Building a new business is a tremendous learning opportunity.
Learning happens across multiple dimensions, and each one is impacted by the other.
Externally, companies look to the market to gather feedback and insights in order to validate the problems they aim to solve and uncover potential use cases.
Internally, team members working together learn about and from each other, and collectively push forward to continuously improve.
Building a platform business like MedStack is particularly nuanced.
This week, as we celebrate MedStack’s birthday, I’ve reflected on what I think has been foundational to our platform strategy and business success over the past nine years.
What is a platform?
The word “platform” is a supremely overused term.
The way I think of it, a platform is a technology that centralizes and automates work that other organizations have to do in order to participate in their markets, but the implementation of which doesn’t differentiate them from each other individually.
Put another way, the less time, effort and capital these organizations can spend on table stakes foundations, the more they can focus on their own expertise and differentiation to truly build something impactful and transformative.
The Kano model
This idea has roots and loose ties to a product management concept I’ve come back to time and again: the Kano model.
The framework organizes product features into:
- Basic Needs: those expected and necessary for market participation
- Performance Needs: those that can drive value through perceived efficiency for the end customer
- Delighters: those that are “talk-about surprises” that become proposition-definitive
Platform strategy is all about enabling product creators to shift cost and risk from the first category to the second and third.
Building trust: the key to successful platform dynamics
For this approach to work, the platform provider has to earn the trust of both sides of the market.
The seller’s (product creators) platform needs to deliver against the high standards that buyers (users) expect, and the buyers need to believe that the implementation will always be consistent so they don’t need to evaluate from the ground up each time.
Democratizing opportunity
The introduction of a new platform is typically associated with the democratization of a market opportunity, opening up a market problem to more participants. This is in fact its intention and purpose.
Incumbents invest in building Basic Needs features and deliverables that their platform then automates. They build their businesses around this assumption, even if the work doesn’t lead to differentiation.
But the platform then allows a flurry of new entrants that don’t need to play catch up, which means more competition, innovation, and better results for the market.
You can perhaps see why this approach is so attractive to the healthcare industry’s innovation problem.
An effective platform streamlines processes
Finally, because the platform has to be robust and predictable in its delivery, it must feature definitive integration points and interfaces, which will disrupt the old way of doing things. A good platform minimizes the lift.
Adoption takes a leap, along with growing trust in something new, and there can be a bit of buyer-user dissonance.
In all, a platform has to be very clear on what it promises, deliver it with utmost consistency and reliability, be brought to the market in targeting small, early entrants, and integrated with standard, low-lift interfaces, with success measured by the rate of democratization of the industry.
Fueling startup and healthcare innovation
This is not a new idea. I am reminded that the cloud itself, in its original implementation, was exactly this.
Public cloud platforms enabled startups to build and market Internet-connected software applications quickly, focusing on differentiation via experiential and data plays.
Building these kinds of products takes a very specific type of team, discipline and measures of success. This is the journey we’ve been on at MedStack.
As the healthcare industry matures, we are seeing more digital health companies being created, coming to market faster even as expectations on data security and privacy compliance continue to become more stringent, leading to faster improvements in healthcare delivery.
What we do is very very difficult; building a platform is not for the faint of heart. But the outcome absolutely makes it worth it.
