the mobile explosion are more than willing to share app proceeds with developers. Each is following--or at least, trying to follow--the Apple model. By paying out more than $25 billion to external developers via its AppStore, Apple has staked a claim as the place for this highly courted group to be. Expect that to continue with HomeKit.
Beyond these stalwarts, thousands of other lesser known companies have embraced platform thinking. Put differently, one need not be a behemoth to take advantage of APIs and SDKs. On the contrary, many small companies are doing interesting things by combining their own intellectual property and ideas with third-party tools and data sources. The possibilities are mind-blowing.
One example is Thalmic Labs. The company's flagship product, Myo, is a gesture-controlled armband that at first glance obviates the need for a proper computer mouse. In fact, though, its uses run the gamut.
Thalmic's developer evangelist, Chris Goodine, gave me a demo of Myo at Dassault Systèmes SOLIDWORKS WORLD this week. After it "learned" the particulars of my arm, hand, and fingers through a quick pairing process, I was moving objects on a computer screen through simple physical gestures. Zooming in and out was as easy as moving my fingers. The computer had become an extension of myself. While not quite Singularity, Ray Kurzweil certainly would have approved.
It didn't take long for my mind to start racing about what Myo and its ilk could accomplish. Sure, there's the elephant in the room (read: the possibility to improve gaming à la Microsoft Kinect). That's just the tip of the iceberg, though. Consider a doctor in one country who could perform a complicated surgery remotely. A patient undergoing physical therapy could precisely track her movements and then analyze her progress through the extensive capturing of data. She could expedite her recovery and avoid making time-consuming treks to PT officers.
Built on top of the SolidWorks API, future iterations of the armband will doubtless tie in new data sources. Google Maps? Facebook? Twitter?
In the Age of the Platform, the fundamental question around innovation changes. It's less about encouraging innovation within a company's walls, although that remains essential. These days, it's as much -- if not more -- about how to get the outside world to innovate on your company's behalf.