API or Platform

Long story short, I’m working closely with a startup that is building a social platform based on background location sharing.

Many people have asked the founders why they were not using their technology to provide other startups with an API to make location sharing as easy to use as Stripe for payment, Twilio for communication or Algolia for search.

A basic rule of entrepreneurship is: don’t chase two rabbits at the same time. And clearly, you can’t build both a SaaS API toward business users and a Platform toward end users at the same time. So what’s the difference:

Well, a BtoB SaaS API is a technology available for third parties to benefit from it (Algolia, Twilio, Stripe…). You rely on the technology but use your own data.

A platform is a utility on which is built a commodity & a social layer: Photo filters on Instagram, Mapping on Waze, Disappearing medias on Snapchat, Rides on Uber… Once you have enough users on your platform, you can provide third parties with both the data and the technology (API), linked together. Startups and developers don’t only use your technology but also your data. Product strategy and development put apart:

API is tech. The competition is fierce but you’re more likely to make it. Platform is tech + data. Very few actually make it…

When you have a real chance to make it as a platform, I think it’s worth the try