A while back, I vented about how startup founders should stop using the term platform because they often misuse it. It would be folly, however, to claim that this problem is confined to many entrepreneurs. They are hardly the only ones who fundamentally misunderstand the notion of a platform. Venture capitalists (VCs) are also some of the most egregious users of the term.
Case in point: Todd Lutwak and Jordan Stankowski of the esteemed Andreessen Horowitz recently penned a BusinessInsider piece called “Super Bowl 50: Are you ready for some platform? How the NFL, like many other businesses, is really a platform.” In it, the VCs make the following assertion:
…the NFL is a platform. And it’s not that different from the other top platform businesses out there–Amazon, Apple, Google, eBay, Facebook–in complexity and success. So in honor of the Super Bowl being played in the tech industry’s backyard, let’s set aside point spreads and playmakers for a moment and examine the NFL, Silicon Valley-style: as a platform. Which could help answer why–for the nearly 100 years it’s been in business–the NFL itself has performed so well.
Let’s Dial it Back
Of course the NFL is extremely profitable, but to call it a platform is grossly inaccurate. To compare it to Amazon, Apple, Facebook, and Google (read: the Gang of Four) is nothing short of absurd.
True platforms allow developers to take a company’s core offerings in different directions. Sure, iOS is far much more closed than Android, but each operating system encourages third parties to create. True platforms encourage external innovation.
Not only is the NFL not a platform, it’s not even a marketplace.
Can anyone say the same about the NFL with a straight face? The league strictly controls its TV rights, policies, players, affiliates, partners, and even its official data. Do anything with its expressed written consent and you’re likely to find yourself in court.
Lutwak and Stankowski continue with this gem:
The key to the success of any platform–whether eBay, Facebook, NFL, or something else–is that someone manages the evolving needs of constituents and makes changes accordingly.
They cite a recent NFL rule change as prima facie evidence of their thesis. With such a bland and prosaic definition of the term, riddle me this:
- Aren’t all the other major American sports leagues (read: the NBA, NHL, and MLB) also platforms?
- What about every other sport that has effected a rule change?
By the authors’ rationale, doesn’t just about every organization then qualify as a platform these days? What about coffee shops? I suppose that they are platforms too. Have they not changed to meet “the evolving needs of constituents”?
Think about the past five to ten years. Many now support mobile-payment apps. Rare is the coffee shop that fails to offer in-house WiFi. Delivery is also available in certain Starbucks. (In reality, coffee shops are becoming tech companies, not platforms.)
Simon Says: Not Everything Is a Platform
The NFL is a very traditional business. It is most certainly not a platform and it’s not even a marketplace. Uber, Lyft, AirBNB and eBay are more marketplaces than platforms. (As it turns out, many people mistake or conflate those two terms.)
Not even close.
What say you?