Alex Moazed, founder and CEO of Applico has something interesting to share. With his company catering to clients like Google, Glam squad, Auctionata, etc., he is now one of the most trusted advisors in the world.
His own company’s growth has been exponential with more than 300 clients in just six years. However, he has some lessons to share on how to scale a platform business from its inception to maturity. Take a look at what he shared on platform businesses and on how to build a billion dollar unicorn with some basic steps:
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Business Model – the first step
Before thinking about growth and success and strategies as well, it is important to have a right business model. The business model decides the course of action for your business in the coming years and also gives it a meaning and direction. Tony Hsieh, CEO of Zappos too stressed on the same whose 39 companies are platform businesses that have helped him get 25 percent higher investor confidence. Alex mentioned that of all the startups that were acquired last year, about 25 percent of them were platform businesses. Thus, he stressed on why to pick platform business model: less competition; more growth.
What comes first – Chicken or egg
Platform businesses have an issue of catering to the multiple user bases. To get A they need B and for B they need A. The only way to solve this problem and take care of the competition is to subsidize value before you reach the critical mark. This gives you an edge over the competition. In order, to subsidize value you can do it in two ways – either imply monetary subsidy or product features subsidy depending upon what customers you want to target.
Mobile – way to connect
Mobile surely has revolutionized things, and this impacts your business too. Ask any Mobile App Developer and he can tell how he reached from a small app platform to a million follower base. So make sure you reach out through the mobile app as your first step along with the websites, etc. Mobile apps on any platform should engage with the audience and give it a solid boost. Once it is done, it can be expanded to other platforms. So choose any one that you find easy and suitable for the first step, be it Android or iOS.
So make sure you have the right expertise for this. If things go wrong here, it may impact later on the customer engagement and business growth.
Finance – Handle with caution
Financing is very important for any business at the seed stage. As mentioned when you start with your first step like a mobile app, etc. take the right advice and right financing source. Using personal finance can be easy but has lots of drawbacks. Instead, look for the mobile developers who are helping you with the technical skills to provide you the right financing as well. This will not just save your task of finding the right source but will also develop a sense of trust in your technical partner. Thus, you will be on the safer side.
Do not let the financing problems and sources become a major issue as they impact each and every activity of the group. There are investors out there who have their eyes fixed like a hawk on your business. So make sure you give no chance to lose to your competitors this way.
Securing the customer base
Here the first base customers are the producers whose products are used and appreciated by the people around. So make sure your producers are loyal to you and have an interest in your product or service. If they are satisfied, the strategy and product can surely go a long way.
So raise the levels and make these users the ‘power users’. However, the meaning of power users varies from company to company. For Uber, it may be its most loyal and hardworking drivers who work more hours a day and for Instagram it may be the ones who have reached from nowhere to the most famous account holders on the platform. Thus, secure their trust first and within no time you will reach the other major chunk of the audience waiting to be swayed by your business.
Thus, you need to get the right finances and in getting it started with your customer base expansion. Target all the customers with equal effort and you can expand within no time. Once you have crossed this stage, you can easily see the exponential growth that the company is about to start. But as you expand, make sure you do not lose track of your initial customer base. Moreover, modify your strategy to make it more acceptable to different customers. This expansion will not just help you but also the economy and the world on the whole in bringing about a new model of growth and change for the good.